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50 Billion Connected Devices In the World By 2020: E-Commerce Is Unstoppable

They are undergoing explosive growth.

There will be about 50 billion connected devices in the world by 2020. This means that by then, every person will be connected to 10 gadgets. Digital economy is the key to realizing Singapore’s smart nation vision. However, valuing an E-Commerce company is no easy feat, especially when it is difficult to gauge their costs and revenue. SGX held an investor education seminar on E-commerce to shed light on this sector’s developments.

Different Performance Indicators

Companies that do not have a physical store tend to be relatively new. Traditionally, we would assess them based on profit. For E-Commerce firms, investors will have to evaluate them based on different indicators. Some indicators include revenue growth, customer growth, and market size.

E-Commerce Responds To Our Lifestyle

Yuuzoo is the first social media company to be listed on SGX. Yuuzoo’s CEO James Sundram shared, “E-Commerce is actually good even though people think it makes retailers go out of job.” In Singapore, as well as the rest of the world, the cost of labour is expensive. Expanding physical stores is a costly move for retailers.

Nonetheless, the E-Commerce sector has their problems too. They need strong transportation, logistics, and FinTech support. However, FinTech’s relatively early stage of development may be an obstacle. There are countries with a huge potential market such as Indonesia and India, are still lacking the facilities for intuitive use of E-Payments.

Brick and mortar stores are also responding to the E-Commerce trend. Shoppers can now “click and collect” their purchases at NTUC Fairprice, Guardian, Harvey Norman, and The Shoppes at Marina Bay Sands. The online platform can increase net sales by improving the average transaction, which occurs once customers are at the store to collect their purchases (aka tempting them to buy more at the store). More consumers will prefer to switch to a firm that makes it very easy for them to get their merchandise quickly and easily, thus increasing the e-retailer’s conversion rates. Hence, even brick and mortar stores can benefit from having an online shopping platform.

Facebook is the source of 64% of social sales worldwide. On Instagram, it is possible to go from a picture directly to a product page. This gets even more interesting when celebrities or influencers promote products. 93% of Pinterest users have bought something online in the last 6 months. This means consumers expect brands to be relevant and also provide a personalized experience.

Read Also: How To Build Your E-Commerce Business

Love, Bonito Shares Their Story

Love, Bonito’s Co-Founder Viola Tan shares her company’s story. Love, Bonito was founded by Viola, her sister Velda, and their friend Rachel Lim in 2005 with just $500. At the beginning, the founding team visited Bangkok to source for items to sell on their website. They saw a need to bring more labels and brands to Singapore. Being such a small market, Viola and her co-founders felt that they were limited to shopping at retailers like Forever 21. They wanted to make a change, and sourced clothes from wholesale markets.

Today they are Singapore’s largest E-Commerce fashion label. Love, Bonito is no longer a marketplace, they have established their in-house label, with their own team of designers. They have expanded to Malaysia and Indonesia, and recently closed their first round of funding with NSI Ventures. Love, bonito has their comparative advantage figured out. They perfected the Asian fit that fashion retailers like Zara, H&M, and other foreign brands have not. This makes Southeast Asia their playground.

Singapore’s internet penetration is highest in the world. With a population of 5 million people, Singaporeans make 10 million transactions per day. That is 2 transactions per person daily. Our infrastructure supports E-Commerce, but our market size too small compared to Malaysia and Indonesia.

“IPO Is Just The Start”

Carro, Singapore’s leading used car marketplace, successfully raised US$5.3 million in Series A funds led by Venturra Capital. Aaron Tan, the CEO of Carro, was previously a fund manager. He shared that IPO is just the start of a company’s progress, and there is a lot of work to get there. He warned that it is not so straightforward. Nonetheless, an E-Commerce IPO has its benefits. “There’s a lot of upside going public, especially the visibility the company gets,” he said.

Read Also: Singapore-Based Online Shoppers May Need To Start Paying Taxes Soon aims to provide interesting, bite-sized and relevant financial articles.

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