how to start e commerce business in singapore

How to Start an E-Commerce Business in Singapore for Beginners

In the coming years, Asia’s e-commerce industry will most likely grow by USD $2trillion within the next five years from writing, a record-setting growth in retail sales. 

It seems easy to start an e-commerce business from scratch, but it has many defining challenges and learning experiences worth learning to achieve success. Here’s everything to know about starting an e-commerce business in Singapore

E-Commerce: The Modern-Day Shopping Spree From Anywhere

E-commerce websites have a shopping-oriented format that displays all product pictures, prices, and categories for the customer’s convenience. It has a smooth user interface for quickly finding your preferred products and a seamless cashless payment integration system. Lastly, they work with reliable logistics companies to deliver dry goods and pre-packaged items straight to your doorstep.

E-commerce is one of your recommended ways to earn passive income in Singapore. Check out the full article.

Pros and Cons of E-commerce Business

E-commerce is an excellent business venture, but it has its respective pros and cons you must evaluate below.


  • Low Starting Cost: Without property rental, you only need enough capital to purchase your first tranche of goods, earn a profit, and start your business again.
  • Enormous Demographic Reach: E-commerce has seen about 3.3 million Singaporeans shopping online from 2021, earning USD $2.8 million for the industry in that year alone. From those 3 million, you can surely find your dedicated customers.
  • A Shop That Opens 24 Hours a Day: E-commerce websites are open 24/7. Giving your customers lead times assures them that you’ll send the packages before the lead time expires.
  • Outsource-Ready Structure: You can quickly hire virtual assistants locally and abroad working from their own computers to help upload inventory and assess your e-commerce website’s accounting, marketing, and more.
  • Quick Data-Driven Insights: Virtually every e-commerce platform provides a data dashboard featuring all the purchases, profits, visitor numbers, and other business expansion-critical data.


  • Heavy Technology Knowledge and Reliability: Users must have top computer algorithms and web design knowledge to run an e-commerce shop.
  • Saturated Market: E-commerce is quick for anyone to start. However, because of this, many competitors are doing it alongside you.
  • Increasing Consumer Security Concerns: You need many safeguards to assure your customers that their financial information and delicate data are in safe hands.
  • No Defined Shipping Schedule: Some customers may be impatient and dislike an undefined shipping schedule. However, most customers aren’t too exacting because it’s a given aspect of e-commerce marketing.


How to Start E-Commerce Business in Singapore: A Comprehensive Guide

1. Find Something That Sells Fast

Any e-commerce product with high demand gets a dedicated audience. Before planning your business structure, nail down these aspects to give your business a solid competitive foundation.

Top Product Categories

E-commerce sellers often have pre-packaged and commoditized products for sale. For example, pre-packaged food, toothpaste, and iPad cases are commoditized and easy to sell online. Here’s a good list to get you up to speed.

Current Retail Prices

The product you want to sell has varying retail prices due to changes in supply, demand, and competition. Consider the current price from the competition before finalizing your product’s retail price. As a seller, you need to familiarize yourself with manufacturer-suggested retail price (MSRP) and cost-plus-pricing strategy. Here are a few more things you need to consider before finalizing your listing prices.

Potential Product Sales Volumes

You can evaluate the potential product sales you can have by using e-commerce applications, such as Shopee or Lazada, search for the same product, then check the number of sold items. A high number of sold items with multiple sellers indicates high demand and adequate supply for your product. But, keep in mind your pricing strategy when selecting a high-demand and high-supply product to ensure you break even.

Positive-to-Negative Review Ratio

Products with more negative reviews often have general to specific complaints. Negative reviews focused on product functionality or composition indicate poor suppliers. On the other hand, reviews focused on inadequate packaging and delivery performance give your shop an edge if you perform better. Note down these product complaints to aid your selling decision.

In addition, products with fewer reviews and established (or preferred) sellers give you enough room to become an established seller.


Fast-selling products are typically small, non-bulky, and can fit basic delivery packaging requirements. You’ll need to establish your own logistics line for appliances, equipment, and fragile deliveries to ensure high quality. Here’s a good list of high-quality Singapore logistics companies you can use.

2. Finalize Your Business Model

E-commerce companies have multiple business models first-time sellers can use. These online businesses can generate cash flow and unique business plans (for securing future business loan).

Drop shipping

Drop shipping is an inventory-less e-commerce model. The e-commerce brand contacts the manufacturer and sends them the customer’s order for fulfillment and delivery. 

In this business model, the drop shipper is responsible for marketing and advertising the manufacturer’s product. The drop shipper will use the manufacturer’s marketing guidelines, specifications, and other technical details. Lastly, the drop shipper is responsible for creating the entire buying experience, including rewards systems, perks, and other promotional investments.

White Label

This business model focuses on finding one or two original equipment manufacturers (OEM) willing to re-label their successful products, setting up delivery and transportation logistics to the seller, keeping an inventory, and re-labeling products with a catchy brand name. White labeling involves two logistic tiers: manufacturer-to-seller delivery and seller-to-buyer delivery.

In white labeling, sellers can develop the product’s brand identity from scratch. For example, a white-labeling e-commerce business can turn a regular OEM spray bottle into a premium and celebrity-endorsed spray bottle with the right marketing and advertising investments. Given the resources and operations involved, this business model will require sellers to have initially substantial capital.


Traditional manufacturing businesses have high acquisition costs for factories, storage, waste management, and logistics. Today, sellers can create their product ideas by working with OEMs. For example, an OEM can build a shoe brand by referencing a successful brand. Then, the seller can do the same process as white labeling and give the product its own brand identity.

It will take much time to plan and hypothesize your manufacturing plans. Plus, sellers need high capital to handle the initial costs of the operations and resources required for private label manufacturing.


Traditional commerce and e-commerce still use wholesaling because of the affordable en masse buying prices manufacturers can provide. Sellers still need a good space for inventory and a solid logistics plan to handle wholesale transport and seller-to-customer logistics.


Today’s most modern and successful e-commerce format involves being a “Netflix” of excellent niche products. This simple format makes it easy to upsell new products with their separate subscription costs. For example, your customers can pay a lower than usual price to get regular beauty creams every month until they unsubscribe.

Subscription e-commerce models have an easier-to-manage inventory because they can buy wholesale by having a large subscriber population and only a handful when they’re starting out. In addition, they have fixed delivery times for each subscriber, making it easy to plan storage and delivery logistics.

Person adding clothes to cart closeup for online shopping campaign

3. Business Registration and Incorporation

Registering a Singapore business is simple if you follow the basic Singapore government requirements on paperwork and pay all the fees. Today, most business registrations, including e-commerce, only need online registrations. Here’s everything to know to finalize your business registration.

Choosing Your Business Structure

Business structure indicates the amount of personal and brand-related liability you’ll face in running your business. Most e-commerce companies have a private limited company (PLC), a sole proprietorship (SP), and limited liability partnership (LLP) business structures. 

For most Singaporeans, PLCs are excellent business structures because it limits their liabilities depending on their share volume in the company. PLCs for e-commerce businesses also give them access to excellent tax benefits and incentives. You can learn more about PLCs, SPs, and LLPs here.


Be prepared with the following items during your business registration with the Accounting and Corporate Regulatory Authority (ACRA)

  • Company Name: Choose a unique and viable name that reflects your products and values. Here’s a great guide to help you choose the best e-commerce business name.
  • Bring your original personal ID and contact details. Ensure the IDs of all other directors, shareholders, and other officers in your team.
  • Foreigners in Singapore can present their personal proof of address. Local utility bills, credit card paper charges, and other listed documents will do.
  • Company Responsibilities: Write your business structure (see section above) and pay S $1 or more for your business capital. Keep in mind that a higher paid-up capital makes it easy to gain the trust of customers and investors.
  • Registered Local Address: Bring your lease or purchase document indicating your business’s address.

Other Things to Know

You’ll need a few more things to register your business.

  • You’ll need one local director who is either a Singaporean or PR. Nominee directors are your best alternative.
  • E-commerce businesses need a certified company secretary. Luckily, you can outsource your company secretary and HR needs in Singapore.
  • Foreigners can’t apply for registration and must outsource this process to a certified foreigner-owned company incorporation agency.

4. Setting Up Your Digital Shop

Your e-commerce website is your virtual store. It has to rank highly according to your target market search inquiries, have an excellent user interface, provide a great overall technical experience, and host all the product images, descriptions, purchases, and other aspects involving your business. 

Here are a few starting steps to set up your digital shop.

Website Set-Up and Hosting

Your domain name must represent your company identity and be quick to memorize. You can find numerous domain hosting services with seamless integration with e-commerce website builders and high-quality website security and bandwidth to host all your products. In addition, these domain hosting services have helpful domain name suggestions in case a website is already using your ideal name.

Your domain name must use the (dot) com extension because you’re engaging in commerce, buying, selling, and advertising. Additionally, consider it brandable, non-generic, and easy to pronounce. Here are a few more things that can help you make an excellent e-commerce domain name that target customers would easily identify.

Web Design

Web design requires creativity, technical seamlessness, and excellent user interface and technical experience. Many of Google’s SEO requirements point to fast website loading speed, a simple design approach with fewer clicks, and a palatable but brand-relevant color scheme. You can outsource this part to web design specialists to get a smooth design that contains the following essential e-commerce website features:

  • Use a Tried-and-Proven Backend Framework: Shopify, Magento, and Oberlo have a proven track record for stable e-commerce content management systems and available social and technical plugins. We highly recommend asking an e-commerce web design specialist to know the best content management system and scaling backend framework for your e-commerce business’ products, inventory figures, and payment gateways.
  • Mobile-Friendliness: Google penalizes non-mobile-friendly websites with poor rankings. Other search engines may have adopted the same guidelines, so opt for a mobile-friendly website.
  • Good Product Page Design: Your bread and butter must have easily-readable description text and blogs. It must have a thumbnail and picture zoom-in option. Lastly, your photos must look professional.

Payment Gateways

A payment gateway is a bridge between your e-commerce website and the world’s biggest and most convenient modes of payment. You can assume most e-commerce customers want to use their credit or debit cards and other digital wallets. Some of the best today include the following payment gateways compatible with most websites and packaged with your hosting service.

  • PayPal
  • Skrill
  • Stripe
  • Braintree
  • PayU

5. Marketing and Advertising

Digital and traditional marketing and advertising still use the same rules but have different technical implementations. E-commerce website marketing and advertising does not use print advertising and television advertisements. Instead, it uses the following.

PPC Advertising

Pay-per-click (PPC) advertising allows small to enterprise-level businesses to entice visits from customers by being the first search engine result or social media presence. Most PPC uses a bidding system. It gives the top search engine result position to the highest bidder for a particular search phrase, then charges their bid amount according to the number of clicks or impressions it gets.

Search Engine Optimization

Search engine optimization or SEO is a tried-and-proven practice involving excellent web design user interface, content optimization through keywords, number of external website backlinks to assess the e-commerce website’s reputation, and more. The Google SEO requirements mentioned earlier are one example among other search engines available today.

Content Marketing

E-commerce websites can have their respective blogs that provide buying tips to customers. In addition, their product descriptions must provide an excellent product overview, be completely original, and cross-reference (or cross-sell) other products.

Influencer Marketing

E-commerce websites can have celebrities, local community leaders, and other influencers review their business services or advertise their services on their respective websites and portals. They can send a demo product or ask influencers to share their smooth buying and delivery experience.

Social Media Marketing

Many people today use social media marketing for news, content, and entertainment. Advertising your e-commerce service on social media can help your e-commerce website gain traction.

Email Catalogs

Newsletters must contain your handpicked choices per category. For example, you can send a summer-ready item list available from your e-commerce site to your subscribers, vouchers for your promotional discounts, and more.

Woman working at parcel service

6. Accounting

All Singapore digital and traditional businesses must have properly tracked and accounted-for bookkeeping. Government regulations require all incorporated companies to track every purchase and inventory movement to determine their financial position, operating cash flow, and have an accurate balance sheet for future financing or regulatory investigations.

Businesses can use accounting and inventory management software that integrates into their point-of-sale devices for quick and easy accounting. Using advanced accounting software, such as Xero, makes it easy to attach sales invoices, track expenses from documentation, and create dashboards for an easy overview of your current financial state.

Accounting is essential for the next and final item on this list.

7. Tax Compliance

The Inland Revenue Authority of Singapore (IRAS) and ACRA require tax compliance for e-commerce businesses and other traditional ventures. All active and dormant companies must file their yearly taxes to avoid fines, penalties, and possible company director debarment.

Goods and Services Tax (GST) is one example of tax compliance. GST is split between non-dutiable and dutiable goods. All non-dutiable goods are calculated by 7% multiplied by the custom’s value or last selling price. Dutiable goods include a “duties payable” additional payment.


With these tips, you can be one of the many successful e-commerce businesses within the next five years. Get started today and find a suitable niche with satisfied and returning loyal customers. 

Key Takeaways

  • Asia-Pacific’s e-commerce industry is slated to grow up to USD $2trillion in five years.
  • E-commerce has many convenient features, but it is greatly digitally dependent.
  • You need to register your business, determine your e-commerce business model, set up your shop domain, choose the right payment gateways, accounting, tax compliance, and do the best marketing and advertising.

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