Rising business costs, labour crunch and stiff competition from larger competitors are forcing Small and Medium Enterprises (SMEs) in Singapore to find new markets and win new customers, and online exports could be an answer to that.
According to Paypal, it processed US$145 billion of total payment volume in 2012 - a 22 percent increase from the previous year - and cross-border trade accounted for a quarter of this figure.
Faraz Ahmed, general manager of Paypal Southeast Asia and India, said in a media briefing yesterday that online merchants in Singapore saw robust growth in their exports to Asia Pacific markets in 2012.
This could be attributed to SMEs offering products and services that appeal to the international audience at competitive prices, and offering the convenience of secure payment transactions via the PayPal online payment channel.
Ahmed added that the demand for Singapore-made goods was the highest in China, followed by Hong Kong; local merchants increased their online export sales by 68 percent to China and 55 percent to Hong Kong.
Figures of online export sales to other Asia Pacific markets were encouraging too: exports to Japan and Australia increased by 22 percent and 20 percent respectively. These are based on PayPal's own findings.
According to Ahmed, the top export categories from Singapore businesses offering online payment methods include travel, computers and accessories, electronics, entertainment and media, vehicular accessories, and toys and hobbies.
One successful local business that has taken advantage of PayPal's solution is Manek-Manek Beads, founded by Helena Tang-Lim. It sells handmade bead jewellery designs.
According to Mrs Tang-Lim, she decided to embark on e-commerce last year to enable her business to reach potential customers overseas. The move proved fortuitous, as today, 90 percent of sales originate from outside Singapore.
Ahmed attributed the success of local online businesses to the fact that they have taken advantage of the simple and secured payment and collection methods offered by PayPal.
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