The e-commerce industry has been steadily growing in the past few years. Google and Temasek Holdings report that the market size for Singapore’s e-commerce industry will grow to US$5.4 billion by 2025.
Today, many brick-and-mortar retailers are supplementing their physical sales through online distribution platforms. If you are looking to get a foot into the world of e-commerce, then read on to see just how you can go about it.
1. Plan It Out
Your business plan will be the blueprint of how your business will operate and develop. You need to write a plan that helps remind you of your vision and objectives as you get further down the line.
Your initial plan can be both exciting and daunting at the same time. With so many things going on, it is easy to feel overwhelmed by all the options available to you. So before that happens, try making a checklist of some basic things:
- Executive summary: an overview of the entire plan.
- Company descriptive: explanation of your identity and operating procedures as a business.
- Products/Services: an overview of your sales values and customer niche.
- Market analysis: a description of your target customers, competitors and industry.
- Company strategy: an outline of your sales, marketing operations, strategies and plans.
- Organisation and management: a summary of your company’s organisational design
- Financial projection and plans: an analysis of your profits and costs
2. Learn About The Laws and Regulations [restrict]
Internet content in Singapore is classified as broadcast media content, therefore subject to the regulations of the Singapore Broadcasting Authority (SBA).
Under the Singapore Broadcasting Authority (SBA) act, all broadcasting services, including computer online services provided by Internet Service Providers (ISPs) and Internet Content Providers (ICPs) must be licensed. Certain persons are automatically licensed. This includes e-commerce website owners.
Furthermore, all e-commerce companies are required to abide by the Internet Code of Practice. Depending on the products you intend to sell, there are some regulations that must be followed:
- Online gambling service providers are regulated by the Betting Act (2011) and the Common Gaming Houses Act (1985)
- Online financial service providers are subject to Singapore’s Companies Act (1967) and its provision on financial services
- E-commerce companies selling second-hand goods are subject to the Second Hand Dealers Act (2007). A license must be obtained from the Deputy Commissioner of Police
- Promotional activities on the internet are subject to the Common Gaming House Act (1985) and the Public Entertainment Act (2001)
- Online advertising is regulated by the Singapore Code of Advertising Practice, the Computer Misuse Act (2007) and Consumer Protection Act (2009) .
3. Register Your Business
Registering your business in Singapore is a rather straightforward process. As long as all the requirements are met, the Singapore Trade Register has no reason to deny your registration.
To incorporate your company in Singapore, you need to provide the following documents:
- Company name
- Brief description of business activities
- Shareholders’ particulars
- Directors’ particulars
- Registered address
- Company secretary particulars
Before registering your business, you should be aware of the following requirements:
- Your company name should be approved before incorporation
- You are required to appoint at least one resident director who is at least 18 years old, not bankrupt, and free of any malpractice charges.
- You can have between 1-50 shareholders. These can be both local and non-local individuals or companies. After incorporation, shares can be freely issued or transferred at any time.
- You are required to appoint a qualified resident company secretary within 6 months of your company’s incorporation. Sole directors and/or shareholders are not allowed to act as a company secretary.
- You need a minimum of S$1 worth of paid-up capital to register a company in Singapore. This amount can be increased at any time after incorporation.
- You are required to provide a physical registered address that is local and within Singapore. P.O. Boxes do not constitute as a physical address.
4. Setting Up Business Infrastructure
After the basic steps have been acknowledged, you will want to think about your business’ infrastructure. This includes anything required to make sales and deliveries of your business, both online and offline.
There is no set way of going about this process, as you will want to choose an infrastructure that meets your business strategies. This will be best handled by you, but here are some things to take note of:
Website Development & Design
This includes registering a domain name, finding a hosting service provider for your website and designing the look and feel. There are many online retailers who opt for E-commerce platforms like Lazada, Carousell and Ebay. This eliminates the costs of creating their own website,but requires them to follow the platforms’ rules and regulations.
You will need to get your website seen to drive traffic, especially in the early stages. Business owners tend to utilise online advertising for this matter. Online advertising is the one of the fastest and cost-effective ways to market your website and acquire new customers.
A popular long-term approach to marketing is to create valuable content that customers can engage with. This will give your website credibility and visibility over time.
Operations & Customer Support
No matter the nature of your business, you will want your customers to be able to reach you should they have troubles with your products and services.
The more you are able to help them, the better your customers will rate you. You may only need a simple set-up such as a customer-support e-mail, but you will want to monitor it diligently.
Managing Your Finances
Managing your finances is an important part of any business. For an e-commerce business, most of your transactions will be handled through an online payment gateway. There are two options here: (a) Hosted Payment Gateway or (b) Integrated Payment Gateway.
- Hosted Payment Gateway
This option poses an advantage because it is easy to set up and the payment gateway will be handle compliance methods and data security.
The downside to this is that customers will be redirected to the payment gateways’ website. Customers who are unfamiliar with the site may use this as a reason to cancel a transaction.
- Integrated Payment Gateways
Integrated payment gateways connect your e-commerce site via the payment gateway’s application programming interface (API). An API essentially allows a piece of software to interact and connect with another piece of software. This benefits customers, as they do no have to leave your website to complete a transaction.
However, you are liable for the integration process and in managing security compliance. You are also required to open a merchant account to receive your debit and credit card payments.
Both options have their set of advantages and disadvantages.
If you are new to e-commerce, then using a Hosted Payment Gateway initially will help you to get a hold of how the transaction process works.
To summarise it all, E-commerce presents an enormous opportunity for small business owners to get into. Initially, there are many things to consider and it will require a substantial investment of your time, energy, skills and money.
All this, combined with the legal framework you must abide by, will surely make it a challenge. This is no small enterprise, so you will be required to plan and prepare in order to succeed.
Although it may seem tough, there are many e-commerce businesses out there that will provide you with examples to follow-through on.
Try visiting e-commerce platforms like Lazada, Shopee or Carousell to see how retailers go about selling their products. It is daunting, but with enough patience, skill, and dedication, the fruits of your labour are bound to pay off.