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The Austrian executive aggressively bought new businesses, including firms active in e-commerce. However, the push ate into the group’s overall profit margins. SingPost also took a hefty write-off on an e-commerce business recently. The e-commerce business was bought during the buying spree spearheaded by Baier.

In its frenzied pace to transform itself, SingPost had glazed over due diligence efforts and sacrificed long-term shareholder value.

Different Market Dynamics

Banks operating in oligopolistic structures may not survive the cut-throat market conditions of e-commerce. Years of losses and razor-thin margins reported by Amazon is testament to this.

Short product cycles, warranty requirements and instantaneous responses to customers are the order of the day for e-commerce firms. In contrast, bank products have longer cycle runs, no guarantees granted on investment products, and banks typically take days to respond to complaints. 

Banks hoping to get their slice of the e-commerce market have to understand their unique propositions to the market and ask whether they can withstand stiff competition from established e-commerce platforms willing to lower prices or go the extra mile for delivery of products and services. 

The Crypto-Competition

While ride-hailing giants and e-commerce platforms expand their grip on digital payments, a newer breed of e-commerce players are also emerging. They promise cost savings on cross-border transactions by accepting cryptocurrencies, and time-savings for consumers who are looking to shop across different online shops. Singapore-based Luminore 8 for example, is launching a global buying platform that accepts bitcoin, ethereum, Singapore dollars, and U.S. dollars.

The new breed of e-commerce players are building their offerings based on the blockchain technology or digital assets from the start, enabling them to create payment systems and eco-systems that leapfrog older e-commerce firms.

With major changes in both the digital payments landscape and e-commerce space, will banks do a U-turn or forge ahead with their e-commerce ambitions?