IGD has called Amazon's entry into the Singapore market, where it has launched Amazon Prime Now, a "huge opportunity" for the retailer.
The market analyst's programme director for Singapore, Shirley Zhu, said that that Amazon's introduction to the southeast Asian market opened it up to sales growth, but also warned that the region represented an "extremely competitive" market.
“Singapore has affluent consumers with busy lifestyles, a big expat population and high internet penetration," explained Zhu. "It is also the gateway to Southeast Asia’s 600m consumers. Shoppers here also tend to be very open to innovation, all of which make this a very attractive market and a huge opportunity for a retailer like Amazon.
“Indeed, there’s a huge opportunity in general for online grocery in Singapore," she continued. "We’re forecasting sales to more than triple to approximately S$0.5bn (US$0.35bn) by 2020. Although online is only a small part of the country’s grocery market today, with a 1.2 per cent share, we estimate that by 2020 online will have a 4 per cent share of Singapore’s grocery market, with a compound annual growth rate of 39 per cent.
“However, Singapore is also an extremely competitive market," Zhu warned. "Rumours have been circulating since the first quarter of 2017 about Amazon’s arrival, and both ecommerce companies and bricks and mortar retailers have upped their game accordingly.
“It remains to be seen how successful Amazon’s launch will be, but one thing’s for sure – in online grocery, Singapore’s shoppers are benefiting from more options, cheaper prices and faster deliveries than they ever have before," she concluded.