As growth in mobile commerce continues to fuel overall spend online, e-commerce sales are estimated to rise by 20.1% by the end of 2014, exceeding US$1.5 trillion for the first time globally.
In Asia Pacific, the overall B2C e-commerce market has almost doubled from US$300 to US$525 billion in the past two years, while e-commerce revenues in Singapore are expected to hit US$2.99 billion by the end of 2014.
Even with the rate of growth set to slow slightly in 2015 globally, retailers are expected to see e-commerce sales rise by 17.7% to US$1.77 trillion as the market matures. Asia Pacific is expected to contribute the lion’s share at US$680 billion, with revenues for Singapore looking to grow to US$3.5 billion by the end of 2015.
As savvy retailers broaden their horizons to further drive growth, next year will provide rich pickings for retailers that make the right moves and embrace new and targeted strategies to win the hearts of consumers. So how will the global retail industry develop over the next 12 months?
Cross-border commerce presents opportunity and risk
The growth of cross-border commerce looks set to accelerate in 2015 as global marketplaces give consumers the chance to buy from retailers anywhere in the world. This paves the way for merchants to access overseas markets and expand internationally, offering the opportunity for significant growth, particularly in smaller markets such as Singapore.
Retail experiences to drive consumer loyalty
The once separate worlds of retail and entertainment have firmly collided. Consumers today want to buy into a brand experience that reflects their lifestyles – on and offline. To achieve this, retailers have attempted to diversify their offerings, but often in silos with services existing separately.
As we enter 2015, retailers are bringing these distinct offerings together under one roof, online and on the high street. Not only will this empower retailers to provide consumers a seamlessly connected experience, but it also unleashes an enormous opportunity to cross-sell and strengthen customer loyalty across the entire retail and entertainment ecosystem.
Nurturing closer relationships between merchants and consumers is key to growing a marketplace that offer shoppers an experience that’s focused on discovery and entertainment. Merchants need to take an omni-channel approach that combines the convenience of online discovery, with more tactile in-store experiences.
In 2015, more brands will be offering in-store promotions encouraging shoppers to explore their online stores, while digital communications may contain a call-to-action that drives foot traffic into physical stores. Taking this holistic approach will help drive home a stronger brand message for merchants.
Social shopping is entertainment
Social media is playing an increasingly pivotal role in the shopping journey, influencing both product discovery and purchase decisions. Moving forward in 2015, advanced online marketing techniques will be increasingly important to capture consumers’ mind share, involving a wider spectrum of social channels beyond Twitter and Facebook to applications such as Viber and Pinterest, which inject even more interactivity and richer content.
With consumers discovering things to purchase as they share images and curate collections of things they like, retailers are presented a huge opportunity to make shopping a more entertaining and engaging experience.
M-commerce continues to gather pace
As more consumers make the shift from desktop-based shopping to discovering products and making purchases via mobile devices, retailers can no longer afford to ignore changing consumer behaviour. In 2014 it’s estimated that mobile shopping generated US$1.1 billion worth of revenues in Singapore alone.
Meanwhile, “mobile-first” is also catching on across APAC where online users are accessing the internet only via mobile. As these trends gather pace, Rakuten is expecting more retailers to invest in mobile retailing and marketing next year in a bid to capitalise on the fast-growing m-commerce segment. This will, in turn, drive greater adoption of omni-channel commerce, as businesses seek to deliver a seamless experience across multiple platforms.
With an 80% smartphone adoption rate Singapore is ripe for the continued growth of mobile commerce.
Apple’s entry into the phablet market with the iPhone 6 Plus and the launch of other phablet flagships such as the Samsung Galaxy Note 4 will help drive the adoption of mobile shopping in Singapore as well.
Intensified competition across all levels
Attracted by a lucrative US$680 billion regional e-commerce market, competition is expected to be relentless in 2015.
Besides the local players, their regional and global counterparts are rushing to have a share of the pie, either by setting up a shop or investing in the local market. As a result, it is imperative for existing online merchants to up their game using technologies such as data analytics to gain invaluable insights. Armed with consumer behaviours and market trends, businesses can differentiate their offerings and develop effective strategies.
Speciality online stores in Singapore that have a unique offering will also continue to attract a loyal following of shoppers willing to spend on quality products. While the competition makes it harder for e-commerce businesses to succeed, it also promotes innovation and creativity that can benefit the entire industry in the long term.
The writer is Masaya Ueno, director of Rakuten Asia, head of the business development division and country manager for Singapore.