Amazon gets beaten by malls and Alibaba in Singapore
US e-commerce giant Amazon's bid to expand into Southeast Asia has landed the firm in a bit of a pickle in Singapore. The island city-state off southern Malaysia is already filled with air-conditioned malls and Amazon is quite late to the party, as its e-commerce rivals have already consolidated the majority of market share in Singapore. The wiggle room is very less. Here's more.
Singapore is already burdened with shopping outlets. Mall operators here are now scaling back their operations, as years of over-expansion has led to a supply overload. Retailers also blame e-shopping for the fall in demand. However, according to Euromonitor International, compared to 15% in the UK and 10% in the US, only 4.6% of Singapore's retail sales were conducted online last year.
Chan Hock Fai, a fund manager at Amundi Asset Management, said, "Singapore is a very small city-state, so shopping is one of the favorite pastimes for all Singaporeans." As the retail market here is more established than emerging retail and e-commerce markets, "growth rates are harder to come by." Moreover, Singapore's local web store Lazada, backed by Alibaba, is also giving it tough competition.
Lazada has a diverse range of 30 million products, which squashes the tens of thousands of products that Amazon facilitates via Prime Now. The former enjoys 6.6 million unique visitors a month and its orders have tripled from 2016. Also, online shopping isn't exactly a new phenomenon in Singapore. Citizens have been getting products shipped here directly from the US, China etc for years.
The e-commerce hiccup is aptly stated by Lisa Tan, 32, a small business owner. She said to Bloomberg, "While online shopping is really convenient, I prefer to buy things in-store… It's definitely more convenient in Singapore; everything is pretty much within reach. I only shop online for things I can't easily buy in Singapore and on sites like Taobao and Amazon."
AsiaMalls Management runs six shopping centers in Singapore. Its MD Kee Yong said to Bloomberg, "The main reason that shoppers continue to shop in a physical store is due to the in-store experience - something irreplaceable by e-commerce." Therefore, the challenge here isn't getting the citizens to shop but to have an offline presence like others. Amazon needs to adapt to the Singapore culture.
