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2020 was a year filled with unexpected challenges and sweeping changes. Amidst the COVID-19 pandemic, many businesses all around the world struggled to stay afloat as they faced reduced traffic to physical stores due to lockdowns implemented by governments.
At the peak of the COVID-19 pandemic in Singapore, the government introduced circuit breaker measures, mandating most residents to remain at home – unless they were in essential services such as F&B.1 Shopping malls and other public spaces were deserted for a period of a few weeks from 7th April 2020 to 1st June 2020 until the situation stabilised.
As a result, the COVID-19 crisis saw a shift in Singaporean consumers’ behaviour. Due to not being able to shop in brick-and-mortar shops during the lockdown, many people turned to online shopping. Driven by high-value shoppers nationwide, iPrice recorded that Singaporeans spent an average of S$113 online during this unprecedented period from January to June 2020.2 The study also found that the average basket size had also increased by 51% when compared to the same period last year.
In the second half of 2020, the Singaporean government rolled out different phases to gradually ease movement restrictions. Residents were allowed to engage in more social activities with friends and family and meet friends and relatives – albeit in controlled numbers and with precautionary measures.
In this new normal, even though real total consumer spending on clothing and footwear in Singapore dropped from 2,865 billion U.S. dollars in 2019 to 2,217 billion U.S. dollars in 2020, it is again set to increase to 2,234 billion U.S. dollars in 2021,3 based on adjusted estimates from Statista.
In the first part of a two-part series on fashion and eCommerce trends in Singapore, we will be exploring the consumer profile and behaviour of fashion shoppers in the country. In the second part of the series, we will dive deeper into the product trends that consumers are interested in.
Now, before we find out how consumers in Singapore have been shopping for fashion during the past year, let’s first understand who exactly these fashion consumers are.
In 2020, 24.7% of all online fashion shoppers in Singapore fall in the 25 – 34 years old age group, forming fashion’s largest consumer segment.4 This group of shoppers are known as the millennials – most of whom are in the workforce and have a decent amount of income to spend.5
According to a different survey by Rakuten Insight that measures the percentage of online shoppers in each age group who shopped for fashion during the COVID-19 pandemic, the Gen Zs have the highest percentage at 39%, topping even the millennials who had only 29% of their age group purchasing fashion items online during the same period.6
Both these groups of consumers are said to represent a new generation of shoppers, influencing the way brands need to portray themselves and disrupting their traditional selling blueprints. Targeting these two consumer groups could be helpful to your business even in the unlikely but possible event of another lockdown in Singapore.
In an article about millennials’ spending habits, they were termed as the “aspirational class” – individuals who are constantly seeking out brands that align with their beliefs, morals and way of life.7 For instance, when shopping for sustainable or luxury items, they may want to first find out if the brand’s values are actually in line with their own before making the purchase. This will be further explored in the next article that delves deeper into sustainable and luxury fashion trends.
On top of that, this market segment tends to have higher expectations of a mobile-first, seamless retail experience that includes shopping, payment, delivery and customer service. They are also driven by a need for self-expression, which then determines the way they make their purchase decisions. This suggests that it might be helpful for your fashion brand to also have a clear identity to appeal to these consumers who are looking out for characteristics they can relate to.
Additionally, according to another survey by Rakuten Insight, 38% of female and 32% of male respondents stated that they purchased fashion items online during the COVID-19 pandemic as of May 2020.9 To get a sense of how large this number is in absolute figures, 38% of the female population in Singapore is approximately 1.1 million people, while 32% of the male population in Singapore is approximately 960,000 people.
Based on the survey, while there are slightly more female shoppers who shop online for fashion than male, the number of male consumers is no small figure. Thus, this means that it would still be beneficial to target either segment.
In a survey conducted by Milieu Insight in 2020,10 a sizable 33% of consumers in Singapore were willing to spend the same amount of money, if not more, on fashion compared to before the crisis.
Furthermore, the per capita spending on clothing and footwear in Singapore was projected to be among the top few in Asia at $366.67 U.S. dollars in 2020 according to Statista.11 This is nearly on par with China’s $389.71 U.S. dollars, and is much higher than other Southeast Asian countries such as Malaysia’s $132.61 U.S. dollars and Indonesia’s $68.65 U.S. dollars.
At $366.67 U.S. dollars, a consumer can buy several pieces of inexpensive apparel or footwear over the year. However, if you own a luxury business, you might want to take note of how there has been reduced domestic spending on luxury goods due to the pandemic.
According to Euromonitor, the home seclusion trend could impact personal luxury categories such as designer apparel and footwear (ready-to-wear) and luxury jewellery.12 This might make it challenging for you to enter Singapore at this moment, but as our next article will explore deeper into, there is still hope for an uplift in luxury fashion sales in the later part of 2021 or 2022.
Nonetheless, if you’re looking to expand your fashion business to a Southeast Asian country, Singapore can still be a great place to start. According to SingStat’s 2018 report on Household Expenditure in Singapore, households spent an average of $123 on footwear and apparel monthly before the pandemic, which adds up to nearly $1,500 a year.13
Additionally, consumers here tend to have higher incomes relative to neighbouring countries. For instance, the median Singaporean income is $4,534,14 compared to Malaysia’s that falls slightly below $2,000.15 This suggests that Singaporean consumers might have more money on hand to spend on clothing and footwear.
Singaporeans are digitally savvy with an internet penetration rate of 88.4% of the population as of June 2020,16 which is higher than other Southeast Asian countries with the exception of Brunei. Additionally, shoppers in Singapore are only second to their counterparts in Hong Kong in the Asia Pacific region in terms of buying things from overseas. An Ipsos study commissioned by PayPal found that around 73 per cent of online shoppers here bought items from overseas in 2018.17
This suggests that appealing to consumers in Singapore as a new and foreign fashion brand is still highly possible, and keeping your business active online can certainly be one way to reach your Singaporean consumers. This is especially so when contactless or home shopping is much more desirable during this pandemic.
Therefore, to better understand Singaporean consumers’ habits and behaviours, it helps to dive into how they shop for fashion.
While Singapore’s retail sales in fashion have fallen in recent years, online shopping has increased.3 It is estimated that 10% of total market revenue will be generated through online sales by 2023, as opposed to 3% in 2017.3 In a May 2020 survey conducted by Rakuten Insight and published by Statista, 79 percent of Singaporean respondents mentioned that they would continue shopping online even after social distancing measures were lifted during the COVID-19 pandemic.18
Compared to physical retail, online retail has a competitive advantage in terms of lower cost without rental of physical spaces, and high mobile penetration among young adults in Singapore. Shoppers’ growing familiarity with online shopping, paired with fast and reliable delivery services to instantly satisfy consumers, makes things much more convenient for consumers.
Unsurprisingly, the most popular fashion-focused eCommerce site in Singapore as of the second quarter of 2020 is Zalora with 935,100 monthly web visits, followed by Reebonz with 331,000 monthly web visits and Love, Bonito with 324,200 monthly web visits.20
When looking at top eCommerce sites by monthly visits in general in 2020, Shopee, Lazada, and Qoo10 topped the list – all of which are eCommerce marketplaces that host multiple sellers who sell most kinds of products.21
While Zalora mostly sells casual clothing from brands with mid-range pricing such as Cotton On and Adidas, Reebonz mostly sells luxury products from brands such as Prada and Versace. Love, Bonito on the other hand is a home-grown brand with both online and offline stores, and is known for creating clothes for Asian women.
Nonetheless, according to a report by Econsultancy, solely relying on popular and established branding is no longer sufficient to attract younger consumers. Just 11% of young consumers cite having a prestigious or famous brand as one of their top three attributes of an online store, while only 9% choose having a physical store.22
This means that it is important to ensure that your consumers have a fuss-free and enjoyable shopping journey, because it can make up for the lack of brand popularity or physical retail experience.
If you’re a new fashion business looking to enter Singapore from overseas, popular eCommerce platforms in Singapore like Lazada, Shopee and Qoo10 can be a great way to enter the market. They host a large variety of brands not limited to prestigious ones, and some merchants on these eCommerce platforms are even small home businesses that managed to gain a following from their attractive products.
In addition, it might be helpful to take note of how consumers tend to enjoy going on eCommerce platforms because it allows them to compare the benefits they can get from different stores. For instance, they can easily check the price, discounts, shipping fee or delivery duration of each listing before making a final decision of whom to purchase from. Hence, while it’s good that popular eCommerce platforms have high traffic, it’s likely that competition tends to be higher too.
Campaigns from the likes of these platforms, such as large-scale promotions on special shopping events like 618 and 11.11, have contributed to the massive growth of cross border eCommerce and benefited the development of many overseas brands.
Lazada, a leading eCommerce platform in Southeast Asia launched an “in-app feature of Lazada optimised for live stream sales” called Lazlive recently.23 The feature saw a massive growth amid the pandemic, with overall gross merchandise value growing 17 times year-on-year in June 2020. Some of the top product categories sold through this feature were health and beauty, electronics and also fashion.
While newer merchants might need to work harder to get their brand experience perfect to gain potential customer’s attention and convert interest to purchase, consumers’ reduced preference for famous brands provides an opportunity for newer brands to compete with existing ones.
Across the globe, the rise of social media usage, particularly on sites like TikTok and Instagram, has seen fashion trends becoming simultaneously more accessible and varied to the masses. The liberalisation of content allowed people from all walks of life to explore different styles through lookbooks and fashion try-on videos.24
As of the third quarter of 2019, YouTube and WhatsApp have a penetration rate of over 80% in Singapore, while Facebook and Instagram have a penetration rate of 79% and 62% respectively.25 In 2020, Singaporeans were spending 3.6 hours online (for personal use) pre-COVID-19, which spiked to 4.5 hours at the height of lockdowns, and now rests at 4.1 hours per day.
With 8 out of 10 users viewing technology as very helpful during the pandemic, it means that if you’re active enough on digital platforms, your products can appear as “solutions” to the queries that consumers have. For instance, if a consumer is looking for special footwear that fits an odd-size, your footwear advertisement can be the answer to his or her query. Getting social media influencers to explain the unique traits of your fashion products can also be another way to engage Singaporean consumers who are frequently online.
Furthermore, the direct integration of shopping functionality into the content display on social media, enabling high-speed, “inspire and sell” customer conversion is also becoming increasingly popular. According to Instagram, 50% of people have visited a website to make a purchase after seeing a product or service in Instagram Stories, while 55% of fashion shoppers have made a purchase based on an Instagram Creator Account’s post.26
Similarly, Instagram Checkout which was rolled out a few years ago has now taken over an entire tab on the mobile application, allowing users to scroll through shops, collections, Editor’s Picks, guides, and promotional videos all at once.
Thus, appealing to consumers through social media is now more significant than ever to get greater access to your target segment. Furthermore, as consumers are increasingly shifting from desktop to mobile, improving mobile browsing and checkout experience should be at the top of your priority list.3
While foreign fashion brands like Zara and Pull & Bear have been revamping their existing physical sales sites often by expanding the space in key stores, local brands like Love Bonito have been investing in in-store tech.27 These developments focus on enhancing the particular qualities of the in-store experience and increasing the convenience of the shopping process.
This is crucial because some consumers may remain apprehensive at the prospect of shopping in a physical environment during the pandemic and would prefer minimising contact with other shoppers or staff members. Improving the physical shopping experience can help businesses regain the lost traffic from the peak of the pandemic, and also gain new customers who prefer omnichannel shopping.
According to Neilsen, as of May 2020, 66% of global consumers were omnichannel shoppers, with the rates higher in Asia-Pacific at 78%. Furthermore, Euromonitor’s Digital Consumer Survey fielded from March to April 2020 revealed that 35% of respondents prefer the option of scan-as-you-go and walk-in, walk-out technologies, as the top two options that would improve their in-store experience.27
Thus, it would be good to consistently look out for improvements that can be made at your physical outlets to attract more consumers. For instance, many contactless mechanisms have already been successfully deployed by store-based retailers, with an overall push to minimise stress among consumers with heightened health and safety concerns.
For example, sports retailer Decathlon is using a combination of Radio Frequency Identification (RFID), smart tags and mobile payments to enable customers to use self-checkout kiosks at its newest stores without needing to scan the barcodes on the items they have placed in their shopping basket. Similarly, fashion retail brand UNIQLO also uses self-checkouts, where customers put in items in self-checkout machines and each machine calculates the total amount.27
Hence, while eCommerce is expected to grow much faster than physical retail, revenue from offline shopping still forms 90% of total fashion revenue in Singapore. Therefore, physical stores can work to complement the online store in providing value-added services such as experiential shopping or customer touchpoints that cannot be done online.22
Among Southeast Asian countries, Singapore holds the highest ePayment users of all, as 30% of online shoppers use their mobile devices to make purchases at least once a week. While 56% of eCommerce transactions in Singapore in 2019 were made by card, 18% were made by digital/mobile wallets.29
Of the major ePayment services used among respondents in Singapore in 2020, 62% of users indicated that they used DBS PayLah!, while PayPal and GrabPay both received 51% usage rate. Other significant ePayment services include Favepay, Apple Pay, Google Pay, Singtel Dash and Samsung Pay.30 It would definitely be helpful to integrate some of these payment methods into your online store or physical store to allow Singaporean consumers to freely choose whichever method they prefer.
Additionally, as millennials and Gen Zs increasingly prefer flexibility in managing their finances, Buy Now Pay Later (BNPL) payment methods are becoming more popular.31 These payment methods, such as Atome and hoolah, allow shoppers to spread out the payments for their purchases over several payments and with zero percent interest, with little to no admin or annual fees.
This enables shoppers to stretch their dollar and pay less upfront, leading to bigger baskets and better conversion for brands. According to a media statement by hoolah, its website visitors increased by 500 per cent at the height of the pandemic, with a sevenfold increase in total transactions made via the platform.32 Thus, if you’re able to include BNPL payment methods into your retail system, you might very well gain the support of more consumers in Singapore.
Before we end off, let’s summarise what new businesses can take note of when entering into Singapore’s fashion market.
When entering any new market, businesses have to ensure that customers can enjoy a seamless experience when shopping for fashion products – and this means that you’ll have to cater to their unique needs regardless of online or offline. In particular, if you’re looking to target Gen Zs and Millennials in Singapore who are familiar with both forms of retail, it would be good to synergise your physical and eCommerce stores so that consumers can enjoy a smooth omnichannel experience.
For instance, a typical Gen Z shopper may see a Nike ad on Instagram, check out its online store, add a product to cart, and head down to its flagship store to try on the item while being immersed in a specially curated ambience, and then go home to buy the product online again.7 According to a Janio survey on fashion, this appears to be particularly common for items like shoes that require a more precise fitting before purchase. For such cases, all aspects of the various touch points must still be outstanding for consumers to make the purchase.
As mentioned earlier, it is important to know what Singaporean consumers appreciate as they tend to check if a brand has similar values to them, and would be willing to switch to newer brands that can provide a better shopping experience. This includes offering an array of payment methods, keeping up with promotional campaigns, or providing quality customer support.
For instance, to complement its eCommerce site, womenswear brand Reckless Ericka has launched a Whatsapp Business line, where customers can chat directly with the team to receive styling tips, browse the catalogue and even make purchases.33
With this new generation of consumers preferring flexibility and a multi-channel approach to their consumption behaviours7, retailers would do well by providing an on-demand, quick and easy shopping experience. This should begin right when consumers browse for products either online or in stores, and finally to checkout and delivery.
This means that it is crucial for retailers to partner with a reliable logistics service provider who can deliver goods on time and in good condition. Regardless of whether it is customs clearance or first mile, from your doorstep to the airport, consumers will be mindful of the entire shopping journey, of which delivery plays a huge role – as seen in nearly every other review on eCommerce platforms.
As things in Singapore start to return to normal, it remains important to provide consumers with a quality shopping experience. With Janio’s experience in eCommerce logistics and international shipping throughout Southeast Asia and beyond, it’ll make things much easier for you to partner with us when expanding into Singapore’s fashion market.
In our next article, we’ll be talking about what fashion consumers in Singapore are looking for – particularly in terms of product and market trends. Stay tuned for that!
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