Amazon, the world’s biggest e-commerce giant, has effectively admitted defeat in Singapore. On July 6, the US company began phasing out its fulfillment service, whereby it stores goods for retailers in its facilities. Amazon Fresh, which delivers groceries within a two-hour window, will cease operations and third-party sellers will also be affected.
It is not quitting the city-state entirely. “We’re seeing strong demand for products from international stores,” said Peter Li, Amazon’s Singapore country manager, in a statement announcing the move. He said the company will now focus on shipments from its stores in the US, Japan, and Germany.
This mirrors its strategy in other parts of Southeast Asia, but “strong demand” is a relative term. Amazon’s share of the region’s e-commerce market is less than 0.3%.
Singapore residents’ shopping attitudes explain part of the problem. “At first I thought Amazon was the best, as items from the US arrived within a few days,” said Jonathan, an American engineer in his 50s who has lived in Singapore for more than a decade. “But when it comes to casual clothes and dog food, I don’t really care about brand. Price matters more, and Shopee has now become my first choice.”
Dominating the sector are Shopee, owned by Singapore-based Sea; TikTok, part of the China-based ByteDance empire that also owns a controlling stake in Indonesian platform Tokopedia; and Lazada, owned for the past decade by China’s Alibaba.
Unlike Amazon they have adopted a hyper-localized approach, employing local managers and selling goods mostly from local retailers at a lower price point.
Li Jianggan, founder and CEO of Momentum Works, a company that monitors and analyzes trends in the region’s tech industry, attributed Amazon’s failure to its struggle to adapt its US-style model. This relies on sellers stocking inventory in its warehouses, with the company handling delivery directly. But that can lead to delays, particularly in Southeast Asia, where infrastructure is more fragmented and so shipments can get caught up in congestion.
Shopee, by contrast, employs a localized approach, whereby sellers first ship products to nearby hubs and the platform then manages downstream logistics. A significant portion of this is handled by Sea’s in-house logistics arm, SPX Express.
While Singapore stands out for its well-developed infrastructure, “Amazon’s centralized model remains costly to sustain in a relatively small market, particularly given its limited market share,” Li said.
Amazon selected Singapore as its initial entry point into Southeast Asia, venturing into the market in 2017. Through its Prime services, offering international brand products from around the world, fast delivery of daily essentials and its Amazon Prime Video streaming service, the company attempted to use its Singapore operations as a springboard to expand in the region.
But it failed to meet expectations. The company, which had shut down its domestic online retail operations in China in 2019, never achieved more than 0.4% market share—in 2022—and since then effectively retreated into its international shell.
Jon Russell, co-founder of consulting company Fully Drafted and author of Asia Tech Review, said by way of explaining Amazon’s failure to establish itself in the region: “It often feels like US companies come to Southeast Asia mainly to sell products from the US, rather than adapt to local markets.”
“Chinese companies see Southeast Asia as a market where they can experiment with ideas that they can potentially expand into the US or Europe. There is more focus on innovation and product building,” he said.
When Nikkei Asia visited Amazon’s fulfillment center in mid-June, the site in an industrial area on the western side of the island was largely quiet. The facility, which once spanned about 16,000 square meters, had been upgraded with dedicated chiller and freezer capacity as well as automated back-end technology.
Only two trucks were waiting in the vast docking yard, in stark contrast to the bustling logistics centers nearby. The spiral ramps inside the Amazon facility were empty, with no vehicles entering or leaving.
“I think Amazon is a very rational company, and its investment decisions are based on extensive analysis and careful calculations,” Li said.
By Southeast Asian standards, Singapore remains a relatively small e-commerce market, with gross merchandise value (GMV) of about USD 5.9 billion and growth of 21% in 2025. Of this, Amazon’s share was around USD 400 million, or 6%, according to Momentum Works estimates.
In contrast, Indonesia leads the region with a market worth USD 57.7 billion last year, while Thailand has surged to USD 35.5 billion, driven by rapid growth of 51.8%.
Across Southeast Asia, Shopee’s GMV stands at USD 83.2 billion, followed by TikTok with USD 45.6 billion and Lazada with USD 18 billion. Amazon accounts for only about USD 0.4 billion, roughly a one-thousandth of its business in the US.
In the region, Sea continues to consolidate its leading position. It operates in Singapore, Malaysia, Thailand, Indonesia, Vietnam, the Philippines, Taiwan, and Brazil, and reported GMV of USD 37.3 billion in the January to March quarter of 2026, up 30% from a year earlier.
“Looking ahead, we are confident in the strength of our Shopee ecosystem and our ability to execute our strategies. We are on track to deliver our 2026 guidance: to grow Shopee’s annual GMV by around 25% year on year,” Forrest Li, Sea’s chairman and CEO said in an earnings call in May.
Localization is driving this. For instance, in Indonesia it focuses on the modest fashion segment and Islamic daily wear, sourcing products from small local factories supported by Sea’s financial arm, SeaMoney, and its logistics network.
When users open the Shopee or Lazada apps, they can find cheaper shirts and non-branded items alongside game-like voucher lotteries, while Amazon tends to feature international brands.
According to Momentum Works’ Li, Shopee has a strong local management team in each country, enabling swift decision-making on the ground. The platform also incorporates interactive features such as Shopee Live, in-app gaming, and extensive use of creators and affiliates to maintain high user engagement, helping to differentiate it from the American giant.
Lazada is also a formidable competitor to Amazon. Its online grocer RedMart—a Singapore-based business acquired in 2016 that competes with Amazon Fresh—highlights the importance of local offerings. Consumers can find cheaper varieties of jasmine rice and seasonings, staples in the multicultural city-state, that Amazon cannot offer as effectively.
“When people ask me what the standout moments were with Lazada, beating Amazon usually makes the [top three],” Maximilian Bittner, the former CEO and co-founder of Lazada, wrote on LinkedIn after Amazon’s announcement that it would shut its Singapore fulfillment services.
TikTok, meanwhile, has rapidly expanded its e-commerce presence through live streaming, increasing its GMV in Southeast Asia from USD 0.6 billion in 2021 to USD 45.6 billion in 2025. Its parent company, ByteDance, also acquired a 75.01% controlling stake in Tokopedia from Indonesian tech giant GoTo for USD 840 million in 2024.
TikTok Shop, an e-commerce feature embedded within the TikTok app, allows merchants and creators to sell products directly through videos and livestreams, positioning Southeast Asia as a testing ground for its livestream commerce strategy. The platform has been rolling out initiatives across the region to refine its model of combining entertainment with online shopping.
In Singapore, training programs led by TikTok Shop form part of a broader effort to reskill the retail workforce. The initiative is backed by a collaboration between TikTok Shop, the Singapore Retailers Association, and Workforce Singapore, a government agency.
Under the program, retailers are equipped with skills in live stream selling, content creation, and digital marketing, reflecting the growing importance of social commerce in the sector. The move underscores how platforms such as TikTok Shop are reshaping traditional retail by integrating entertainment-driven formats into the shopping experience.
The platform is also deepening collaboration with popular Southeast Asian influencers to attract younger consumers.
Caitanya Tan, a Singapore-based actor with about 260,000 followers on TikTok, showcases cosmetics and apparel on her account, linking directly to TikTok Shop pages. At a TikTok creator event in Singapore in February, she said: “I promote products authentically because I actually use them … Growth now comes from trust, not so much from campaigns.”
Amazon, by contrast, increasingly views Southeast Asia not as a consumer market but as a key export hub serving the US and other global destinations.
The company has been expanding efforts to support Vietnamese small and mediumenterprises in reaching international customers. The initiative links local manufacturers directly with overseas buyers, with logistics streamlined through direct shipping routes to the US.
Vietnamese selling partners have recorded strong momentum, with the number of products sold on Amazon rising 35% in the 12 months ending July 2025, highlighting the growing international footprint of the country’s businesses. Thousands of companies are now using the platform to export goods including gourmet products and pottery, broadening their global presence.
The push may also reflect a broader competitive response, as Amazon faces growing pressure from low-cost platforms such as Temu and Shein, which have rapidly expanded their presence in the US market with affordable offerings.
In December 2025, Susan Pointer, Amazon’s vice president for international public policy and government affairs, visited Vietnam and held talks with deputy prime minister Le Thanh Long.
Pointer reaffirmed Amazon’s long-term commitment to cooperation with Vietnam and to raising the global profile of made-in-Vietnam products.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.