by Ted Chong, co-founder of Ice Cube Marketing
Historically, we advised local businesses to avoid engaging in e-commerce directly. Instead, we recommended listing their products on major platforms like Lazada, Shopee, or Qoo10. These platforms offer an extensive range of products, making it challenging for individual businesses to compete. Many items on these sites are sold at a loss, with the platforms subsidizing prices to attract consumers. They recoup these losses over time as customers return to purchase other items.
These large platforms have significant funding, allowing them to sustain losses on certain products for extended periods. However, we’ve recently observed a shift, with many of our clients beginning to find success in e-commerce. While they may not be seeing returns of 10x or 20x, they are achieving a positive return on investment (ROI). This positive ROI justifies continued investment, as they are able to cover advertising costs and acquire new users at no net cost.
Traits of Successful E-commerce Businesses in Singapore
Among the local businesses that thrive in e-commerce, several common characteristics stand out:
1. Promote Your Own Brand.
Instead of selling well-known products from brands like HP or Philips, focus on selling your own branded products. Popular brand items are easy for consumers to price-compare, leading them to purchase from the cheapest retailer. However, with your own brand, the competition shifts from price to perceived value. If you can effectively communicate the value of your product, customers are more likely to purchase from you, even if your prices aren’t the lowest.
2. Target Impulse Buyers with Affordable Prices.
Aim to price your products within a range that encourages impulse purchases, typically under $100. This pricing strategy is particularly effective on platforms like Facebook, where users are often browsing casually and open to spontaneous buying decisions. High-ticket items require more consideration and can lead to delayed purchases or lost interest. On social media, where users are more likely to be engaging in recreational browsing, a well-priced, attractive product can lead to quick sales without extensive price comparisons.
3. E-commerce isn’t confined to physical products.
Service-oriented businesses in Singapore can also carve out their niche in the e-commerce sector. That’s correct; you can offer services and accept payments online. This is known as O2O, or online to offline. For example, you can sell a trial session for $50 online or offer your full package with an upfront deposit payment. There are numerous advantages to this approach, the most significant being that it increases the likelihood of clients showing up for their appointments since they have already made a payment. This provides higher chance of success as compared to traditional forms of lead generation whereby no payment is collected. Additionally, this method reduces administrative work by automating payment processes. Furthermore, the revenue generated online can help offset some of your advertising expenses, making your marketing efforts more cost-effective.
E-commerce is rapidly gaining traction, especially with the increase in remote work. Consumers are becoming increasingly comfortable with conducting transactions online. Regardless of whether your business is service-oriented, product-focused, or event-driven, there are opportunities to engage in e-commerce. Ensure that you capitalize on this growing trend and don’t get left behind!
Ted Chong is the co-founder of Ice Cube Marketing, a Google Premier Partner digital marketing agency in Singapore that has been operating since 2015 and has helped more than 500 SMEs grow their business through Facebook and Google ads.
