Singapore: Online spending still strong
E-commerce activities in Singapore are bucking the recession trend by not dwindling with the downturn, a government survey reveals.
Not only have business-to-business sales on the Internet risen steadily from January to September last year, online consumer spending has not dwindled with the downturn.
According to the Info-communications Development Authority of Singapore (IDA), business-to-business revenues among locally based companies rose 26 percent to $15.9 billion (S$29 billion) in the third quarter of 2001, from $12.6 billion in the first quarter. Online business-to-consumer sales also grew 13 percent to $355 million in the September quarter, from $314 million in the March quarter.
These are the first findings from a series of quarterly e-commerce surveys conducted by the IDA. The inaugural study kicked off last April as a joint effort with the Gartner Group, involving interviews with 2,000 locally based companies.
Explaining the upward trend, IDA Online Development Group Chief Executive Kaizad Heerjee said, "There is a critical mass of consumers for e-commerce, and companies are taking advantage of it.
"They see that e-commerce is a growth accelerator...and are adhering to it to make their businesses more profitable," Heerjee said.
"In today's economy, when competition is global, having an e-business will also give them an edge over competitors," he added.
He could not say if such growth will be sustainable this year. However, the IDA expects last year's B2B and business-to-consumer revenues to top $60 billion and $1.3 billion, respectively. This is compared with about $50.9 billion in B2B sales in 2000. The figures for 2000 were supported by a more extensive annual study conducted by the IDA and Singapore's Department of Statistics.
From January to September last year, the wholesale and retail sector in the B2B space registered the highest growth of 68 percent to $6.3 billion in sales. This segment was also the largest contributor in terms of revenue, with about 39 percent share of the online B2B market in the third quarter. This was followed by the banking and finance industry, which had about 35 percent share.
Meanwhile, the banking and finance segment in the business-to-consumer arena posted the highest growth rate of 25 percent over the January-to-September period; online sales were $222 million in the third quarter. The industry alone accounted for over 60 percent of the total business-to-consumer revenues in that quarter.
Hardest hit was the manufacturing field, which saw online B2B sales plummet almost 50 percent to $931 million over the nine months. In the business-to-consumer space, the segment also dipped 50 percent to $22 million in the same period.
As Heerjee noted, "The decline is in line with the downturn in the manufacturing sector."
According to figures earlier released by the Ministry of Trade and Industry, revenues from manufacturing exports were down 12 percent last year after a sterling 15 percent expansion in 2000. The sharp contraction was attributed to a lower demand for electronics products and the weak U.S. economy.
Irene Tham reported from Singapore.