Global online retailer Amazon has gained a firm foothold in Singapore by promising speedy shopping service and low prices, but do consumers love it or loathe it?
Picture a regular suburban neighbourhood. A woman arrives home from work on a rainy afternoon, and she and her children are soaked through. She dumps the kids’ wet clothes in the washing machine, but when she goes to add the detergent she finds it has run out. Her feet are aching, her back is sore and she can’t face a peak-hour run to the supermarket.
“Alexa,” she addresses her voiceactivated personal assistant, “order more washing liquid.” She’s exhausted, and the thought of cooking dinner makes her heart sink. “Alexa, order dinner from the Italian restaurant I like around the corner,” she says, then adds: “Oh, and I want a bottle of red wine too.”
The food and wine will arrive in less than two hours; the detergent the next day. This isn’t a scene from a sciencefiction film: It’s happening right now. In Seattle, London and parts of the US where Amazon has rolled out its latest suite of services, people are changing the way they shop.
Since the launch of intelligent virtual assistant Alexa in 2014 and its hands free add-on speaker Echo just two years later, one-click shopping has evolved to click-free shopping. The free-delivery membership programme Amazon offers, Prime, means customers can have everything from sushi to bath salts delivered within a two-hour time frame, just by asking.
Meanwhile, the retail giant has already rolled out Amazon Prime in Singapore selling clothes, electronics, groceries and more. Still, it remains tight-lipped on whether its other innovations – like the cashless and cashier-less Go store – will follow.
While many people think of Amazon as a book retailer that has expanded into general consumer goods, the company sees itself as a customer-focused tech innovator. It has invested in everything from artificial intelligence to drone technology – the latter being part of a project called Amazon Prime Air, which aims to develop parcel delivery to safely reach customers within 30 minutes.
Consumer and retail groups say Amazon’s arrival will lead lower prices and better service. The dark side to this vision of the future is a digital monster that eats local retail, according to financial services group Morgan Stanley.
Its analysts have even gone as far as dubbing Amazon a “country killer” and predicted that the online retailer’s mere presence in a new region would lead to a shake-up in the retail sector. “To be ‘Amazon-ed’ means to watch helplessly as the online upstart from Seattle vacuums up the customers and profits of your traditional brick-andmortar business,” journalist Brad Stone wrote in his book about Amazon, The Everything Store: Jeff Bezos And The Age Of Amazon.
So far, the reality in Singapore couldn’t be more different. Amazon has faced some tough hurdles on local shores with delivery delays marring its debut here in July, when on-the-ground operations began with Prime Now twohour deliveries.
Even the consumers who were excited about the launch of its membership Prime service in December were let down by what they say were limited offerings and compatibility issues between its app and desktop versions. Customers were also dissatisfied by the lack of content on Prime Video — widely touted as an alternative to Netflix.
“I did wonder how Amazon’s business model would work here. The inventory isn’t great, for now, and the price is no different from local players like Redmart or FairPrice. Why would I pay to sign up for Prime membership then?” laments Ivy Tan, a 32-yearold financial executive who used to regularly shop on the retailer’s US site.
However, experts say it may be too early to rule Amazon out of the game. “The dizzying pace of e-commerce development may make it seem like overnight successes are aplenty and easy to achieve. The truth can’t be further from that,” says Candice Ong, Chief Commercial Officer at ShopBack.
“While Amazon is a mature marketplace that’s been around since 1994, it’s a very new player in this part of the world. Bigger e-commerce players have been navigating the Southeast Asia market for at least five to six years, but it’s only been slightly more than half a year for Amazon.”
She adds that it may be harder for Amazon to play catch-up in its infancy, but it’s not impossible.
“In fact, Amazon has a history of doing so in new markets that they’ve entered, such as India and Japan. Today, they’ve grown to become a significant player to be reckoned with in those countries. Don’t forget also that Amazon’s arrival is also a strong signal that our region is recognised as a sizeable market with a strong potential for growth.”
"Singaporean consumers are a fickle bunch, and while Amazon’s debut was greeted with enthusiasm, many feel the company has come up short on their promises."
Singapore will be the 16th country – and the first in South-east Asia – to launch Amazon Prime, which gives members perks such as free shipping and access to other services like Amazon Prime Video, for a monthly or yearly fee.
The Prime membership here will cost $8.99 per month. But for a limited period, it will go for $2.99 a month with a 30-day free trial for new members, although Amazon did not specify how long the offer will last.
Membership in the US costs US$10.99 (S$14.50) a month or US$99 (S$131) a year, and provides access to a slew of services such as music streaming, free same-day delivery and even restaurant delivery in certain areas.
Speaking to The Weekly via an email interview, Amazon Prime International’s vice-president Jamil Ghani said the company will keep making Prime better, adding even more choices and benefits.
“Amazon Prime was originally conceived as a convenience program – designed to make customers’ lives easier. We spent many years innovating within our supply chain and transportation capabilities. We wanted to offer customers more predictable shipping and an all-you-can-eat model. By signing up, people can simply unlock the best of Amazon,” said Jamil, who declined to provide any specifics on how much Singaporeans have spent on Amazon’s local store so far.
“We have been very encouraged by the strong response and adoption of Prime Now over the last several months,” he added.
The retailer’s presence in Singapore could eventually include all of the futuristic features described earlier and more – like the Amazon Go store being piloted in Seattle. In this check-out free real-world shop, customers using the Amazon Go app walk in, fill up their baskets, and then walk out again.
The app automatically keeps track of shopping items in a virtual cart, and after the customers leave the store, it charges their Amazon accounts and sends a receipt via email.
The app detects when items are removed or returned to the shelves, using the same vision and sensor technology in self-driving cars.
KPMG Consumer Markets expert Trent Duvall expects it to introduce more initiatives bit by bit. “They will try a bunch of their different options and adapt those, and slowly over time roll out more and more, depending on what they see the local consumer wanting and using,” he says.
FOR THE LOVE OF SHOPPING
According to some consumers though, much of the pleasure of shopping comes from the personal in-store experience.
“I like the experience, sights and even the sounds of shopping in stores. It’s definitely more convenient in Singapore to just nip down to a shopping mall; everything is pretty much within reach. I only shop online for things I can’t easily buy in Singapore, on sites like Taobao and Amazon,” reveals Lisa Tan, a 32-year-old small business owner.
Singapore, a country of 5.6 million, trails most of the developed world when it comes to e-commerce. Just 4.6 per cent of Singapore’s retail sales took place online last year, compared with 15 per cent in the UK, and 10 per cent in the US, according to market researcher Euromonitor International.
In terms of scale, too, Amazon lags behind local web store Lazada and its parent, Alibaba Group Holding Limited, but the US-based giant is unfazed.
“We don’t obsess about competitors; we obsess about customers. We believe Prime is the best deal in the history of shopping and we are happy to offer it to consumers in Singapore,” affirms Jamil.
“There is huge potential for the e-commerce industry in Singapore,” he adds. “With tens of millions of members being part of the most convenient way to shop, Amazon will continue to create new and expanding innovations for our customers that will move the direction of online shopping forward for the retail industry in Singapore.”
Other e-commerce experts are equally optimistic on the future of Singapore’s online retail sales.
“The buzz of online shopping and seeming decline of offline retail may create the illusion that the former is taking the bulk of retail market share. However, online shopping only constitutes less than five per cent of today’s retail market share. To unlock the rest of the 95 per cent, we need to educate the consumers to bring their spending online,” says Candice.
“Additionally, more players in the field will lead to more creative ways of reaching out to consumers in an attempt to win the game – so consumers will benefit at the end of the day.”
Whether they choose to embrace Amazon or not, it seems the arrival of the online giant will be a win for Singaporean shoppers.
AMAZON SINGAPORE AT A GLANCE
What’s the deal with Amazon? Here’s everything you need top know on the US e-commerce giant’s local offerings
WHEN DID IT LAUNCH?
Amazon launched its Prime membership programme for Singapore in December 2017, ending a fouryear period of blanket free shipping to the Republic under the Free AmazonGlobal Saver Shipping option. A mixture of confusion and frustration has greeted the new offering from the online giant, which first started delivering locally in July 2017 with its Prime Now service.
PRIME AND PRIME NOW: WHAT’S THE DIFFERENCE?
Prime Now is the company’s ultra-fast two-hour shipping service. It used to be available to anyone here who signed up, but now you have to be a Prime member to enjoy the fast delivery. Amazon is encouraging people to sign up for its paid membership, which at press time is going for an introductory rate of $2.99. This Prime subscription also gives you access to video streaming service Prime Video, and gaming service Twitch Prime.
BUT WE CAN ALREADY BUY FROM AMAZON US: WHAT WILL CHANGE?
Another benefit you receive as a new Prime member for Singapore is free shipping for international orders of more than $60 on the US store. Shoppers in Singapore were previously eligible for free international shipping with a minimum order of US$125 ($168) for qualifying merchandise. But with the launch of Amazon Prime, “unlimited free international shipping will now be exclusively a Prime member benefit moving forward”, according to Amazon.
IS THERE A DARK SIDE?
If you have signed up for Prime membership with Amazon’s US store previously, you cannot transfer that membership to the Singapore one. So, if you want to enjoy the benefits of the local Amazon Prime service, you have to sign up for a new Singapore-based account. For more details, visit amazon.com.sg/primenow, or download the Prime Now app on the App Store or Google Play Store.
SO, IT IS WORTH IT?
No one platform has everything under the sun, and ultimately, your choice boils down to which has the item you want at the better price. Be aware that inventory, prices and offers change frequently throughout the year for online platforms: So be a smart shopper and look out for the best deals on a variety of websites like Amazon, Lazada, Qoo10 and so on.
TEXT: GENEVIEVE GANNON/BAUERSYNDICATION.COM.AU / ADDITIONAL REPORTING: NATALYA MOLOK / PHOTOS: 123RF.COM