Singapore signals “huge opportunity” for Amazon, reports IGD

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With the news that Amazon has entered Southeast Asia with the launch of Amazon Prime Now in Singapore on 27 July, Shirley Zhu, programme director at IGD Singapore, says: “Singapore has affluent consumers with busy lifestyles, a big expat population and high internet penetration. It is also the gateway to Southeast Asia’s 600 million consumers. Shoppers here also tend to be very open to innovation, all of which make this a very attractive market and a huge opportunity for a retailer like Amazon.

“Indeed, there’s a huge opportunity in general for online grocery in Singapore. We’re forecasting sales to more than triple to approximately S$0.5bn (US$0.35bn) by 2020. Although online is only a small part of the country’s grocery market today, with a 1.2% share, we estimate that by 2020 online will have a 4% share of Singapore’s grocery market, with a compound annual growth rate of 39%.

“However, Singapore is also an extremely competitive market. Rumours have been circulating since the first quarter of 2017 about Amazon’s arrival, and both ecommerce companies and bricks and mortar retailers have upped their game accordingly.

“Amazon aims to supply more than 20,000 unique items to the Singapore market. A wide range of products are already available on the app, including groceries, household and home essentials, electronics products, toys, and more. Frozen meat and seafood and chilled beverages are also on the list.

“There are two delivery options for Amazon’s Singapore customers. Two-hour delivery is available across all delivery areas, whereas one-hour delivery is only available in selected postal codes at an additional charge of S$9.99. To support this fast delivery, Amazon has built its largest urban Prime Now fulfilment centre in the world, spanning some 100,000 square feet.

“This is the first country where Amazon has introduced Prime Now before its flagship offering, Prime. The service is usually exclusive to members of Amazon Prime but will be available to Singaporean shoppers that don’t have a Prime membership for a limited period.

“It remains to be seen how successful Amazon’s launch will be, but one thing’s for sure – in online grocery, Singapore’s shoppers are benefiting from more options, cheaper prices and faster deliveries than they ever have before.”