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Indonesia is no doubt a big market, but it’s also part of ASEAN, one of the larger economic blocs in the world. Beyond Indonesia, one of these Southeast Asian markets that eCommerce businesses already operating in Indonesia could tap into is Singapore, where the customers have the highest average revenue generated per user at USD 675.71 in Southeast Asia.1
As a developed nation, Singapore has the infrastructure to support eCommerce orders and fulfilment. The country is 100% urbanised,2 and its internet penetration is at 88%.3 Among these users, 74% of them have bought items online.4 We’ve also covered Singapore’s eCommerce market extensively in our downloadable Singapore country guide.
In terms Indonesia’s export potential, items in the fashion, processed foods, and beauty verticals tend to do well. The fashion vertical specifically has the biggest export potential into Singapore, as it is considered a top product category for eCommerce alongside home and living products and consumer electronics. Particularly, modest wear and halal products can appeal to the Muslim population in Singapore.
However, the COVID-19 situation has caused flights into Singapore to be limited. While eCommerce and delivery are considered an essential service within Singapore’s circuit breaker measures, it helps to stay on top of regulatory changes if you plan to ship into the island nation. Some resources you can follow include Enterprise Singapore5 and the Ministry of Manpower.6
The logistics supply chain from Indonesia to Singapore can vary depending on your requirements and location. However, shipping from Indonesia to Singapore would usually be done in these steps.
First mile delivery in international shipping refers to the first stage of the logistics supply chain, where it leaves the merchant’s address also known as the origin. The address can be a storefront, office, or warehouse. Prior to your goods leaving your storage facility, the product has to 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. Thus, having extra padding is recommended for fragile items, like using bubble wrap and packing peanuts. This is to prevent your goods from bouncing around or getting deformed during shipping. To learn more about the best practices in packaging your goods, we’ve covered this topic in a previous article.
On top of that, you need to ensure that your shipping labels and customs documents are labelled clearly and accessible for customs inspection. Check out the best practices in labelling your shipments which you can also find in our B2C Southeast Asia shipping resources, too.
When you’re ready to hand over your shipments to your logistics 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 will typically be consolidated at a transportation hub along with other packages with the same destination country prior to customs clearance. Otherwise, B2B shipments can be transported directly to the origin warehouse for customs clearance since they already make up a larger weight and volume compared to individual B2C shipments.
Depending on where your address is located, your parcel may need to be transported via a domestic flight to an international airport or port. As of now, the shortest direct flight into Singapore is from Soekarno-Hatta International Airport. It is also the busiest airport in Indonesia.7 As for ports, international shipments typically leave from Tanjung Priok in North Jakarta.
When your parcel arrives at the origin warehouse, Indonesian customs officers will inspect the shipment to determine if it’s exportable from Indonesia. This is where they will first inspect your parcel’s shipping labels and documentation. To check if your B2B parcels require any special permits for export, you may look up Indonesia’s Customs website.8
After your shipments are cleared for export, your options for freight would be to ship to Singapore via air freight or sea freight.
For merchants shipping B2C parcels, air freight is the faster option, especially if you’re testing Singapore’s market and need to ensure that your parcels reach your customers quickly. Shipments typically leave Indonesia from Soekarno Hatta International Airport (CGK) to Singapore’s Changi International Airport (SIN).
Usually, air freight is the preferred mode of transport for B2C eCommerce merchants due to its speed. However, in light of COVID-19, flights have been 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.
However, if you’re looking to ship in bulk, sea freight is the more 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.
Sea freight shipments enter Singapore via the Port of Singapore (SGSIN) from ports in Indonesia like Tanjung Priok (IDTPP). This is the preferred mode of transport if you’re planning to set up a local distribution centre to expand your presence aggressively. Shipments that are delivered via sea freight can be in full container load (FCL) or less than container load (LCL). Shipping with FCL means that you’re paying for an entire container to ship to Singapore, whereas LCL means you’re paying for part of the container, where the shipments are consolidated with other shippers’ shipments.
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.
Considering the shortage of international flights with the COVID-19 pandemic around, sea freight could be a good alternative to air freight even for B2C deliveries. While slightly slower compared to pre-COVID air freight timings, it is still preferable as opposed to facing possible delays if you choose air freight during this period.
Your shipment will be transferred to a customs warehouse as soon as it arrives in Singapore’s airport or port.
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 the goods and services tax (GST) and import duties.
The de minimis rate refers to a price threshold where no duties and taxes are charged if the shipment’s CIF value is below that point. The CIF value includes your good’s price, shipping fee, and insurance costs if any. But this exemption only applies to deliveries made via air freight, so shipping from Indonesia via sea freight still requires you to pay duties and taxes.
However, 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.9
If you’re 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 is determined by the incoterms Delivered Duties Unpaid (DDU) and Delivered Duties Paid (DDP). While we strongly encourage you to opt for DDP to keep your shipping experience smooth for your B2C customer, it helps to familiarise with what these arrangements mean.
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 stage, otherwise, B2C shipments will have to be sorted at a transportation hub prior to last mile delivery.
Your parcels in the last mile delivery stage will be sent from the destination warehouse to your consignee’s address. This stage of delivery is done via vans within Singapore. During the last mile delivery stage, your logistics service provider will ensure that your shipment is received by your consignee with a few delivery attempts.
Now that you know the steps in shipping your items from Indonesia to Singapore, you’re in a better position to choose a suitable shipping partner who can cover the entire logistics service, or to find one that can fit into your existing supply chain. When choosing a logistics service provider, it helps to consider the cost, speed, delivery experience, and your whole supply chain before committing to a shipping solution.
With Singapore being a developed nation, it’s all the more important to leave a good impression on your customers as they have high expectations on the eCommerce experience. To delight your potential customers in Singapore, it helps to have a reliable eCommerce delivery partner that can deliver on time so that they keep coming back for more.
Looking to ship internationally throughout Southeast Asia? Contact us to find out how.
We have other guides on how to ship from Indonesia to Southeast Asian destinations here:
For more information on Indonesia as a destination, we also have these guide here:
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