Amazon – the largest online retailing site in the world – is continuing to push into Southeast Asia with a new venture into Singapore but the e-commerce is facing some problems there as well. For people, shopping in air-conditioned malls of Singapore is arguably similar to a national sport and several new online retailing companies like Alibaba are pushing into the market as well.

Retailers blaming increased web shopping for slow growth

When the on-the-ground operations started in July with Prime, the delays in delivery by the online retailing giant effected its reputation as well. The e-commerce company is behind local web store Lazada even when orders are placed on its main US website. The parent of Lazada, Alibaba Group, is also faster than the e-commerce company when it comes to placing orders.

In addition to this, the China-based e-commerce company is giving the U.S.-based online retailer tough competition in Singapore. A shopping center or a store is just a few minutes away for the people living in the island country. There are just so many stores in the country that the mall operators are now scaling back their operations.

When it comes to online retailing, Singapore is trailing most of the developed world but still the retailers, who are not making enough profit, blame increased web shopping and weaker economy for the loss or slow growth. According to Euromonitor International, only 4.6% of retail sales took place in Singapore last year, which is quite low in comparison to the 15% that took place in the UK and the 10% that took place in the US.

Amazon sees biggest launch in Singapore

Chan Hock Fai, a fund manager at Amundi Asset Management, said “Singapore is a very small city-state, so shopping is one of the favorite pastimes for all Singaporeans.” He said that growth rates are more difficult to come by because retailing is a more mature market in the country in comparison to emerging e-commerce markets and retail markets.

According to a report by Temasek Holdings Pte. and Google, the Southeast Asian e-commerce market, which is projected to reach over $88 billion by 2025, is at stake here. The online retailing giant is already losing its market to JD.com Inc. and Alibaba in China but it is quite firmly established in Japan. For the e-commerce company, India stays the top priority, where the CEO Jeff Bezos has committed to invest $5 billion to expand its market and overthrow local competitor Flipkart.

Amanda Ip, a spokeswoman at Amazon Prime Now, said that they have launched Prime Now in 50 cities across nine countries and Singapore is their biggest launch ever. She said, “We are grateful for the exciting response from customers.”

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