Digital economy to grow $700m as demand shifts

Online grocery demand outsped supply as buyers spent thrice more time on the Net.

Singapore’s new digital economy will amass nearly $700.80m (USD$500m) in transactions as the pandemic caused a shift in consumer demand to online, a report from Accenture revealed. Some businesses saw up to three times their normal growth in online transaction volumes and revenues.

Consumer confidence has taken a blow as many remain concerned about the economic outlook. Personal investment transactions in Singapore skyrocketed 212%, but revenue per transaction shrank 45%, which indicates consumers are committing smaller amounts.

On the other hand, ecommerce demand has surged, and their frequency of purchase is expected to increase in the future. A shift from offline to online purchase in the beauty and cosmetics industry resulted in a 44% and 13% jump in revenue and transactions, respectively.

“There is a strong likelihood that the shift will persist into phase one of the post-Circuit Breaker period and beyond, as movement restrictions and consumers cautions remain. In the long run, this shift represents significant opportunities, worth at least half a billion dollars per annum (USD) in Singapore’s digital economy,” said Lee Joon Seong, managing director, applied intelligence lead for growth markets at Accenture.

Online grocery transactions and revenue and demand significantly outweighed supply as consumers spent 198% more time online. Meanwhile, revenue for the fashion and apparel industry fell 25%.

Online insurance transactions and revenue have spiked significantly for 4 weeks following DORSCON Orange, with transactions reaching a peak of 196% in the first week of March. Telecommunication transactions grew 29% even as revenues fell, as organisations battled for wallet-share across mobile data, Internet and home entertainment.

Revenues for restaurants, cafés, fast-food delivery climbed more than twice as fast as transactions, with revenue per transaction of around 50% higher as consumers opted for larger purchase baskets.