Singapore’s ultrafast broadband and young, technically engaged population mean the city-state has great potential for digital transformation and ecommerce. In fact, ecommerce revenue is predicted to reach over US$8billion by 2025.
There are ambitious plans for Singapore to become a technology-driven Smart Nation; a leading economy powered by digital innovation. The aim is to create a world-class city that responds to changing needs.
The changing financial landscape in Singapore
Before the coronavirus pandemic the country’s ecommerce market was expected to be affected by the wider economy, falling global capital expenditure, a reduction in exports, and disruption to supply chains due to trading tensions between the US and China. Gross domestic product growth was expected to slow to 2.4% year-on-year.
The coronavirus pandemic has, of course, affected the overall outlook. However, gross domestic product (GDP) for the third quarter of 2020 grew by 7.9% compared with the previous quarter, according to advance estimates in October from the Ministry of Trade and Industry (MTI).
The year-on-year figures now indicate a contraction of 7%, but this is a marked improvement on the13% contraction in the second quarter.
Government-backed business growth
Enterprise Singapore is the government agency tasked with championing enterprise development. It was formed from other existing agencies in 2018 to help businesses build their capabilities, move forward with innovation and expand internationally. Part of its role is to support the growth of Singapore as a hub for global trading and start-ups.
In April this year Enterprise Singapore launched a six-month ecommerce booster package intended to drive business transformation and diversification of revenue streams among retailers. It included collaboration with four online marketplaces that can help retailers to extend their domestic reach; Amazon, Lazada Singapore, Qoo10 and Shopee.
The package was designed to help small and medium-sized retailers with little or no ecommerce experience to start selling online. It supported 90% of the costs of implementing ecommerce platforms for domestic and overseas markets.
The objectives were to help retailers change their business model and diversify their sales channels and revenue streams beyond brick-and-mortar stores, which remain popular in Singapore.
Although applications are now closed, the package shows the level of government commitment to digital transformation and innovation. There are also a variety of continuing government programmes to support economic growth and expansion.
Support to adopt IT solutions
The Productivity Solutions Grant (PSG) is designed to help businesses registered and operating in Singapore to improve their processes with pre-scoped IT solutions and equipment. It provides cross-sector and sector-specific funding to move ahead with digitization and improved productivity.
The PSG includes a range of options including business to business (B2B) and business to consumer (B2C) ecommerce solutions and business management systems for wholesalers including sales, workforce, inventory, accounting, and customer relationship solutions.
Access to international markets
The Market Readiness Assistant (MRA) grant is available until 31 Mar 2023 to help small and medium enterprises (SMEs) expand overseas. This can cover up to 80% (from 1 November 2020 to 30 September 2021) of the costs to develop ecommerce sites designed to meet the needs of international customers, overseas logistics or marketing, for example.
Eligible businesses can receive up to 80% of eligible costs, capped at S$100,000 per company, for each new overseas market where their sales haven’t exceeded S$100,000 in the three preceding years. Each application is limited to a single activity such as a market entry initiative or attending a trade fair.
The Enterprise Development Grant (EDG) is intended to help businesses create the foundations and strategies for future overseas growth through technology and innovation. Support is available for three main areas of development.
Core capabilities – support for projects that will help businesses prepare for growth and transformation by strengthening their foundations. Basic functions such as sales and accounting will not be included, but development of strategies, financial management and human resources capabilities, customer service processes and marketing could qualify.
Innovation and productivity – companies exploring new areas of growth or enhanced efficiency can qualify for support. This could include redesigned workflows and processes, automation and use of technology to streamline routine tasks.
Market access – companies interested in overseas markets can apply for funding to cover some of the costs of expansion. This could include planning, implementing and integrating mergers and acquisitions, marketing, pilot projects and work to meet international standards.
Third party consultancy fees, software and equipment, and internal staffing costs could all qualify for up to 80% funding from the EDG and some businesses seriously affected by the coronavirus pandemic could qualify for up to 90% funding. A commitment to worker outcomes such as wage increments, job creation, job re-design, or training for existing staff will be required as part of the application.
Skills such as digital resource management, content development, and data analysis are in high demand. The Skills Framework for Retail initiative aims to provide the Singapore retail sector with skilled professionals to support productivity, improve customer satisfaction and gain competitive advantage.
The national training agency, SkillsFuture, has been expanded to include a retail-specific skills framework with information on trends and workforce profiles, career opportunities with the key tasks, skills and competencies needed, and training programmes for new and existing employees in the ecommerce and omnichannel retail sector.
If you are interested in harnessing Singapore’s potential for national and international ecommerce, talk to one of our experts.