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COVID-19's Impact on Singapore's eCommerce Market

Written by
Nathaniel Yim & Benedict Leong
Published on
April 21, 2020
Updated on
June 21, 2023

Singapore is re-entering phase 2 starting from the 16th of May to 13th June 2021 as of the time of this writing. With many changes to the way people live and how business is conducted, this phase of tightened measures highlights the increasing possibility for such habits and restrictions to continue – at least in the near future. With reference to Singapore’s 2020 Circuit Breaker, we can now evaluate possible trends and events that may unfold in coming months.

The earlier 2020 lockdown had created a sudden and dramatic change in consumer behaviour, with more consumers turning to online shopping1, as non-essential businesses and offices were required to close their offices and stores. 2021’s phase 2 restrictions may see similar impact.

While circumstances caused behaviours to change rapidly, the reversion back to normal may take a lot longer, if it even reverts back to those levels. To help navigate these uncertain times, we’ll look at some of the key developments and changes that have affected eCommerce in Singapore and what it means for eCommerce businesses.

Supply-side Issues and Changes

Earlier in 2020, China extended their Golden week celebrations in an effort to curb the virus’ spread across the country. Starting from those extensions, global eCommerce supply chains have been disrupted with many companies running low or even running out of inventory.

Demand for eCommerce products did not reduce as fast as the acute drop in supply during that period, this caused a shortage for many shippers2. Customers across multiple major eCommerce platforms had their deliveries delayed, with some of the platforms even offering to facilitate cancellation of orders for those who wanted them. The resulting loss in revenue led to cash flow issues for companies, especially SMEs, with some going out of business.

Even after factories in China reopened, the continued spread of the virus led to increasing instances of border closures and lockdowns, severely affecting air travel3. A sizable amount of cargo is transported via the bellyhold of passenger aircraft, and the reduction of flights caused a shortage in supply, causing rates to surge. This price hike caused many eCommerce merchants to be unable to secure freight space.

In May 2021, China reported clusters in two of its provinces – its first community cases in over 3 weeks4. This raises questions to whether these developments would cause similar shocks to supply chains as seen in 2020. Since the onset of the pandemic, many companies have focused on flexibility and agility to repurpose facilities to more in-demand products. An example of such is Dyson’s shift to producing more ventilators in light of the spike in demand.

Additionally, more organizations are focusing on diversification strategies to build resilience in their supply chains. This includes diversifying supply chains to incorporate manufacturing locations in ASEAN countries. While other companies have concentrated on digitising supply chains. A report by BCI and Everstream Analytics stated that 55.6 per cent of organizations are now using technology to help analyze disruptions while 40.5 per cent, almost double the figure in 2019, are using technology for mapping4. As companies continue to actively optimize systems and processes, supply chains are increasingly resilient and are expected to cope better with such disruptions.

Tighter regulations on business continuity and new measures to protect the safety of employees and consumers mean delays in shipping. The compulsory implementation6 of business continuity measures such as temperature screening, cleaning and disinfection works and shift and split work arrangements will slightly reduce the frequency of shipments. Some of the initiatives being explored to keep people safe could also change the delivery experience altogether, such as contactless delivery.

Demand-side Issues

There has been growing uncertainty around local and global business climates lately. With many businesses in various industries such as tourism, retail and F&B being severely affected by lack of tourists and even domestic consumption, consumer demand will likely reduce greatly across the board as people begin tightening their belts7.

In April 2020, Janio conducted a survey on changes to consumers’ behaviour and expectations in light of the COVID situation. 76 per cent of our respondents believed that the economy will be in a worse state in the next 3 months compared to pre-COVID levels. Our respondents were nearly evenly split between a positive and negative economic outlook for the state of Singapore’s economy in the next 12 months.

As a result, purchases of big ticket items such as luxury items or consumer and home electronics could likely see a decrease. Four in five respondents to a survey reported in the Straits Times8 indicated that they were likely to decrease spending on luxury items in general, but felt that the Singapore Government’s responses to support the economy during the outbreak are better than those of other countries.

In addition, with 2021’s phase 2 measures in place, more companies will be favoring work from home arrangements as compared to split and shift work, and demand for categories such as office attire or formal wear will likely be reduced in the short term. Furthermore, group sizes have now been decreased to 2 with no dine-ins allowed at local eateries9. This will affect footfall in public areas and would likely limit sales at physical stores.

According to a Statista survey in March 202010, spending on overseas travel fell by 60 per cent. McKinsey11 reported that the initial demand shock for air travel is worse compared to September 11 or the 2008 Financial crisis. They estimate that International travel will likely take a long time to recover at an estimated 6 months minimum, hence purchases of travel-related products will take time to recover as well.

However, it is not all doom and gloom for travellers, with many countries, including Singapore, considering possible travel bubbles as well as business travel lanes. These special arrangements, albeit subjected to uncertain circumstances and conditions, provide a possibility for future arrangements.

Current Consumer Trends

While the situation now is indeed complex, opportunities still exist for eCommerce merchants to not only tide through the crisis but emerge stronger. For one, eCommerce consumption as a whole has surged greatly as consumers turn to the internet to make their purchases.

Statista12 backs this up with a recent survey showing that online grocery purchases have gone up in addition to online purchases of non-groceries as well. Companies like baby goods retailer Mothercare Singapore and home and living retailer Iuiga mentioned that online sales have increased significantly. Iuiga also mentioned that their online sales were sufficient to offset lost brick-and-mortar sales13.

Furthermore, these consumer purchasing behaviours are likely to continue. A survey conducted by Rakuten Insights showed that 57 per cent of respondents said that they would continue to purchase through online platforms as it is more convenient than physical stores14. In addition, many prominent local retail stores, like local household name Robinsons, had to close or switch to online channels, citing issues amplified by the pandemic15.

Despite improving situations after the circuit breaker in June 2020, retail sales were still limited at a year-on-year decrease of 27.8 per cent while online retail saw a record 151.2 per cent increase with an elevated 18.1 per cent share of total retail sales16. In comparison, online retail saw similar growth in December 2020 as Singapore prepared for its Phase 3 of re-opening, with a year-on-year growth of 58.1 per cent and 11.0 per cent share of total retail sales17. With 13 months of positive growth for online retail, these online channels are here to stay and may even be the preferred method for local consumers.

With Singaporeans staying home, it is understandable that the best performing categories are groceries, health foods such as vitamins, home care products and products that help them work better from home. Work from home-focused products include monitors, webcams, and even home office furniture. Google search interest18 for computer monitors spiked in April 2020 and has since been generally higher than pre-pandemic trends.

Another study done by Global HR Solutions Agency Ranstad Singapore found that 42 per cent of Singaporean respondents want flexible work arrangements even post-pandemic, while 14 per cent prefer to work from home all the time19. Thus, purchasing work from home-related products may not see as significant of a surge as in 2020 but should continue to be popular, especially due to the recent measures which encourage workers to work from home.

Furthermore, companies are looking to help their employees with home office set-ups through additional benefits. An example is Fujitsu Asia providing employees with a one-off $1,000 to support their work from home needs20. These benefits give us a glimpse into the permanence of home offices and more push factors for Singaporeans to invest in work from home products.

The increased time spent at home also means that people will be bringing home more activities that were normally not done at home. One example is sports and fitness, with eCommerce retailers such as having received demand that is so overwhelming for some home gym products, orders were temporarily put on hold to clear the existing backlog in 2020. With many indoor gyms and studios being suspended during the recent 2021 phase of tightened measures, similar demand patterns may arise as consumers turn to replicating similar environments at home through purchasing such equipment21.

Other categories that could potentially see increased demand include toys and hobbies, with families turning to board games to bond with one another or working on craft products to pass the time. A Google trends22 report on board games search interest shows that interest in board games spiked more frequently and significantly ever since the 2020 circuit breaker. These were when Singapore’s government raised the Disease Outbreak Response System Condition (DORSCON) level to orange in February and again in early April coinciding with the Circuit Breaker’s announcement.


With society spending more time online, merchants now have a great chance to focus on online marketing and to engage with consumers in a meaningful way. Given the current climate, consumers have expressed the need for eCommerce retailers to be more communicative, providing more updates on shipment statuses and communicating promotions or changes to inventory more frequently and openly.

Our survey on changes to consumers’ behaviour also asked questions related to eCommerce experience expectations in light of the COVID situation last April. In our survey, 43 per cent of our respondents said they expect merchants to be even more communicative regarding the above compared to the pre-Covid state.

The reasons they provided was that they’re hoping that merchants will keep them assured of the status of their deliveries. While respondents expressed that they understand that volumes will be higher during this period, communicating clear expectations on deliveries, product availability and promotions will go a long way in fostering customer loyalty. Some also expressed frustration about the lack of communication regarding delayed deliveries. During this period, it may make sense to invest more in customer service and to ramp up the frequency of updates to customers.

Additionally, brands would do well to ensure that any communications or actions take into consideration how their audience is feeling and demonstrate sensitivity. Brands such as IKEA’s “Make Home Count” campaign23 have shown how to maintain brand consistency while creating messages that resonate well with consumers during these times, while integrating it with their eCommerce platforms.

Communications that show empathy and resonate with your audience can ensure that your business can continue to run while building brand loyalty with consumers, which will pay dividends in the long run.

For traditional retailers who haven’t moved online, now is a good time to make the move and leverage existing brand equity to create a strong digital presence. As discussed earlier, Mothercare SG and omnichannel retailer Iuiga benefited from this24. With user-friendly platforms such as Shopify and online marketplaces like Lazada and Shopee, it is easy for retailers to begin listing products and selling to consumers25.

To ensure that their businesses can continue to operate, merchants will need to ensure that their supply chains are robust, sufficiently diversified and that there is sufficient capacity to ensure smooth delivery experiences for their customers. This includes a variety of payment methods like cash on delivery to cater to more customers as well as reliable returns processes. In fact, a 2018 study by the Institute for Service Excellence saw that customers who rated exchange and return policies’ poorly were associated with lower satisfaction and loyalty scores26.

With many international brands shifting supply chains out of China or investing in sources in addition to those in China to reduce their dependence on a single supply source, manufacturing in Southeast Asia is rapidly taking off, with countries like Vietnam and Indonesia leading the way16. A China-plus-one sourcing strategy could pave the way to more sustainable business in the future.

While international air freight may be facing complications due to the reduction in flights, sea freight is proving to be a reliable way to move freight. While turnaround time might be slower than using air freight pre-COVID, the certainty of shipments will more than compensate for the wait for air freight space due to air freight supply scarcity.

Sea freight shipments from China to Singapore will take about 8 days while shipments from South Korea to Singapore will take around a week. Keep a look out for logistics partners who can provide with you supply chain recommendations to keep up with changes like these.

For last mile or cross border B2C deliveries to consumers, ensuring that you have a diversified network of service providers to fall back on in case any complications arise helps ensure sufficient capacity for deliveries. Working with logistics service providers that have business continuity plans in place also help provide you and your consumers peace of mind.

Additionally, a logistics provider whose merchant portal lets users create orders easily anytime, anywhere, facilitates better planning and deliveries. This would provide flexibility for businesses in the midst of other preparations during such disruptions.

The COVID-19 situation has shaken up conventional wisdom, but where there are crises, there are opportunities to adapt and thrive. Similar to how Singaporeans have shown resilience and adaptability to these new circumstances, businesses can also find ways to reinvent the way they serve and communicate with customers. From providing more assurance and showing empathy through more frequent updates to customers to reinventing supply chains in light of new circumstances, the resilience built today will serve businesses well long after this situation ends.

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  1. Big Commerce - Understanding the COVID-19 Effect on Ecommerce
  2. Today Online - Covid-19 outbreak: Orders on e-commerce sites from China delayed, retailers there unresponsive
  3. SCMP: Fresh local Covid-19 cases in China trigger run on vaccines
  4. The Straits Times: Singapore retail sales sank 8.6% in February as coronavirus hit tourism, F&B
  5. Everstream: Supply Chain Resilience Report 2021
  6. MOM: General Advisory for Workplace Measures
  7. The Straits Times: Coronavirus pandemic deals fatal blow to struggling businesses
  8. The Straits Times: No dining in, social gatherings capped at 2 people from May 16 as S'pore tightens Covid-19 rules
  9. Statista: Singapore: COVID-19 induced change in consumption habits 2020
  10. McKinsey: Covid-19 Facts and Insights
  11. Statista: Singapore: COVID-19 induced change in consumption habits 2020
  12. The Business Times: Online sales help some retailers cushion blow from outbreak
  13. Rakuten Insights via Statista: Singapore: reasons to continue purchasing online among consumers after quarantine 2020
  14. The Business Times: The retail scene in post-pandemic Singapore, Hub Projects
  15. UOB: Macro Note - June 2020 insights
  16. UOB: Macro Note - December 2020 insights
  17. Google Trends: 'Computer Monitor' from April 2019 to May 2021
  18. Ranstad Singapore: 2 in 5 in Singapore Wants Flexibility to Work from Home and Office
  19. The Straits Times: A staff clubhouse and $1,000 work-from-home allowances: The changing face of work under Covid-19
  20. The Straits Times: Singapore's tighter Covid-19 measures a blow to gym owners, while organisers reschedule, adjust mass sport events
  21. Google Trends: 'Board Game' from May 2019 to May 2021
  22. IKEA: Make Home Count with IKEA
  23. The Business Times: Online sales help some retailers cushion blow from outbreak
  24. The Straits Times: Help for SME retailers to start selling online
  25. The Straits Times: Need for retail to improve return and exchange policies
  26. The Straits Times: Epidemic may speed up supply chain move from China to Asean