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4 Singapore Government Approved Subsidies to Build Your E-commerce Store

shop with closed sign

The current COVID-19 pandemic has affected many businesses. With the enforcement of the circuit breaker rule in Singapore, merchants especially are severely impacted by having to close their premises temporarily, restricting their services to delivery only and restructuring their workflow around smaller manpower.

For merchants that do not already have digital processes in place, being forced to go online and acquiring the technical resources to do so may seem overwhelming.

There are many platforms to set up shop online from e-commerce marketplaces to building your own website. They both have their pros and cons which we will cover more later.

Fortunately as an added incentive to go digital, currently there are a couple of subsidies merchants can apply for to aid in this transition. The subsidies are not specific to e-commerce only as they also offer other packaged digital solutions like online collaboration tools, customer management systems, and many others.

In this article however we are going to cover the benefits of the respective four subsidies specific to merchants interested in setting up their online shop.

1. Productivity Solution Grant (PSG)

Under this scheme by Enterprise Singapore, merchants can get funding for a wide range of pre-scoped list of IT solutions and equipment to enhance their business processes. There is also a category on e-commerce solutions for merchants interested in setting up their online shop.

PSG solutions are generally more robust and customizable for SMEs, and may not be just off-the-shelf. The solutions usually range from $5,000 – $20,000 and will last you for a few years as your primary productivity tool.

Boutique web design service providers like eFusion Technology offers a tailored approach for merchants that want to build their own e-commerce website that is easily customizable through strategic planning, flexible features, search engine optimization, and training support.

From 1 April 2020 to 31 December 2020, merchants can get up to 80% funding under this grant.

Eligibility

  • Business is registered and operating in Singapore
  • Purchase/lease/subscription of the IT solutions or equipment must be used in Singapore
  • Have a minimum of 30% local shareholding (for selected solutions only)

Steps To Apply

  1. Visit Tech Depot on SME Portal and choose a relevant tech solution
  2. Contact the vendor of the solution to get a quotation
  3. Submit an application to the Business Grants Portal

Once the grant is approved, the vendor can start on the project and merchants will be able to claim the cost after its completion.

BONUS: SkillsFuture Enterprise Credit (SFEC)

SMEs that have an approved PSG grant could obtain further subsidies under the SkillsFuture Enterprise Credit, totaling up to 98% of funding support.

Eligible SMEs will receive a one-off $10,000 credit to cover up to 90% of out-of-pocket expenses on qualifying costs.

Example:

Cost of service$20,000
PSG claim (80%)– $16,000
Out-of-pocket expense$4,000
SFEC Disbursement (90% of out-of-pocket expense)– $3,600
Final amount SME has to pay$400

What this means is that you could end up paying just 2% of the total cost of building your e-commerce shop!

Eligibility

There are 4 qualifying periods:

  • 1 April 2019 – 31 March 2020
  • 1 July 2019 – 30 June 2020
  • 1 October 2019 – 30 September 2020
  • 1 January 2020 – 31 December 2020

Within any one of the above period, SMEs must:

  • Have contributed at least S$750 Skills Development Levy over the period
  • Have employed at least three Singapore Citizens (SCs) or Permanent Residents (PRs) every month over the same period
  • Have not been qualified for SFEC at any of the earlier periods

Steps To Apply

Application is not required. Eligible employers will be notified by Enterprise Singapore directly in writing.

2. E-Commerce Booster Package

This is another grant by Enterprise Singapore in partnership with Amazon, Lazada Singapore, Qoo10 and Shopee.

Merchants can engage one of the e-commerce platforms for services such as content development, product listing, channel management, fulfilment, advertising and promotion, and attend training workshops.

If you are a new merchant that wants to quickly set up a standard shop online, a plan by one of the e-commerce platforms might suit you.

After creating your account, you can already list your products and start selling. Getting your brand to stand out might be tricky however as there are many sellers offering similar products.

For example in the screenshot below, there are 8 different merchants (highlighted in green) selling the same thing!

shopee

Within such a competitive space, merchants will need to rely on having good customer ratings, attractive discounts, free shipping and even buying ads to push their product to the top of the listing. Furthermore, some e-commerce platforms might take up to 10% of the commission.

On the upside, since the e-commerce platforms already have a large customer base, merchants can be sure that their shop will get at least some traffic and entice customers using the platform’s existing marketing channels like coupons and newsletters.

Currently under this scheme, eligible local retailers will receive one-time support to defray 90% of eligible costs (up to S$9000) or up to 6 months.

Eligibility

  • Business entity is registered/incorporated in Singapore
  • Have a minimum of 30% local shareholding
  • Company’s annual turnover not exceeding S$100 million per annum based on the most recent audited report, or group employment not exceeding 200 employees
  • Must not have an existing account with your chosen e-commerce platform
  • Each merchant can only apply with one (1) e-commerce platform

Steps To Apply

  1. Apply directly to your chosen e-commerce platform by 30 September 2020. Click here for more information on the respective e-commerce partners
  2. Applications will be assessed by the e-commerce platform providers

3. Start Digital Pack

This scheme by IMDA is in partnership with Singtel, Starhub, M1, DBS, Maybank, OCBC, and UOB. They offer new SMEs digital solutions in five categories – accounting, HR management system & payroll, digital marketing, digital transactions, and cybersecurity.

five categories under start digital pack

Although this scheme is not specific to setting up an online shop, merchants might still be interested in their digital marketing solutions such as email and SMS automation, and social media advertising.

Some of the partners are using the same platform for their digital solutions however so it is best if merchants enquire directly with them to compare before selecting the best plan for their business.

SMEs may adopt any two solutions from the categories above for free for a minimum of six months, with a contract period of at least 18 months.

Eligibility

  • Newly-incorporated SMEs
  • SMEs that are new to using digital technology
  • Each eligible SME is entitled to one Start Digital Pack (2 solutions) only

Steps To Apply

  1. Find a suitable digital solution here from the IMDA website
  2. Contact the Start Digital Partner directly to apply

4. Digital Resilience Bonus (DRB)

The Digital Resilience Bonus provides additional support to the Food Services and Retail sectors seeking to upgrade their digital capabilities as a means to quickly adapt to post-COVID safe management practices. The bonus is targeted at these two sectors for a start because they are the most affected due to the front-facing nature of their businesses.

Eligible businesses can receive payout of up to $10,000 on top of the enhanced digitalisation assistance under the SMEs Go Digital Programme.

The payout is capped according to the following categories of digital solutions:

F&BRetail
Category 1

$2,500

Accounting + HR/Payroll + Digital OrderingAccounting + HR/Payroll + Inventory Management
Category 2

$2,500

Online Food Delivery OR  e-Procuremente-Commerce
Category 3

$5,000

Data Mining & AnalyticsData Mining & Analytics

For example, if your company has received a PSG grant to set up an e-commerce shop by a pre-approved vendor such as eFusion Technology, you may receive a DRB under category 2 provided that you meet the eligibility criteria.

You may adopt more than one digital solutions category or all three for the maximum $10,000 bonus.

Eligibility

  • Business has been incorporated on or before 26 May 2020
  • Adopted PayNow Corporate and PEPPOL e-invoicing
  • Have used any of the qualified solutions at least once a month by 30 June 2021 (payout amount is capped at their respective category)

Steps To Apply

  • Application is not needed. If your company is eligible for the bonus, your digital solutions provider will apply for this bonus on your behalf
  • The digital solutions provider will submit your company UEN to IMDA
  • The DRB payout will be credited into your PayNow Corporate account starting from August 2020

When weighing whether one grant is more useful over the other, merchants have to keep in mind the goal of taking their business online in the first place. Will the online shop be your main revenue stream or just an extension of your physical one? Or are you more focused on building your brand name?

Merchants that are serious about their branding and having flexibility in managing their online shop should consider building their own site.

At eFusion Technology, we specialize in e-commerce development and maintenance with over 15 years of quality experience and an extensive e-commerce portfolio. As we are an IMDA-approved solution vendor under the PSG scheme, you can also get up to 98% funding when you build your e-commerce site with us. Contact us today for a consultation!


For more information on the grants, check out the following resources:

Productivity Solution Grant (PSG)

E-Commerce Booster Package

Start Digital Pack

SkillsFuture Enterprise Credit (SFEC)

Digital Resilience Bonus (DRB)