The e-commerce market in Singapore is expected to be worth US$5.4 billion (S$7.46 billion) by 2025, according to a report by Temasek and Google released on Tuesday (May 24).
This is larger than the casino industry in 2015, which was valued at about US$4 billion.
The report found that Singapore’s e-commerce market was valued at US$1 billion in 2015, with online shopping making up 2.1 per cent of retail sales – the highest proportion of all Southeast Asian countries surveyed.
Come 2025, Singapore’s e-commerce market is expected to make up 6.7 per cent of all retail sales, behind Indonesia’s 8 per cent, the report stated.
Southeast Asian e-commerce markets in 2015 and projected figures for 2025. (Chart: Google, Temasek)
Countries covered in the report included Indonesia, Vietnam, the Philippines, Thailand, Malaysia and Singapore.
The report also highlighted the growth of ride-sharing services such as Grab and Uber. It noted that in 2015, the Singapore market was valued at US$800 million, tying with Indonesia. Overall, the region’s ride-sharing market was worth US$2.5 billion in 2015, with the figure expected to exceed US$13 billion by 2025.
Ride-sharing market in 2015 and projected figures for 2025. (Chart: Google, Temasek)
It added that Singapore will continue to record the highest fare per trip, three times that of the average fare in Southeast Asia.
The report, which also looked at the venture capital and startup landscape in Southeast Asia, also found that as of 2015, Singapore is the most active country with 37 per cent of deal quantity and 72 per cent of deal value. Activity was mainly driven by two startups – Grab and Property Guru, which recorded investments of about US$350 million and US$130 million, respectively.
It found that Southeast Asia is the world’s fastest growing Internet region, with an existing Internet user base of 260 million. This is expected to grow to 480 million users by 2020. Consequently, the Internet economy in Southeast Asia is expected to exceed US$200 billion by 2025, driven mostly by the growth of the e-commerce market, followed by online media and online travel, the report said.
Driving growth are three factors unique to the region: A young population, with 70 per cent under the age of 40, a lack of big-box retail, as well as a rapidly growing middle-class, the report said.