Black Box

Amazon SG Primed to Take a Bite out of the Local E-Commerce Market

November 23rd, 2016 Posted in White Papers and Public Research

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With its rumoured launch into Singapore planned for early 2017, e-commerce giant Amazon appears well positioned to shake up the local market. Exclusive new research from Blackbox reveals that Singaporeans – already avid online shoppers and big users of Amazon’s overseas sites – appear willing to make the switch, potentially placing many existing e-commerce players into the firing line. Those most likely to feel the heat include Qoo10, Lazada, Alibaba, Ebay, Gumtree, Fairprice and Asos.

Blackbox found that nearly nine in ten (86%) online shoppers in Singapore will likely purchase from Amazon’s new local site. With official Government estimates indicating over half of all Singaporeans are now online shoppers, the move means big business for Amazon. Blackbox’s findings show that Singaporeans would be willing to buy clothes and shoes (61%), electronics (50%), beauty and health products (43%), as well as groceries (34%) from Amazon’s Singapore-based site.

The findings pose a significant threat to existing competitors in the market, especially local, smaller sized businesses, who are may find it difficult to compete with Amazon’s deep pockets. When asked where they would shop at less given Amazon’s entry, over two in five (41%) of Qoo10’s shoppers said they would make the switch – a large chunk, given that it was found to be respondents’ preferred online shopping venue at present. Over one third of Alibaba’s customers (37%) said they would make a move, as well as 34% of Ebay’s customers, 29% of Gumtree’s customers, 23% of Asos’s customers and 19% of Fairprice’s customers.  Although the largest overall shift (59% from the US store; 49% from the UK store) will occur from Amazon’s offshore sites to its new Singapore-based one, this cannibalisation is unlikely to hurt overall global business, so long as Amazon’s local offerings are able to match up to the quality of its offshore sites.

amazon-final-1One market player everyone will be watching post Amazon’s entry is Lazada, who recently acquired online grocery retailer Redmart. With Amazon set to introduce its AmazonFresh grocery service with the 2017 launch, market analysts will be keen to see how Lazada responds to its latest threat. 35% of Lazada’s customers, as well as 16% of Redmart’s customers said they would shop less at aforementioned online stores given the launch of Amazon Singapore. Also likely to be affected is Netflix Singapore, who will now have to compete with Amazon’s Prime service, which gives premium members access to a growing library of videos and music, including original digital content, such as Jeremy Clarkson’s recently launched The Grand Tour.

Blackbox polled a nationally representative sample of n=1,000 adults between November 12th and November 21st 2016.