Trends in E-commerce in the Services Sector

This article presents the trends in electronic commerce (or e-commerce) among firms in Singapore’s services sector over the period of 2016 to 2018.

E-commerce can bring about benefits to firms

E-commerce generally refers to the sale of goods or services through electronic networks such as the internet. This form of transaction has become more prevalent for both the business-to-consumer (B2C) and business-to-business (B2B) segments in recent years. For instance, it has become more common for consumers to purchase clothes online or book a taxi ride through their mobile devices. Firms are also increasingly sourcing for and purchasing inputs through their suppliers’ websites or third-party B2B marketplaces (e.g., Eezee) that connect buyers with suppliers or importers with exporters.

Broadly, firms can derive several benefits from the adoption of e-commerce. First, e-commerce allows firms to transcend geographical barriers to reach a wider market, as customers (including those based overseas) can purchase goods and services without having to be physically present at their stores. Second, e-commerce can reduce the barriers to entry for new firms, as they can save on upfront set-up costs such as rentals. Third, as with other forms of digitalisation, adopting e-commerce can help firms to achieve a leaner workforce as it facilitates the automation of processes such as billing and inventory management, thereby leading to productivity gains for firms. Given the potential benefits of e-commerce, there is a need to better understand the extent of e-commerce adoption by firms in Singapore.

In this article, we examine the trends in e-commerce in the services sector over the period of 2016 to 2018 using e-commerce revenue data from the Annual Survey of Services conducted by the Department of Statistics (DOS).

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