Level playing field key to e-commerce success: CCS
TODAY file photo
SINGAPORE — The Competition Commission of Singapore (CCS) today (Dec 2) said that a dynamic competition policy and a robust law regime ensuring a level playing field is absolutely essential as companies in the Republic embark on their e-commerce journey at home and beyond.
To keep at bay anti-competitive practices that could potentially stifle growth of companies’ e-commerce expansion plans, CCS said it continues to closely monitor market developments given that the rise of e-commerce has generated tremendous opportunities and challenges for businesses.
“At the same time, businesses that have successfully innovated should be entitled to reap the rewards in such markets. We also hope that the idea of a level e-commerce playing field can move across national boundaries and be extended to the ASEAN Economic Community and the vision of a single market integration,” said Mr Toh Han Li, Chief Executive of the CCS at an e-commerce seminar today.
Organised by CCS and supported by IE Singapore and SPRING Singapore, the seminar was attended by more than 150 participants from a wide range of businesses in both the public and private sector.
At the seminar, CCS shared some of the findings from a study it commissioned consultancy firm DotEcon to perform earlier this year. Among some of the competition issues it found was that as online platforms grow, their large user base may make it difficult for rival platforms to compete effectively.
Further, threatened by e-commerce activities, some traditional businesses could engage in anti-competitive behaviour to protect themselves. Customer data could also become an important source of market power for established players creating entry and expansion barrier for new entrants.
Taking the example of Easy Taxi, a third-party app which wound up operations in Singapore citing “highly funded competition and market dynamics”, Mr Toh said CCS is taking note of such instances.
“We will also learn from the experience of other countries in how they deal with the opportunities and challenges presented by e-commerce, including how competition authorities have dealt with such cases,” he added.
Singapore’s online retail market, the study noted, is expected to reach S$4.4 billion in 2015, four times that in 2010. However, there is still room for more growth as only 4 per cent of household expenditure is spent online while online sales account for just 4 to 5 per cent of total retail receipts in the Republic.
Comparatively, in more mature e-commerce markets such as China, the United Kingdom and the United States, online sales account for 10 per cent, 13 per cent and 6.5 per cent of total retail sales, respectively.
CCS said it commissioned the DotEcon study to better understand the development and characteristics of e-commerce, the specific competition issues that e-commerce activities can give rise to, as well as the implications for competition policy and law in Singapore. It also highlights the drivers and barriers for e-commerce activities in Singapore.
This year, Mr Toh said, CCS will be embarking on a new joint study with the Infocomm Development Authority of Singapore (IDA) to further examine the impact of e-commerce on the postal and logistics market in Singapore.
Online business-to-consumer marketplaces, Mr Toh noted, have made it easier for small businesses to sell their products online, enabling these companies to gain access to a wide pool of customers in different locations. For instance, he added, more than 30 Singapore businesses across the food and beverage, retail and consumer electronics sector are in talks to list their products on US ecommerce giant Amazon. In addition, six Singapore SMEs are listed on Malaysian platform Lelong, with 15 more SMEs in the pipeline.
Overcoming traditional limitations in Singapore, such as rental cost, manpower shortages, and small market size, e-commerce facilitates the entry and expansion of businesses into markets at home and overseas. At the same time, CCS said, e-commerce brings about challenges, particularly to incumbent businesses, as they have to transform their business models to respond to keener competition.
