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How To Start an E-Commerce Business Singapore for Beginners

how to start e commerce business in singapore
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The COVID-19 pandemic has reshaped consumer behavior worldwide. More and more people are shopping online and as such, Southeast Asia’s digital economy saw significant growth. In fact, Singapore’s e-commerce market is projected to grow at a rate of 16.2% to US$10.7 billion by 2025.

Some of the top e-commerce businesses in Singapore today include Lazada with a monthly traffic of 8 million, Qoo10 Singapore, Zalora, Carousell Singapore, and more. With Singapore aiming to be the leading e-commerce hub in Asia, more and more businesses are encouraged to take advantage of the ever-changing digital landscape. Find out more on the business opportunities in Singapore.

Don’t want to miss out on this opportunity? Now is the time to start an e-commerce business in Singapore. In this beginner’s guide, we’ve listed the steps of starting an e-commerce business. Plus, we’ll list the necessary documents, how to secure funding, the estimated costs, and more.

Benefits and Risks of Starting an E-Commerce

Not sure if starting an online store is right for you? Just like any business venture, starting an e-commerce business will have its perks as well as risks. It’s good to understand what you’re getting into to make strategic decisions.


  • Low Cost: The cost of creating an online store is cheaper than paying rent for a physical store. You also don’t have to worry about expenses for store signs, store design, and more. In fact, you can take advantage of e-commerce platforms, such as Shopee or Lazada, so you don’t have to worry about investing in a website. Learn more on how to sell on Shopee.
  • Easy to Do Business in Singapore: It’s easy to do business in the country. Singapore provides business owners access to much-needed capital at low interest rates. Additionally, you can also apply for tax incentives but you’ll need to fulfill certain requirements. Best of all, you can have your business registered within days.
  • 24/7 Potential Income: Online stores are always open for business so you can cater to those with odd work schedules. For instance, you can attract potential customers who are browsing late at night. Plus, you don’t need someone to monitor your store 24/7 for a sale to happen.
  • Access to a Larger Market: With an e-commerce store, you can reach customers all over the country and around the world. In fact, if you choose the right e-commerce platform, you can also sell internationally. However, you need to take into account the shipping costs and logistics.
  • More Opportunities to Sell: E-commerce websites allow you to provide detailed information about the products you sell. For instance, you can add demo videos, reviews, customer testimonials, and more. These will help increase the version in the long run.


  • Possible Website Downtime: One of the biggest risks of starting an e-commerce store is the possibility of a website crash. That said, it’s best to choose the right platform.
  • Lack of Personal Touch: Some consumers value face-to-face interaction and the personal touch they get from visiting a physical store.
  • Customers Have To Rely On Photos: Customers can’t personally scrutinize the products you’re selling. For this reason, you need to provide high-quality photos of your products. More importantly, provide detailed product descriptions, such as adding color, size, and other specifications.
  • Ecommerce Is Highly Competitive: In Lazada alone, there are more than 400,000 sellers and 3,000 brands. Battling for customers is one of the biggest risks of e-commerce. You need to find ways to stand out from the competition and come up with a good marketing strategy.
  • IT Security Issues: Unlike a physical store where you can hire a security guard, an e-commerce site requires different security measures. Don’t fall prey to malicious hackers who will steal customer information from your database. Invest in good IT security.

How To Set Up Your E-Commerce Business in Singapore

Step 1: Research and Plan

Before you start choosing the best e-commerce platform or hosting services, you first need to conduct market research. Doing so will help you determine whether your business idea is feasible. Doing thorough research will help you:

  • Understand your target market
  • Learn more about the current trends and demands
  • Find out about your competition and what they’re doing right
  • Learn whether there is demand for your target niche

Here are a few questions you need to consider during your research and planning stage:

  • What product or service are you planning to sell?
  • Who will be buying your products?
  • Which online platform can you find your target market? Are they mostly on Instagram, Shopify, Lazada, or other e-commerce platforms?
  • Where and how will you obtain your products?
  • How will you fund your business? Do you have a plan B?
  • Who are your competitors? What sets your business apart? Why should the market choose you?

Once your business idea is fully fleshed out and you are done with the market research, it’s time to create a business plan. This document will detail your business’ goals and strategies.

Step 2: Secure Funds or Look for Financial Assistance

Now that your goals and plans are properly laid out, the next step is to figure out how to finance your new business venture. You need enough capital to start your business. If you have enough extra cash to get started and sustain your business for the next six months, then you’re lucky!

But what if you don’t have the funds to finance your business?

Thankfully, the Singapore Government has several financial assistance that helps entrepreneurs jumpstart their e-commerce business. Some of these options include financial programs, tax incentives, cash grants, venture capital, and more.

Here are a few options to consider if you’re seeking funding support:

  • Business Loans: The most common way to secure funding is to take out a loan from banks or other financial institutions. You can compare different business loan packages to find the lowest rates with the best terms. There are Singaporean banks that offer loan packages specifically for start-ups, such as OCBC’s Business First Loan.
  • Investors: Another option is to look for investors. Unlike bank loans, this type of funding doesn’t require repayment of the principal amount. Investors will provide you with the capital you need and in exchange, the investors can claim a part or share of your business.
  • Government Funding: You can also seek financial assistance from the government. Thankfully, the Singapore Government has founded several initiatives that will provide new entrepreneurs the funds they need. You can look into:
    • Startup SG Tech
    • Enterprise Development Grant
    • Startup SG Equity Program
    • Market Readiness Assistance Grant

Step 3: Choose Your Business Structure and Model

Entrepreneurs have the option of choosing between three common business structures in Singapore – Sole Proprietorship, LLP, and Pte Ltd.

Sole Proprietorship

This is a company with a single owner who has complete control over the entire business. This is best for entrepreneurs with low-risk tolerance and who have limited capital. Keep in mind that only Singaporeans can apply for a sole proprietorship

Limited Liability Partnership (LLP) 

This second type of business structure involves a partnership. Each owner’s liability is limited to how much they invested in the company. Consider this if you prefer lower set-up costs and protection against liability. Again, LLP is available for Singapore residents only.

Here are a few things you need to know:

  • Owners are required to pay tax at the individual level
  • Owners also need to pay personal income tax – higher than corporate tax

Private Limited Company (Pte Ltd)

Most privately incorporated businesses in Singapore are registered as Private Limited Companies.  The shares are held by less than 50 persons and are not available to the general public. This business structure limits your liability to the amount you have invested in its shares. Plus, it also offers attractive tax incentives.

If you’re starting an ecommerce business, setting up a private limited company is a great choice. Here are some reasons why:

  • Separate legal entity
  • Limited liability
  • Perpetual succession and ease of transfer of shares
  • Ease of raising capital
  • Tax benefits and incentives

Remember, the type of business structure you choose will determine your exposure to liability, your taxes, and your ability to raise capital and run the business.

Now that you have an idea of the most common business structures in Singapore, what about your business model?

When you run an e-commerce business, you can consider these three models:

  • Dropshipping: With this business model, you will be finding a buyer and then selling a product from a manufacturer / supplier. You can focus on marketing, storefront, and customer service. However, adopting this structure opens you up to a lot of competition.
  • White Label: Another option is to create a new brand and sell sourced products under it. For instance, you can sell candles, face masks, and soaps by different manufacturers but branded under your name. To succeed, you’ll need to promote and market your brand.
  • Manufacturing: This is a trnaditional business model wherein you are involved in the entire business cycle – from production to end purchase. This encompasses a simple e-commerce business and so it requires a lot of effort and more risks. Why? Because you’ll be producing items in bulk and you’ll have to consider storage on top of marketing and selling.

Step 4: Incorporate Your Business

Before you start selling online, you must register your business. Thankfully, the process is quick and easy and can be completed within a day. To run an online business, it’s best to register a private limited company or LLC.

Government Requirements

  • At least one director. He or she must be at least 18 years old, a Singapore citizen, or a permanent resident.
  • A company secretary. A secretary reports to the government on your behalf. It’s best to hire an agency or a certified officer for this job.
  • A registered Singapore address even if you don’t have a physical store. You can register your home address.


  • Company name. Your company name must be available during the company name check. Using certain words, such as “bank” or “education” may lead to a longer registration process.
  • Proof of identity and contact details. You’ll need to present your IDs, as well as that of other directors, shareholders, and corporate secretaries.
  • Company constitution. If your company constitution is that of a private limited company, then specify your share structure and paid-up capital.
    • Paid-up capital of not less than S$1. You can increase the share capital at any time after incorporation.
  • Registered local address.

If you’re a foreigner, you need to present proof of address for yourself, directors, and shareholders. You can use utility bills or bank statements.

Application Process:

Once you have all the documents ready, the next step is to submit your application to the Accounting and Corporate Regulatory Authority. ACRA manages company registration in Singapore. Here are a few things you’ll need to provide:

  • All the documents listed above
  • Government fee of S$315
  •  Application

The application process usually takes a few hours. So the whole incorporation process will depend on how much time you’ll need to collect all the documents.

SingPass ID is required to log into the BizFile+ portal. Foreigners without SingPass are unable to incorporate a company by themselves. That said, they need a professional corporate services provider to do it for them.

In fact, Singaporeans with SingPass ID who are incorporating online businesses for the first time may find it useful to outsource corporate secretarial services for a smooth and easy process.

Online shopping & business icon on retro computer keyboard

How Much Does It Cost To Incorporate a Company?

For company incorporation, ACRA charges a S$15 fee for name application and another S$300 registration fee. The total administrative fees amount to S$315.

If you’re thinking of hiring a professional corporate services provider, they have packages that cost between S$500 and S$1,500, depending on the scope of services you need.

For instance, foreigners may pay around S$2,550 for the following:

  •  Nominee director
  • Corporate Secretary
  • Registered Address
  • All paperwork and government fees

Step 5: Setting Up an Online Store and Marketing Your Business

Finally, it’s time to set up your online store. But first, you need to choose which e-commerce marketplace to set up shop. The most popular e-commerce platforms in Singapore include:

  • Amazon: E-commerce businesses that require a lot of storage can benefit from selling on Amazon. This e-commerce marketplace is also great for international shipment and is the only platform where you can sell as an individual person and not an LLC.
  • Lazada: Lazada is one of the most popular locally developed e-commerce platforms. One of the most visited online marketplace in Singapore, it is a great place to reach your target customers.
  • Shopee: This is another locally developed e-commerce platform that grew in popularity even outside Singapore. Setting up a shop in Shopee is quick and easy.
  • Qoo10: Setting up an online store in Qoo10 can be expensive. You may need to pay a 7% to 10% fee for every transaction.

If you want an e-commerce marketplace with strong marketing and SEO strategy, you can consider these platforms:

  • Shopify: A popular choice because it’s so easy to set up. However, you may need to pay around S$9 to S$299 a month, depending on the features you need.
  • Magento: This is a free platform, but you’ll need to know how to code or outsource coding services.
  • Prestashop: Another free open source solution and more user-friendly than Magento. Plus, you don’t need a lot of technical knowledge to use it. The downside? The product library is limited.

Once you’ve set up your online business, you must then start your marketing efforts to reach your target customers. 

Create a Brand Personality

You need to create a brand persona for your online shop. Doing so will make your online business more memorable. For instance, you must consider how you want your business to be perceived. Do you want to be a friendly brand? A sophisticated one? Or do you want to present your brand as witty and funny?

Come Up With a Unique Logo

Your logo must fit your brand persona. It could be as simple as your brand name or a symbol that represents your company. However, creating a unique logo is not as easy as it seems. It must be memorable and befitting your brand. That said, make sure to let your designer know how you want to present your business to your target customers.

Boost Your Organic Online and Social Media Presence

To reach a wider audience, you also need to put in time and effort to boost your online presence. This means increasing your digital engagement. For one, you must regularly update your social channels by posting vibrant and engaging photos and videos. You can also consider hosting giveaways or partnering with influencers who are in your niche.

Optimize Your Website For SEO

Search Engine Optimisation (SEO) will help your website rank higher in search engines. However, optimizing your shop is not limited to a website. You can also optimize your shop on e-commerce platforms so when a customer searches for a product, your shop will easily come up.

Here are a few things to consider:

  • Brand Name + Product Model + Specifications + Size + Additional SEO keywords
  • Gender + Specifications + Product + Additional SEO keywords
  •  Specification + Product + SEO keywords

Best of all, you need to provide a detailed product description. Doing so will also help your customers know exactly what they are getting and if it is right for them. 

Step 6: Plan Your Product/Service Fulfillment

What happens when a customer successfully places an order? How will you send the products to your customers.

Aside from setting up shop and marketing your products, you also need to consider shipping and fulfillment. 

There are three ways:

  • You can partner with a dropshipper who will fulfill the orders for you.
  •  You will fulfill the orders on your own – either independently or with a team.
  • You can partner with a third-party logistics company that will handle your warehousing and fulfillment.

Step 7: Accounting and Bookkeeping

Another important step when starting an ecommerce business is setting up an accounting system. You need to find a way to easily keep track of all your business transactions. One option is to outsource bookkeeping and accounting to an agency.

Why is this important? Aside from keeping track of your cash flow, it is also necessary when securing future business loans and investments. Plus, it also helps your business comply with the government’s tax and accounting policies to avoid potential fines.

Remember, all tax filings are compulsory. Additionally, Singaporean incorporated companies must follow the reporting standards set by the Inland Revenue Authority Singapore (IRAS) and the Company Regulator ACRA.

Note: Reporting deadlines are triggered by your company’s End of Financial Year. You choose your financial year-end yourself. It is advisable to pick the end of a month and a quarter.

young man looking for shoes online

Ready To Launch Your Online Store?

Starting an ecommerce business is as exciting as it is challenging. From business conception to planning, to registering your business, it requires proper thought and planning. Aside from that, the success of your online store also rests on your digital marketing efforts and driving targeted traffic to your website.

Key takeaways 

  • Before you start selling online, you must first determine what you’d like to sell, where to source the products, and register your business.
  • Choose an ecommerce platform or create your business website. Some of the most popular ecommerce marketplaces are Lazada, Shopify, and Amazon.
  • The Singapore Government has several financial assistance that help entrepreneurs jumpstart their e-commerce business, such as bank loans, cash grants, tax incentives, and more.

Are you in need of financing but don’t know which loan package is best for you? Loan Advisor takes the hassle out of comparing loan packages. They have the latest information about the top licensed moneylenders in Singapore. Request up to three loan quotes today to find the best interest rates, tenure, and loan terms.

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