Disgruntled Singaporeans want regional e-commerce players to step up their game: Blackbox Research

Shopee logo in the Shopee Building - ST file.jpg
Shopee continued to record high growth in gross merchandise value during the quarter, despite easing pandemic-related lockdowns in some countries.
SEPTEMBER 21, 2020 - 2:36 PM

MORE than one in three Singaporean consumers are less than satisfied with their digital commerce experience despite a majority spike in online spending during the pandemic. 

Singaporean consumers reported a spike in online spending in response to Covid-19, with 63 per cent of those surveyed now spending more online and the total spend for the average Singaporean consumer increasing by 31 per cent, according to data content and social research agency Blackbox Research and consumer intelligence platform Toluna. 

But while major e-commerce brands are enjoying higher usage rates, this growth has come at the cost of greater scrutiny. Brands including Shopee (52 per cent), Qoo10 (41 per cent), and Lazada (39 per cent) are widely used by Singaporeans but consumer satisfaction with Qoo10 and Lazada falls on the lower end while Shopee only performed average on the spectrum, stated the report. 

Specifically, 39 per cent of consumers in Singapore said they are less than satisfied with their digital commerce experience, citing delivery costs, product prices, and delivery time as their top three concerns.

Yashan Cama, international commercial director of Blackbox Research said the study confirmed a significant change in consumer behaviour in recent months driven by an increasing necessity to shop online.

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However, he added that this presents a unique opportunity for Singapore to act as the innovation incubator for brands to develop best-in-class e-commerce platforms and services to address these newfound challenges. 

“Singapore has always been an important market for both global and regional brands due to its strategic location, as well as its developed financial and legal system. We foresee Singapore becoming increasingly attractive as a tech and innovation hub, as trade tensions and hostility between markets like US and China continue. Singapore has every potential to become the testbed for new e-commerce players as they look to achieve a greater understanding of consumer sentiments – within Singapore and the region.”

Elsewhere in the region, e-commerce sales have increased exponentially.

Nearly three in five (59 per cent) of Asean consumers reported an increase in their online spend during the pandemic. While 56 per cent of Gen Z consumers reported more online spending, the increase is as much driven by older consumers, with the largest increases occurring amongst Gen X (60 per cent) and millennials (59 per cent), noted the report.

Regional e-commerce players have also solidified their status during the crisis. The highest proportion of Asean consumers reported using Shopee (71 per cent) since the start of Covid-19. Usage of this platform is strongest in Malaysia (83 per cent) and Indonesia (76 per cent) but lower in Singapore (52 per cent). 

The second biggest e-commerce player is Lazada at 48 per cent, with highest market share in Thailand (62 per cent), Malaysia (60 per cent), and the Philippines (59 per cent). 

This is followed by ride-hailing platform Grab at 42 per cent market share in the region.

The rise of e-commerce means it can no longer afford to service consumers like a utility, stated the report. 

"That is to say that the high servicing expectations that consumers often form in one sector are often applied to others, and e-commerce increasingly carries new and higher expectations." 

Mr Cama added: "We expect some of these cornerstone brands to experience a shake-up in the coming months if these existing problems are not quickly addressed. Consumers will only become more discerning in future. With 5G technology on the verge of transforming platform capabilities, current market leaders may wake to find themselves no longer at the front of that queue if they don’t address concerns and work to deliver a more frictionless experience.”

The research report Into the light: Understanding what has changed for the Asean consumer during Covid-19 analysed current sentiments, expectations and behaviours of 4,780 consumers across Singapore, Malaysia, Indonesia, Vietnam, Thailand and the Philippines.