Despite waves of positive cases throughout the year, Singapore has managed to keep COVID-19 under control. The island nation has only logged under 60,000 cases (as of Nov. 26) since the beginning of the pandemic.
It is a very impressive feat considering that a significant portion of the population within the city consists of foreigners from all over the world. In late 2019, about 1.68 million out of Singapore’s 5.7 million-strong population are non-residents.
While the virus has since stopped spreading thanks to the efforts of the government and the people, the pandemic has still altered the shopping habits of consumers in Singapore.
Online Shopping on the Rise
Singapore has been pretty ahead in terms of adopting online shopping compared to its neighbors in Southeast Asia. However, the pandemic has caused an increase in purchases via the internet this year, a trend consistent with what has been observed in the rest of the world. Shopping for goods from e-commerce is, of course, the best way to observe physical distancing.
Nielsen reported that two in five Singaporeans, or 34% of the population, have increased their online shopping activities this year. Moreover, three in four (or 76%) of the respondents stated that they will continue to shop online at the same rate after the pandemic.
It is important for entrepreneurs to recognize this shift. Retail may change permanently because of the pandemic. If they have not already, it is time to set aside a portion of the budget toward hiring a digital marketing agency and opening a digital storefront because that is where people are right now and that is what they demand.
Traditional Retail Consumers Forced to Go Online
The pandemic not only caused an increase of spending on e-commerce among online shoppers, but it also converted consumers who have stuck with traditional retail to begin sourcing their necessities, and other things, from shopping websites and apps.
There is no going back. The majority of those who made purchases on the internet this year for the first time for household goods will continue to shop online in the next 12 months or beyond.
Businesses Go Digital
The restrictions imposed in order to stop the spread of the virus led to foot traffic and sales in brick and mortar stores to slow. Many small and medium-sized enterprises (SMEs) in Singapore are still struggling to survive the pandemic. Some entrepreneurs had to diversify their products and services in order to have revenue while the current public health crisis continues to push consumers to retreat in their homes.
In the absence of a vaccine, no one knows when things can go back to normal and, if predictions are correct, the online shopping trends that are observed during the pandemic will continue even after the virus has been eliminated. Businesses may continue to see a decrease in profit in the future.
Many entrepreneurs are preparing themselves for a fully digital retail battleground. Business Times conducted a survey and found that three in four SMEs have already made investments in technology this year to improve their performance.
In addition, thousands of SMEs have applied for the Productivity Solutions Grant, which enabled them to acquire IT solutions and equipment to improve their businesses.
What Singaporeans are Buying Online
Basic living necessities such as food and beverages top the list of purchases made by consumers this year. The spending on groceries online this year grew by approximately 198%, according to Accenture. Meanwhile, restaurants and delivery revenue increased by around 50% with consumers buying more.
However, there has been less demand for other products. The overall revenue for consumer electronics decreased this year. This is despite the increased need for laptops, smartphones, and tablets for remote work and schooling.
Products in the beauty and cosmetics industry saw a decrease in demand this year, too, as people cancel their plans and stay indoors. New purchases for clothes also dropped because of the pandemic.
On the other hand, games, and hobby items received temporary surges. Products for home-based activities became temporarily in demand as consumers looked for ways to entertain themselves indoors.
Increased Priority on Savings
Part of the reason why spending is down in many product categories is because Singaporeans are placing more money into their savings and emergency funds. The pandemic has caused economic uncertainties all over the world. Singapore also entered a recession this year. This has led consumers to spend less on unnecessary products.
One survey found that, across all age groups, saving regularly improved from 87 to 92 points on the OCBC Financial Wellness Index 2020. Travel has become less of a priority while contingency and retirement funds became the primary concern for many people.
The COVID-19 pandemic has presented difficult challenges to consumers and entrepreneurs. Although the public health crisis will end at some point, its effects may last longer and become the new normal. Businesses should brace themselves for any kind of changes that will take place in the future.