Growth rate could hit 11.7% in three years.
Singapore is one of the most attractive e-commerce market in Asia.
According to BMI Research, e-commerce players can find growth in the "small but mighty" due to its fully urbanised populations, wealthy consumers, and highly developed logistics networks.
Singapore's e-commerce sales are poised to reach $10b (US$7.4b) within 2017 to 2020, with a growth rate of 11.7%.
It also scored 84.5 out of 100 in the Trade and Procedures Governance measure, the highest amongst 12 countries that were studied.
However, BMI Research said e-commerce growth can be limited by the country's small population, as it has already penetrated all areas of mass market retail from food to fashion.
It forecasts population to hit 5.9 million in 2020, significantly smaller than in other countries such as Hong Kong and Taiwan. This is also the lowest amongst the 12 countries studied.
As a result, the spending population could only reach 26.7%, one of the lowest amongst countries, but the percentage of mass affluent class could still remain high at 99.5%.
The firm sees more growth in premium goods and value-added services, wherein companies are trying to topple one another through the level of service to their consumers.
This was highlighted by Amazon's entry into Singapore via its Prime Now same-day delivery service in July 2017.
Here's more from BMI Research:
Hong Kong and Singapore also offer ideal bases for expansion by e-commerce providers in the wider Asia region.
Alibaba, for example, has a 14.4% stake in Singapore's national postal company Singpost, which offers dedicated logistics and delivery services across South East Asia (a key area for expansion for Alibaba).
The collaboration provides the Chinese e-commerce giant with end-to-end delivery support, helping to overcome significant logistical hurdles in markets such as Indonesia, Philippines, Thailand and Vietnam.
Similarly, Amazon chose Singapore as its first entry point in Asia Pacific, providing a springboard for further expansion in the region over the coming years, with Australia lined up next.
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