November 11 — 11/11, or Singles’ Day — is also known as China's biggest online shopping day. Last year, Alibaba — China's largest and most popular online shopping site — announced that the total value of stuff bought across all their online stores is worth $17.8 billion dollars, breaking their own record and setting a new global online shopping record for sales in one day.
To put this in perspective, the online sales in just one day in China is worth more than Brazil's total online sales for the entire year of 2016!
Brick-and-mortar retail stores in Orchard Road should have cause for concern, as online shopping in Singapore is not only growing faster than ever, but is going to be the future of how we shop. Here are some reasons why:
1. Singaporean shopping habits are shifting
Paypal's recent consumer study revealed that 73% of Singaporean adults shopped online in 2016, spending around $3 billion last year. The study also found that 38% of the adults surveyed said that they will be spending even more money online in 2017.
The top reason why? Due to convenience - with 78% of Singaporeans citing that as a key reason. The second highest reason is to save more money. It does make sense that retailers would offer more online promotions as compared to in-store.
2. Shopping on-the-go will be the way to go
On average, 31% of online shopping is made through a mobile device. And it doesn't seem to be slowing down anytime soon. Mobile online shopping is expected to grow by 42% this year - amounting to more than $1.2 billion in online transactions.
This means that more and more online retailers will be ensuring their websites are mobile-friendly to make online shopping a more seamless experience. You will probably see more retailers launch their own mobile apps too like beauty product giant Sephora and fashion conglomerate H&M.
At least now we know why people stare at their phones all the time on the MRT.
3. Singaporeans are the most confident cross-border online shoppers in the whole Asia Pacific
Singaporeans don't seem to have much paranoia when it comes to trusting online stores from other countries. Judging from the long queues that form whenever the ezbuy truck appears in neighbouring HDBs, we're not surprised that Singapore is ranked the country with the most confident cross-border shoppers within the region.
Following closely behind is India, and thereafter China. Considering these are the countries with very secure (and convenient) payment technologies like MasterCard and AliPay which clamps down strongly on unauthorised or fraudulent transactions, it has worked in promoting online shopping confidence.
This confidence indirectly means that Singaporean shoppers are all too ready to brick-and-mortar retail stores for their internet counterparts.
4. Cheaper overheads for online retailers is indirect savings for shoppers
Physical retail stores often find it hard to compete with online retailers as their overhead costs are much higher. Especially in land scarce Singapore, where rental costs are crazy high, not only do they lose out in terms of offering better prices for shoppers, but they also have to compete with online retailers’ extensive product ranges.
Think about Amazon's huge range of products. One can get lost for hours browsing endlessly through their products. It's also perfect for impulse shopping as a shopper is bound to find something to buy. Not to mention virtual storage and display space is endless compared to a brick-and-mortar store's limited storage room and display racks.
5. The increasing population in Singapore is going to drive more shoppers to go online
With the population in Singapore expecting to rise every year, the weekend crowds at Orchard Road and shopping malls are going to grow more and more in numbers. Singaporeans are also now more likely to first search for an item they have in mind online than to waste hours squeezing with the crowds.
With almost every major online retailer offering free shipping nowadays, it's going to be a tough fight to draw a shopper out of the comfort of their homes into the shopping malls. Physical retail stores who insist on only having an offline presence will need to rethink their business models in order to survive the future of shopping.