How to start an epic eCommerce business in Singapore
10 minute read
Do you have a great business idea? Consider starting an eCommerce business in Singapore!
eCommerce has been on the rise with many business owners pivoting away from the traditional brick-and-mortar to owning an eCommerce store. eCommerce stores serve as an excellent means to cut costs, increase your reach, and boost sales. However, starting a business online is no easy feat, and having a business idea is only the start to your business journey.
From business finances, licenses, to the legal structure and digital marketing strategy, owning an online store may prove to be a challenge for the unacquainted.
Fret not as we’ve developed this comprehensive guide on how to start an incredible eCommerce business. Ready to get started? Continue reading to find out more.
Overview:
- Why you should start an eCommerce business in Singapore
- Step 1: Finding your product and target market
- Step 2: Coming up with a brand identity
- Step 3: Developing your business plan
- Step 4: Deciding on a business model
- Step 5: Time to incorporate
- Pro-tip: Bookkeeping, accounting, and taxes
- Step 6: Choosing the right platform
- Step 7: Logistics, logistics, logistics
- Step 8: Scaling up for success
- Wrap up
Why you should start an eCommerce business in Singapore
Singapore’s business landscape as an Asian Financial Hub makes it extremely favorable for entrepreneurs looking to start a business – and this extends to an eCommerce business as well.
The demand for online shopping in Singapore is high with approximately 3.3 million Singaporeans shopping via eCommerce stores, garnering up to USD$2.7 million in eCommerce market revenue just in 2021 alone. This is expected to grow annually by up to 9.9% from 2021, with a projected market volume of USD$4 million by 2025.
In fact, Singapore eCommerce platforms even grew amidst the COVID-19 pandemic. Total online visits increased by 23% during this period, with the average consumer spending approximately SGD$113 per online transaction.
However, successfully owning a profitable eCommerce business would, like any other business venture, require some business planning and an investment of time and money. Here are the basic steps to help you get started on your eCommerce journey.
Step 1: Finding your product and target market
One of the biggest hurdles you may face in starting a business is coming up with your business idea and figuring out what to sell. This can be tricky as the demand of consumers can often turn on a dime depending on the latest fad.
Thus, conducting initial market research is an essential first step into giving you some insight into what would be a profitable product to sell in the market. It might seem impossible given the endless pages of products available but believe us when we say – golden opportunities do exist!
For some sense-checking, here are some of the best selling eCommerce products in Singapore:
- Fashion items
- Beauty and cosmetics
- Baby products
- Pet furniture and accessories
- Consumer electronics
With that, here are some questions to help guide you on your research:
- What’s trending on popular eCommerce platforms?
- Do the related keywords produce any opportunities?
- What are the current sentiments/ reviews towards popular products?
- Are there any pain points buyers currently face?
- Where and how are you going to obtain your products?
Having the answers to these questions will help you in developing your product and lead you to determine the target market you would like to venture into.
Step 2: Coming up with a brand identity
Many consumers typically only buy from recognized brand names and ignore the rest. This is why building a strong and recognizable eCommerce brand identity plays a crucial role in determining the success of your eCommerce business.
Brand identity helps to reflect and support your business strategy, differentiate yourself from competitors, and resonate better with customers.
To build an eCommerce brand identity, consider your four V’s:
- Vision. What was the dream that drove you to starting your business?
- Values. What are the emotions that you want to resonate with your customers?
- Voice. How do you want your customers to perceive your brand?
- Visuals. How would you like customers to see your brand?
Having a brand identity may also provide the perception that your products are of higher quality, allowing you to charge a more premium price and establish a loyal customer base.
However, a strong brand identity isn’t built overnight and is often only visible in the long run. That being said, it should never be undervalued in the planning process of starting your eCommerce business.
Step 3: Deciding on a business model
To date, there are five common types of eCommerce business models.
- Business to Consumer (B2C). The most popular of the lot, B2C refers to a sale that happens between a business and a consumer. For example, Lazada.
- Business to Business (B2B). B2B involves a business selling products to another business. Unlike B2C, B2B does not involve direct contact with consumers and typically comprises of goods such as softwares and products. For example, CloudBric.
- Consumer to Consumer (C2C). C2C eCommerce refers to a consumer promoting their goods or services to another consumer. For example, Carousell, a consumer marketplace for the selling of new and used goods.
- Consumer to Business (C2B). C2B is when an individual offers their services or products to a larger business organization. For example, a freelancer providing his or her services on a project basis on Fiverr, a platform for procuring creative services.
- Direct to Consumer (D2C). D2C is a relatively new and emerging eCommerce business model and refers to a brand directly selling to consumers without the need for a retailer or distributor. For example, Zenyum, a cosmetics dentistry brand.
Your eCommerce may also consider the following:
- Dropshipping. This is a retail fulfillment method in which a business purchases the items directly from a third party that then ships the product directly to the consumer.
- White label. This is when you sell a product bought from a manufacturer under your own branding and label.
- Manufacturing. This is a traditional business model where the whole manufacturing process is supervised from end to end.
Step 4: Developing your business plan
If your eCommerce business is your vehicle, consider the business plan as your roadmap.
A business plan is an extremely important and strategic tool for entrepreneurs in starting and maintaining a successful online business. A good eCommerce business plan not only helps to focus on the specific steps necessary but also keeps your business on track with short and long-term objectives.
Depending on your market and product, the components of an eCommerce business plan may differ. However, a typical good business plan should contain the following components:
- Executive summary
- Company overview
- Market analysis
- Products and services
- Marketing plan
- Logistics and operations plan
- Financial plan
As the saying goes, if you fail to plan, you plan to fail.
Step 5: Time to incorporate
Now that you’ve got most of the heavy lifting out of the way, you’re almost there to starting your epic eCommerce business!
With your product, brand, and business strategy in check, you can now focus on the nitty-gritty of setting up (i.e. incorporating) your eCommerce.
In Singapore, eCommerce entrepreneurs can consider using one of the following business structures to incorporate with.
*Available only to Singapore citizens, permanent residents, or Entrepass holders.
It is also important to note that all Singapore companies must appoint a company secretary, as per government regulation. This individual will help directors prepare and file all necessary documentation to keep the company compliant.
Evidently, a company secretary is a highly important role for your business, so choose wisely if you are considering outsourcing this role. Did we mention that Sleek can also help with that? Find out about our trusted company secretary services here.
Besides a company secretary, there is also a list of legal requirements needed for incorporation. Thankfully, we’ve gathered them into a simple and comprehensive checklist that you can receive for free here!
Pro-tip: Bookkeeping, accounting and taxes
It might seem obvious, but ensuring your bookkeeping and accounting are up-to-date since day one is crucial in establishing a strong business. Aside from the obvious benefits of knowing your financial position and cash flow, keeping track of your business accounts is important for securing future business loans and investment. This is especially important if you are ever in the fortunate position of wanting to upscale your business (which we’ll discuss later on).
Don’t forget that all Singapore incorporated companies, including eCommerce business, must adhere to the reporting standards set by the Inland Revenue Authority of Singapore (IRAS) and Accounting and Corporate Regulatory Authority (ACRA).
Failure to meet these deadlines can lead to fines and penalties including debarment of directors. Staying on top of your bookkeeping and accounting is also pertinent to ensuring you are tax compliant.
If all of this sounds complicated and overwhelming, don’t worry. Sleek is here to help! As the trusted one-stop-shop for entrepreneurs and startups, we also help in managing your accounting and taxes to ensure your business is always compliant. Find out more on our accounting services here.
Step 6: Choosing the right platform
Once your company is successfully incorporated, the next step is to consider which eCommerce platform is right for your product. Thankfully, there’s a wide variety of platforms and ways for you to do so.
Primarily, there are two ways to do this:
Using an eCommerce marketplace. The eCommerce marketplace has been buzzing in recent years, with a myriad of popular new eCommerce platforms emerging. Here’s a list of the most common eCommerce platforms in Singapore:
- Amazon
- Lazada
- Shopee
- Qoo10
- Alibaba
Building your own online platform. However, if you prefer a little more creative freedom, developing your own eCommerce infrastructure through the likes of web hosting sites such as Shopify, Magneto, GoDaddy or WooCommerce could be a better fit for you. Just note that such web hosting platforms do charge an additional subscription monthly fee.
Step 7: Logistics, logistics, logistics
You’re almost there, with only the final pieces remaining to your epic eCommerce business.
One of the final steps is determining the logistics of how your eCommerce business will function. This mainly refers to the payment processing as well as the shipping options made available to your customers.
Payment Processing. These are solutions that allow eCommerce sellers to collect payments from their customers in many different ways other than cash or bank transfer, such as by credit cards or digital wallet payments. Examples of payment gateways include Hoolah, FOMOPay and PayPal.
Shipping. Each with its own pros and cons, the top 4 eCommerce shipping options available are:
- Free shipping
- Flat rate and table rate shipping
- Live rates from a carrier
- Mixed and alternative strategies
Step 8: Scaling up for success
Congratulations! You’ve built your business from the ground up – but your hard work doesn’t just stop there. Over time, as your customer base grows, so should your business as well. Here are some great tips to boost online sales and scale up your business for even greater success!
- Optimize for SEO. Search Engine Optimization determines how visible your eCommerce site is on search engines (such as Google), and will help in boosting awareness to the right target audiences. This can even be as simple as adding an eCommerce store blog with valuable, relevant content. Similar to brand identity, building a good SEO foundation isn’t done overnight and can be a long-term measure. But when done correctly, it can reap immense benefits.
- Outsource and automate. As the saying goes, you have to spend money to make money. eCommerce owners may think having a lean business is beneficial when starting out, but once your business grows, so will the manpower required too. To keep up with this momentum, consider looking at outsourcing or automating menial tasks so that you can focus on developing your eCommerce business. You can outsource a variety of tasks from your marketing efforts and strategy with marketing tools, to accounting and taxes with Sleek!
- Step up your (customer service) game. Customer service is crucial regardless of which stage your business is at. It can turn one-time customers into loyal shoppers, garner good reviews, and build trust. It’s simple when you’re serving 10-50 customers, but what happens when that number increases to 100 or even 1,000 customers? Planning and strategizing how you will handle customers (and their complaints) will be integral in upscaling your business.
Wrap up
And there we have it! That’s how you can start an eCommerce business in Singapore. For more tips and tricks, head over to our follow-up resource that ventures into the financial aspects of starting an eCommerce business.
Congratulations, you’re now well-equipped to venture off into your eCommerce journey. Have any questions or require more guidance? Talk to our Sleek team today to get started with a free consultation.
Starting a new venture may seem like a daunting road, but as entrepreneurs ourselves, we promise you it’s a rewarding one.
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