Mr Gerald Giam Yean Song asked the Deputy Prime Minister and Minister for Trade and Industry (a) whether the Ministry has assessed the impact of a major e-commerce platform’s recent extension of payment terms on small businesses in Singapore; and (b) whether regulations can be applied to ensure that large e-commerce platforms release payments promptly to support small merchants and prevent undue delays in cash flow.
The Minister of State for Trade and Industry (Mr Alvin Tan) (for the Deputy Prime Minister and Minister for Trade and Industry): Sir, the Government engaged the e-commerce platform after receiving feedback on changes to its payment terms.
The e-commerce platform had updated its payment terms in June 2023 to allow the platform to wait until after the buyer’s return or refund period ends before releasing the monies to the merchants. This was to strengthen its consumer protection and fraud detection efforts. As these are private commercial agreements, we provided the feedback provider with a contact point at the e-commerce platform and advised the feedback provider to engage the e-commerce platform directly to address further concerns.
In the case of disputes, there are established processes and available legal avenues to assist merchants, including small businesses. For example, they can file a civil claim with the courts.
Mr Speaker: Mr Gerald Giam.
Mr Gerald Giam Yean Song (Aljunied): Sir, I thank the Minister of State for his reply. Could the Ministry of Trade and Industry (MTI) lean more on these large e-commerce platforms to enforce fairer prompt payment terms, specifically for smaller merchants, so as to ease their cash flow challenges? These small merchants have limited negotiating power and lack the financial resources and access to financing of larger firms.
Secondly, what immediate support options beyond long-term digital grants can be offered to smaller merchants to mitigate cash flow gaps caused by delayed payments on major platforms?
Mr Alvin Tan: I thank Mr Gerald Giam for his two supplementary questions. As I mentioned earlier on, the changes to the payment terms between the e-commerce platform and their merchants are commercial arrangements. However, MTI and Enterprise Singapore had gone the extra mile. We, in fact, contacted the feedback provider and thanked him for the feedback. We shared that Enterprise Singapore had, in fact, contacted the platform. We responded also to the feedback provider on the two issues that he had raised and also provided a point of contact to the platform provider. We also shared the feedback provider’s feedback and suggestions to the platform.
On his questions about how to better support small- and medium-sized enterprises (SMEs) and also merchants, there are a few ways. One, let me just be quite specific, it is not just specific to this platform but, for example, we collaborated with this platform and, in fact, others, with our Enterprise Singapore teams, on initiatives to uplift the overall ecosystem. Number two, we had programmes to help our SMEs internationalise and also to help them to kickstart their e-commerce journey.
We are also supporting and helping partner with e-commerce platforms and heartland retailers to adopt e-payments and other digital commerce solutions. But for specific merchants who face cash flow difficulties, they can contact any of the participating financial institutions listed on Enterprise Singapore’s website to apply for Enterprise Financing Scheme Working Capital Loan.
So, these are all measures in which we can continue to support SMEs and merchants that are available particularly if they have cash flow issues.
Ministry of Trade and Industry
12 November 2024
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Office of the Leader of the Opposition 