How to sell online in Singapore

How to sell online in Singapore: a marketplace seller’s guide

For online sellers, Singapore is an ideal location to set up an online business, but the most popular platforms in the region might not be the best fit for you.

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Singapore is a highly desirable market for online sellers. The South East Asian city-state is set to bounce back from the pandemic with higher-than-expected growth of between 6-7%, with the local government raising its projections in the second quarter of 2021. With excellent international trade and strong links to the rest of the Asian market, Singapore is an ideal location to set up an online business or expand your international customer base. But breaking into the market as an e-commerce business can be tricky, especially for the uninitiated.

In this guide, we’ll explore how e-commerce businesses can set themselves up to successfully sell online in Singapore. We’ll identify the most popular regional marketplaces, share the main reasons behind each platform’s success, and explain why the most visited sites might not be the best fit for an international e-commerce business looking to sell online in Singapore.

Do I need a licence to sell in Singapore?

No. If you’re an e-commerce business, you don’t need a licence to sell online in Singapore. The confusion around whether or not licences are necessary to sell online comes from the wording of legislation provided by the Singapore Broadcasting Authority (SBA).

Under the 1994 regulations, Internet Content Providers (ICPs) are counted as broadcasters. Although e-commerce platforms are counted as ICPs, they are automatically considered to be "class-licensees". Individual sellers don’t need to worry about being licensed by the SBA, especially if they are based abroad as the department has no international jurisdiction.

However, it’s advisable for e-commerce sellers to be aware of the Sale of Goods Act (SOGA), which covers product standards and quality controls.

What is the Sale of Goods Act (SOGA)?

The Sale of Goods Act applies to contracts for goods sold in Singapore. Under the legislation, any contract for the sale of goods comes with implicit terms. The terms stipulate that:

  • Goods should be of a satisfactory quality
  • Descriptions of a product must be in line with the goods as sold
  • If goods fail to meet the standards, the buyer can reject the goods and either terminate the contract or claim damages.

E-merchants should check the Misrepresentation Act to acquire a full understanding of their liabilities under Singaporean law.

Analysing the most popular e-commerce platforms in Singapore

Once merchants have explored the necessary legislation, they can move on to identifying the best e-commerce platforms for selling online in Singapore. Amazon is a popular marketplace in Singapore: if you have an existing Seller Central account, you can get set up on Amazon Singapore very quickly.

But how does Amazon compare to other highly popular platforms in the region? The top three Amazon competitors in Singapore are Shopee, Carousell and Lazada.

Amazon in Singapore

The worldwide internet behemoth was surprisingly behind the e-commerce market boom in Singapore. The US-based company launched localised services in 2017 and only unveiled a dedicated Singaporean web domain as recently as 2019.

Since then, Amazon has managed to position itself as the fourth most popular e-commerce platform in the region in terms of website traffic.

With the company’s global presence and highly competitive Prime service, selling online in Singapore via Amazon.sg provides an extremely lucrative opportunity for both local and international merchants.

Shopee

Shopee was established in 2015 and is the most popular online marketplace by visitors as of April 2021. Shopee is especially popular due to the ease of use of the platform and features like Shopee Live, which have proven to be a hit with Chinese customers.

Sellers looking to expand their business in the Chinese market should consider setting up an account on Shopee. However, if sellers are to maximise their returns from selling into the Chinese market from Singapore, they should also set up an international account that enables them to accept foreign currency payments with minimal hassle.

Shopee actively welcomes sellers based in Singapore to sell to customers based in China. The new programme is currently in pilot mode and set up exclusively for sellers based in Singapore. International sellers hoping to sell further afield can apply directly to Shopee to find out whether they qualify for additional coverage.

Carousell

Founded in 2012, Carousell is just a few years older than Shopee but the second most popular platform by website traffic. One of the platform’s greatest strengths is the simplicity of product listings, which can be added in just 30 seconds, compared to an average time of 10-15 minutes on platforms like eBay.

Carousell specialises in creating communities around its products. Its unique "Chat to Buy" feature is a popular tool that encourages users to engage with sellers, helping to drive meaningful interactions that can boost your sales.

Unfortunately, the company’s official website discourages international selling. For small e-commerce businesses looking to expand across borders, it’s advisable to set themselves up on other platforms that can better support their ambitions.

Lazada

Lazada, the third most popular platform by website visitor volumes, was established in 2012. Conceived as a South East Asian answer to Amazon, the company initially launched in the Philippines and has served the Singaporean market since 2014.

The company was easily the most popular e-commerce platform in Singapore by the time the site was purchased by Alibaba in 2016 for $2 billion (USD). The marketplace has since found its dominance in the region challenged by Shopee, Carousell and Amazon.

Lazada provides some of the most comprehensive support for sellers, with a range of additional services covering tax, finance and store design. E-commerce businesses using the platform can also benefit from Lazada’s comprehensive handling of shipping or delivery complexities and an efficient system for processing returns.

As a result, Lazada is the most internationally friendly of the popular e-commerce platforms in Singapore. But before setting up a seller account on any of the platforms above, international businesses importing goods to customers in Singapore should be aware of additional regulations that apply to imports.

Importing products into Singapore: taxes and exemptions

The Inland Revenue Authority of Singapore (IRAS) is the main tax body in Singapore, and you can find out more about specific taxes that might apply to your business on the IRAS website. There are three major categories of duties, taxes and exemptions that apply to goods entering the country.

The Goods Services Tax

The 7% Goods Services Tax (GST) applies to all items for sale in Singapore, including imports, provided the total value of the items being imported is above S$ 400 (or $297 USD). If the total value of the goods being imported is under the threshold, it isn’t liable for the tax. The GST will be raised to 9% in 2025. Once the GST is raised to 9%, the duty-free exemption will no longer apply.

Customs Duty

As Singapore operates a free port, customs duties do not usually apply to imported goods. However, beers that exceed 5.8% ABV are the most notable exception, as they are liable for this tax.

Excise Duty

Excise duties are penalties applied to goods to discourage consumers from purchasing them. The goods that excise duties apply to are usually considered to be harmful to the consumer or the environment. Whilst the vast majority of e-commerce imports wouldn’t be affected by an excise duty, we’ve listed the goods that would:

  • Intoxicating liquors
  • Motor vehicles
  • Tobacco products
  • Petroleum products
  • Biodiesel blends

What can’t I import to Singapore?

There are certain items that are prohibited from being imported, regardless of whether the customs and excise duties are paid. Prohibited items include:

  • Endangered wildlife or products derived from these
  • Military communications equipment
  • Obscene articles, including books, magazines, and DVDs
  • Nasal and oral snuff
  • Chewing gum
  • Firecrackers
  • Shisha
  • Chewing tobacco

Sellers should not try to import any of the products above into the country.

How do trade deals impact importers selling online in Singapore?

Although the government of Singapore has signed numerous trade deals with other countries, the agreements tend to cover businesses based in the country exporting abroad.

E-commerce businesses can sell online in Singapore with confidence

The Singaporean market represents a huge growth opportunity for online sellers. Ambitious e-commerce businesses, based abroad or within the country, can expand into new markets by leveraging the best platforms that facilitate easy business across borders.

However, if e-commerce businesses are to optimise their profitability, they will need to set themselves up to maximise the benefits of operating in a highly connected country with strong international trade links. By planning ahead and considering everything from import taxes to how customers will pay in multiple currencies, marketplace sellers can succeed in a fiercely competitive global market.

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