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Malaysian eCommerce merchants with ambitions to expand beyond their national borders can always look to the market across the causeway by tapping into Singapore.
Singapore’s developed infrastructure, comparatively wealthy middle-class and high eCommerce penetration makes it an ideal market for Malaysian eCommerce merchants to expand to. Its consumers also have the highest average revenue generated per eCommerce user in Southeast Asia at USD 675.71.1
Singapore’s status as a developed nation means that it has the capabilities and infrastructure to support eCommerce orders and logistics. As of 2020, its internet penetration is at 88%2 and 74% of these users have bought items online,3 which means you’ll have the opportunity of tapping into 3.75 million shoppers in this island nation.
Malaysian products with the potential to do well in Singapore’s eCommerce market include those in the fashion, processed food, and beauty categories. Most Singaporean consumers also enjoy purchasing fashion items online, alongside home and living products and consumer electronics. Specifically, modest fashion from Malaysia can appeal to the Muslim population in Singapore.
With that said, COVID-19’s spread has caused some limitations in logistics fulfilment. These include the likes of limited flights into Singapore. However, since logistics and online retail is considered an essential service, there’s a silver lining for eCommerce merchants. Nevertheless, it helps to stay updated on regulatory changes by looking into Enterprise Singapore4 and the Ministry of Manpower’s5 latest advisories.
Cross border shipping from Malaysia to Singapore may vary from business to business, but they generally fall into these 4 steps.
First mile delivery in international shipping refers to the first stage of the logistics supply chain, where it leaves the merchant’s address, which is also known as the origin. The address can be a storefront, office, or warehouse. Before your goods can leave your storage facility, the product must be packaged and labelled appropriately to facilitate smooth cross border shipping.
While transporting your goods, your packages may go through bumpy rides from events like turbulence. To prevent your goods from bouncing around or getting deformed during shipping it’s recommended to have extra padding like bubble wrap and packing peanuts. If you’d like to learn more about the best practices in packaging your goods, we’ve covered this topic in a previous article.
On top of that, your shipping labels and customs documents need to be labelled clearly and must be accessible for customs inspection. Check out the best practices in labelling your shipments which you can also find in our resources for B2C shipping to Southeast Asia.
Once your shipment is ready to be handed over to your delivery partner, you can choose to have it picked up from your address or drop off your shipment at your shipping partner’s drop-off point. Most shipping partners would have a cut-off time for submitting orders so that they can optimise their route.
B2C parcels would be consolidated at a transportation hub with other packages that are going to the same destination country prior to customs clearance. Meanwhile, B2B shipments can be transported directly to the origin warehouse for customs clearance since they already have a larger weight and volume than individual B2C shipments.
If you’re based in East Malaysia, your shipments will typically be transferred to the Klang Valley region in West Malaysia prior to its cross-border shipping journey into Singapore.
When your parcel arrives at the customs warehouse, Malaysian customs officers will inspect the shipment, including its shipping label and customs documents, to determine if it’s exportable from Malaysia. To check if your B2B parcels require any special permits for export, you may look up Malaysia’s Customs website.6
After your shipments are cleared for export, your options for freight would be to ship to Singapore via air freight, sea freight, or cross-border trucking.
Outside of the current COVID-19 situation, air freight is the preferred option for B2C shipments, especially if you don’t have a consistent order volume and need your parcels to be sent to the destination country quickly. Shipments sent via air freight typically leave from Kuala Lumpur International Airport (KUL) and land at Singapore’s Changi International Airport (SIN).
However, the COVID-19 situation has caused flights to be limited, causing the price for air freight to increase from the lack of cargo space. The flight limitations may also lead to delays in delivery speeds.
If you’re looking to ship in bulk, sea freight is the most cost effective option. It is slightly slower than air freight, so you’ll need to plan out your supply chain and take note of your inventory.
If you’re shipping from Malaysia to Singapore, sea freight shipments enter Singapore via the Port of Singapore (SGSIN) from Port Klang (MYPKG). This is the preferred mode of transport if you’re planning to set up a local distribution centre to expand your presence aggressively. Sea freight shipments can be in full container load (FCL) or less than container load (LCL). Shipping with FCL means that an entire container is used solely for your shipment to Singapore, whereas LCL means your shipments are consolidated with others and you’re paying for a part of the container.
If you’re looking to strike a balance between cost and delivery time, cross-border trucking is the way to go. However, East Malaysia-based merchants will still need to transfer via air or sea freight into Kuala Lumpur International Airport or Port Klang before they can access this option, as cross-border trucks enter Singapore via the Tuas or Woodlands land checkpoints that connect to West Malaysia.
Having a local distribution centre allows you to store and fulfil more effectively within Singapore. But for a strategic location like Singapore, you could also opt to have a regional fulfilment centre at the Free Trade Zone (FTZ) too if you’re looking to serve Singapore and beyond. That’s because goods stored at the FTZ have the benefit of deferring the payment of taxes on non-dutiable goods until they enter a country’s official borders.
Looking for a flexible shipping solution that caters to B2B and B2C shipments? Janio's modular offerings allows you to get your products from Malaysia to Singapore no matter the size! Speak to us today and find out more:
As soon as your shipment arrives in Singapore's airport or port, it’ll be transferred to a customs warehouse for inspection.
To clear customs for import into Singapore, you or your shipping partner would generally need to provide the following documents:
If your item is below Singapore’s de minimis rate of SGD 400, there is no need to pay for import duties and taxes.
The de minimis rate refers to a price threshold where no duties and taxes are charged if the shipment’s value is below that point. This value takes into account your shipment’s CIF value, which includes your good’s price, shipping fee, and insurance costs if any.
However, this exemption only applies to deliveries made via air freight, so shipping from Malaysia via sea freight and cross-border trucking still requires you to pay duties and taxes.
If your goods exceed the de minimis threshold, you’ll need to pay import duties and GST to Singapore’s customs. Singapore’s GST is at 7%, and the import duties depend on the product category as declared by the harmonised systems code (HS code). You may find out the percentage of your import duties paid through Singapore’s Customs website.7
When shipping a B2C parcel, you can choose to either pay for the import duties and taxes yourself or let your customers pay for the import duties and taxes. This can be determined from the incoterm you choose, which is Delivered Duties Unpaid (DDU) or Delivered Duties Paid (DDP). While we strongly encourage you to opt for DDP to keep your shipping experience smooth, it helps to familiarise with what these arrangements mean for your eCommerce customer.
Once your shipment has cleared customs, it will enter the distribution stage of the shipping journey. If your shipment is B2B, it can automatically enter the last mile delivery stage, otherwise, B2C shipments will be sorted at a transportation hub prior to last mile delivery.
Last mile delivery means that your parcels will be sent from the destination warehouse to your consignee’s address. This stage of delivery is done via vans within Singapore. During this stage, your logistics service provider will work to ensure that your shipment is received by your consignee. This is typically done through multiple delivery attempts on your consignee’s address.
Now that you know the steps in shipping your items from Malaysia to Singapore, you’re better informed on how to choose a suitable shipping partner. It’s best to find one who can cover the entire logistics service, or one that can fit into your existing supply chain. Before committing to a contract with a logistics service provider, it helps to consider the cost, speed, and your supply chain’s needs.
As Singaporeans enjoy the developed infrastructures in place, they tend to have high expectations on the eCommerce experience from click to delivery. To delight your potential customers in Singapore, it helps to have a reliable eCommerce logistics partner that can deliver on time so that they keep coming back for more.
If you’d like to find out more about how we can solve your SEA eCommerce cross-border delivery needs, come and have a conversation with us.
We have other guides on how to ship from Malaysia to Southeast Asian destinations here:
For more information on Malaysia as a destination, we also have these guide here:
References:
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