A wave of big-name stores in Singapore is setting up shop online in a move that industry experts say could eventually lead to lower prices for consumers.
At least 10 major retailers – including supermarket chain Sheng Siong and electronics giant Harvey Norman – have either opened Internet stores this year or plan to do so soon.
Many of these companies, some of which are pumping in up to $50,000 each to do so, say the move is vital during a time of changing consumer buying habits, competition among international and local online stores and rocketing rents.
Even malls are catching on.
Tangs launched an e-store for its retailers last year and Takashimaya will do the same by the end of the year.
Harvey Norman’s online store will be up and running by the middle of next year, said its managing director Angelo Augustus. This will let shoppers compare prices and shop around the clock.
“It will also help us push out opportunity buys and promotions. It’s another revenue stream for us,” he said, adding that this could mean reduced operational costs in the long run and, eventually, lower prices.
Four people will be hired to maintain and update the website – far fewer than the number of staff needed to run a physical store, he said, adding: “This is where the future is.”
The 33-outlet Sheng Siong will be launching its online shopping pilot project later this year. Prime Supermarket is also working on one.
“We are not in many housing estates and this helps us to reach out to more customers,” said a spokesman for Sheng Siong, who added that store sizes of 10,000 sq ft – the preferred size for its outlets – are not easy to find.
Adidas Singapore launched an online store last month, developed with the help of Singapore Post, which maintains the portal along with handling deliveries and warehousing.
Electronics retailer EpiCentre went online in January, do-it-yourself chain Home-Fix will launch a Web store in phases from July and sports brand Decathlon launched online in Singapore last month.
A recent PayPal study showed that Singapore’s e-commerce market grew from $1.1 billion in 2010 to $1.4 billion in 2011. It is projected to hit $4.4 billion in 2015.
Singapore Polytechnic business school lecturer Randy Ng, who specialises in online retailing, said online stores allow retailers to tap new markets, including shoppers overseas and those who do not live near a physical outlet.
“Online shops have started drawing potential and existing customers away from traditional stores. This is a fightback,” said Mr Ng. “In the past, retailers felt there was no need for an online presence because Singapore is small and people can easily travel to a store. This has been proven otherwise with the popularity of online-only retailers.”
Popular local online multi-brand store zalora.sg, which was set up early last year, has seen its business double every six months.
Business at luxola.com, which opened in 2011, tripled last year.
Mr Ng said that in the long run, stores may move customers to their Web platforms. He added that rent makes up about half of a traditional retailer’s operating costs.
“You may see smaller shop space sizes, showroom-style formats. This may ultimately lead to lower prices overall,” he said, adding that overseas retailers offer discounts online to lure customers to the platform.
Teacher Gina Chua, 30, shops online for items such as nail polish and clothes. She said: “I am put off by how crowded malls are nowadays. Parking can also be terrible. If I am replenishing a product, it’s easier to buy online.”
This article was first run in The Straits Times newspaper on May 30, 2013. For similar stories, go tosph.straitstimes.com/premium/singapore. You will not be able to access the Premium section of The Straits Times website unless you are already a subscriber.
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