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PayPal Study Shows Singaporeans Find Value in Shopping on Local Websites

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2011-03-30 12:00
Local retailers should adopt multi-channel strategy to access S$1.1 billion online shopping market

SINGAPORE, March 30, 2011 /PRNewswire-Asia/ –While the increasing popularity of online shopping in tech-savvy Singapore is no surprise, what is amazing is how fast it has grown, the unique preferences of Singaporean online shoppers and the business implications for local retailers. PayPal’s first ever “Online and Mobile Shopping Insights” study in Singapore revealed some interesting trends that strengthen Singaporeans’ reputation of being one of Asia Pacific’s most affluent and sophisticated online shoppers. According to PayPal’s research, the size of the Singapore online shopping market reached S$1.1 billion in 2010 and is forecasted to reach S$4.4 billion in 2015. Even though 1.2 million Singaporean online shoppers (above the age of 18 years old) had an average spend per head of S$1,492 over the past year, two-thirds of the online shopping spend (S$730 million) came from the middle income and above (Note 1) groups in Singapore.

Contrary to popular belief that Singaporeans shop online primarily on overseas websites, a significant portion of online retail purchases are domestic as online shoppers spend nearly 40% (approximately S$420 million) on local websites. Even when Singaporean online shoppers do buy from overseas websites, they cite “unavailability” (58%) and “greater choice” (48%) as more important reasons than “less expensive” (44%), “better discounts” (42%) or “strong Singapore dollar” (35%). Thus, local merchants can benefit from the growth in domestic online spending as well as offer a wider choice and selection of goods (instead of competing on price) to get a larger slice of the online shopping market.

Elias Ghanem, PayPal’s General Manager for South East Asia and India, said, “With the online shopping market growing so quickly and breaking through the billion dollar mark, Singaporeans are clearly finding great value and a wide range of products and services on the Web, be it on domestic or overseas websites. The study results prove to local merchants that they should embrace a multi-channel approach for both in-store and online retail experience, with mobile as an emerging platform, in order to be wherever their customers are.”

The study was conducted from January to February 2011 and polled 407 Singapore online shoppers aged 18 and above from Nielsen’s panel for their online and mobile shopping transactions in the past 12 months. Besides providing an overview of the growing online shopping market, the study also revealed insights into the attitudes and behaviours of Singaporeans when buying online and on mobile devices.

Some of the key findings for domestic and cross-border online shopping in Singapore:

Online shopping is more than just airline and hotel bookings. While the travel category is tops, it only accounted for S$307 million or 28% of the online shopping market in Singapore. Other key online shopping categories include: Fashion/Beauty (S$146 million, 13% share), Entertainment/Lifestyle (S$143 million, 13% share), IT/Electronics (S$117 million, 11% share), General Insurance (S$83 million, 8% share), and Gifts/Collectibles (S$75 million, 7% share).
Singaporean online shoppers buy different items between domestic and overseas websites. Movies/events tickets (S$36 million) and general insurance (S$36 million) are top categories for domestic online shopping, while books (S$41 million) and movies/music/video games (S$24 million) are top categories for cross-border online shopping. In addition, online shoppers buy nearly double the amount for clothing (S$84 million) and travel packages (S$38 million) on overseas websites compared to domestic sites.
Enhancing security can boost online spending, especially for high income (Note 2)group. Slightly more than 4 out of 10 say that current credit/debit card security measures for online transactions are inadequate and half believe they are taking a risk every time they transact online with their credit/debit cards. Yet, increasing safety measures would convince nearly 6 out of 10 to spend more online. In fact, the high income group was the most concerned about security measures (57%), but are the most willing to increase their online shopping if safety is improved (65%).
In addition, these were the key findings for m-commerce and mobile shopping:

Mobile shopping is in its infancy stage. Over 364 thousand Singaporean online shoppers spent S$43 million on their mobile devices last year, approximately 4% of the online shopping market. Mobile shoppers bought low-priced items like movie tickets, fashion items and mobile apps, leading to an average spend per head of S$119 over the past year.
Growth potential for mobile shopping is significant. 4 out of 10 online shoppers in Singapore are willing to make a purchase on their mobile phones. More importantly, nearly 6 out of 10 of the high income group would be interested to do so, and they accounted for more than half of the mobile spend last year. In addition to more Singaporean online shoppers interested in buying on their mobile devices, they would like to buy higher-priced items like IT/electronics, general insurance and collectibles, boosting the potential size of the mobile shopping market.
Convenient, safe, and fast mobile shopping experience will be critical for mass adoption. The top 3 barriers to mobile shopping are small screen size (55%), security concerns (52%) and slow mobile Internet connection (42%).
Based on the online and mobile shopping study results, Elias concluded, “The strong call-to-action for local merchants is to quickly adopt a multi-channel retail strategy, provide greater choice in their online product offerings and offer more secure online payment options. In order to sell to mobile shoppers, they should choose a safer mobile payment method that can be completed in as few clicks as possible.”

Note 1: With personal earnings of S$4,001 and above.
Note 2: With personal earnings of S$6,001 and above.

Research methodology

The Nielsen Company conducted an online research project, commissioned by PayPal, for the purpose of understanding the size of the Singaporean e-commerce and m-commerce market as well as consumer behaviour and needs. The research surveyed a random sample of 407 Singapore consumers aged 18 and above, via an online survey from January to February 2011.

About PayPal

PayPal is the faster, safer way to pay and get paid online. The service allows members to send money without sharing financial information, with the flexibility to pay using their account balances, bank accounts, debit cards and credit cards in various markets. PayPal is an eBay company and enables global e-commerce with more than 94 million active accounts in 190 markets and 24 currencies around the world. The company’s open payment platform, PayPal X, allows developers to build innovative payment applications on multiple platforms and devices. More information about the company can be found at http://www.paypal.com.sg.

PayPal is headquartered in San Jose, California and its international headquarters is located in Singapore.

Media Contacts

Dickson Seow
PayPal Asia Pacific
Tel: +65-6510-6463
Email: dseow@paypal.com
Idran Junadi
The Hoffman Agency
Tel: +65-6238-1851
Email: ijunadi@hoffman.com

SOURCE PayPal

Written by asiafreshnews

March 30, 2011 at 5:58 pm

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