Singapore online retail space set for shakeup with potential Amazon entry

November 2nd, 2016 | by Alfred Siew

The online retail space in Singapore looks to be headed for a shakeup, after news emerged today of Amazon’s potential entry and the buyout of e-grocer Redmart by regional e-commerce provider Lazada.

Citing unnamed sources, tech site Techcrunch said today that Amazon was preparing to start an online grocery service and offer its Prime delivery service in Singapore by the first quarter of 2017.

Few details are revealed, though the Today newspaper later reported that the American e-commerce giant has been recruiting staff in Singapore, possibly for its new venture.

The speculation threatened to overshadow something that actually happened today. Lazada, backed by a US$1 billion investment by China’s Alibaba in April, said it had acquired Redmart for an undisclosed sum. The transaction is expected to be completed by the end of this year.

There may be a twist in the tale. Amazon had reportedly made an offer to buy Redmart earlier, according to Techcrunch. Now, the American firm seems to have stolen the spotlight from its smaller rivals, even if it hasn’t announced its intentions.

For consumers here who have been bought from Amazon and shipped stuff from the United States, its arrival would be welcome. At the least, it will offer one more option in the market, where other players such as Honestbee also provide grocery deliveries.

Would the Singapore Amazon store be as well stocked as the US one though? And will viewers here get the Amazon Prime music and video streaming service as well?

All too early to ask, if you ask me, since the deal is not even confirmed right now. However, if a global giant does muscle in, investors for the smaller players may have to dig deep into their pockets to finance a bruising battle to win over consumers.

After all, for many such platform players, the business is a zero-sum game. After burning US$2 billion in China, Uber ceded the market in August to a Chinese company that was itself the merger of two former rivals.

In a race to dominate the market, investors’ cash is used to attract consumers with great offers – at least when there are still several players around. In China, consumers have now complained about higher charges with the market reshaping.

One thing for Amazon to note though, if it indeed is coming to town – this place is no walkover. As many Western companies may find, Southeast Asia can be a surprise. At least in Singapore, Uber is facing a tough fight from the homegrown Grab in taxi hailing services.

The only thing that’s seems certain is that physical retailers will feel the strain. Already squeezed by high rentals and less footfall, the last thing they need is another online rival to draw people away.

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