Singapore, Retail hub in S-E Asia

With gross domestic product (GDP, 2006) of $ 137.5 billion and per capita income as high as $ 29,454, Singapore is one of the most affluent nations of Asia. Manufacturing and services are the main contributors to the economy of the country. While manufacturing sector accounts for over 20 per cent, service sector accounts for around 68 per cent of the GDP. A major supplier of electronic products and components, the island country is also a leader in shipbuilding and repairing.

With a population of over four million and thousands of visitors thronging in around the year, Singapore is a hub of retail activities in south-east Asia and has all the potential of becoming a global market in the years to come. Owing to a potential market and its open policy, Singapore attracts foreign investments in huge amounts. Local production of high-tech products such as personal computers (PCs) and consumer electronics is well developed and the country has an extensive export-oriented production base. Rich in heritage and culture, Singapore is a venue for international retail events like Great Singapore Sales (GSS) and Singapore Food Festival. Large numbers of retailers and consumers from all around the world participate in these events.

 

Retail scenario

The retail sector in Singapore experienced a setback in the first half of 2003 due to the outbreak of severe acute respiratory syndrome (SARS) and this brought retail sales down by around 2.5 per cent. Besides curtailing local demands, the virus affected the segment of tourists and business travelers who constitute a major source of retail sales demand. Recovering from the sorry state, the retail sector recorded, in 2006, sales worth S$32.8 billion. The biggest three retailers in Singapore are NTUC FairPrice Co-operative, Cold Storage Singapore (a subsidiary of dairy farm of Hong Kong) and A.S.Watson. Other major companies include French company Carrefour and Chinese company Beijing Hualian. Combined together, these five majors have a market share of around 20 per cent.

NTUC FairPrice Co-operative

NTUC FairPrice Co-operative was established in 1983 with the merger between two local chains - NTUC Welcome and Singapore Employees Co-operative. In 2000, the company acquired the supermarkets from Yaohan, a Japanese chain and operates presently a network of around 180 stores across the country. The company, in 1999, started to set up convenience stores with its Cheers brand. Since the beginning of 2004, it has been using its convenience store format in Esso and Mobil petrol stations. In December 2006, the company opened its first hypermarket, with its FairPrice Xtra shopping centre, and some existing larger stores are expected to be changed into the Fairprice Xtra format. Today, FairPrice is one the three largest supermarket retailers in Singapore. Owned by about five lakh Singaporeans, the chain caters to the needs of more than a million people everyday. With a workforce as strong as 5,000 people, FairPrice is the best place to shop and also the best place to work. The chain recorded retail sales of over $1.42 billion in the last financial year and, to remain a leader in the market, the chain has continuously revolutionised its business of retail.

Cold Storage Singapore

The company began its operations in 1903 and has around 100 supermarkets through its local Cold Storage, Market Place and Shop N Save chains. In 2003, the chain acquired the Shop N Save brand from a Belgian group, Delhaize. The company offers more than 1,500 products that range from fresh food and beverages to household products. With over 100 years of experience in Singapore, Cold Storage is the first supermarket in Singapore to receive the CASE TRUST, a mark introduced by CASE in 1998 to distinguish companies of high degree consumer confidence.

Watsons Your Personal Store

With 100 stores of over 1.4 lakh sq.ft, Watsons Your Personal Store is the largest health and beauty retail chain in Singapore and offers a wide range of personal care and daily necessities. It was around 18 years ago that the chain started its operation in Singapore with the opening of a 4000 sq.ft-store at Marina Square. Today, it is the biggest beauty and health chain store in the city-state and ranks top in the field of cosmetics and personal care products.

Watsons Your Personal Store is the flagship health and beauty operation of the A.S.Watson Group (ASW), a wholly owned subsidiary of Hutchison Whampoa Limited. It is the largest health and beauty retail chain in Asia operating more than 1,500 stores in 13 markets - Hong Kong, Taiwan, Mainland China, Macau, Singapore, Thailand, Malaysia, the Philippines, Korea, Turkey, Indonesia, Estonia and Slovenia.

Carrefour, Singapore

Global retailer, Carrefour operates more than 12,217 stores, hypermarkets, supermarkets and convenience stores spread over in 29 countries of the world. The first ever hypermarket in Singapore came with the coming of Carrefour. The chain offers consumers a one-stop shopping destination with a wide range of food and non-food products, at great discount-prices. The chain has a reputed customer service. 

 

Consumer goods

Cosmetics and toiletries sector: Four US companies, Clinique, Este Lauder and Procter & Gamble, a UK-Dutch firm, Unilever and two Japanese companies, Shiseido and SK-II are among the leading players. Beiersdorf of Germany and LOral of France also have large shares in the market. Clinique, Este Lauder, Lancôme of France, Shiseido and SK-II are among the top ten premium brands in department stores. When it comes to the upper-mass-market brands, Nivea (owned by Beiersdorf of Germany) and LOral are successful brands. The total value of cosmetics and toiletries sales is estimated to have grown by 1.1 per cent during 2006.

Consumer-electronics market: Companies like Aiwa, Matsushita, Sony, Hitachi and Sanyo (all Japanese) are among the major companies. Other prominent companies include Samsung and LG (South Korean companies), Whirlpool of the US and Philips of the Netherlands.

Computer and multimedia sector: This sector is dominated by five US companies viz IBM, Hewlett-Packard (HP), Apple, 3Com and Texas Instruments. Besides these majors, two significant local companies - Creative Technology and GES International – are relatively significant. Under the Data Mini and DMC trademarks, GES develops computers and exports these to other Asian countries and Australia.

 

Hotel sector

Fairly crowded Singapore is home to its residents and visitors as well. The city provides a wide variety of accommodation types catering to all budgets and preferences. Right from backpacker, budget and youth hostels, the range extends to boutique, luxury and five-star hotels. Most of the hotels come with standard facilities like IDD (international direct dial) phones, room service, internet, cabled television, data ports for modem, bars, no-smoking room or floors, fitness center and conference halls.

While miles of malls and malls are seen on the Orchard Road, popular hotels are located in the central area. Globally, latest consumer preference in hotels is growing more and more towards privacy and luxury: desire for independence and style. Many a luxury hotel and attractive resort in Singapore satisfy and cater to this latest preference of travelers or visitors. Whether the purpose of visit is business, leisure or else, Singapore has been a cynosure-place for visitors. Reaching out of the Middle East, the visitor-market of Singapore extends from China in the east up to Russia in the west. Besides specific promotional activities, events like GSS, Art and Food festivals attract and catalyse visitor-arrivals.

In 2006, approximately 9.7 million visitor-arrivals were recorded and the sector garnered around S$ 12.4 billion in tourism receipts (TR) exceeding the set target of S$ 12 billion and posting a 14.5 per cent growth over that of the previous year. The performance of the hotel sector was simply great and impressive. According to reports, the AOR (average occupancy rate) went up to 85 per cent in 2006 – an increase of 1.4 per cent over that of the previous year. Over the years, the number of visitors has been on the rise boosting the market to higher and higher levels. In April 2007, a new record was set with the registration of around 8.18 lakh visitors.  The marginal increase rate was estimated at 0.2 per cent over that of last year. While hotel room revenue saw a growth rate of 21.2 per cent touching S$ 1.5 billion, revenue per available room (revpar) also increased by 21.6 per cent (compared to 2005’s).

 

Conclusion

Despite smallness in size, Singapore holds a mighty position in retail and exports. Flanked by an ever-growing tourist market and an open market policy, the country’s retail industry has not only a bright future but also all the potentials to become a global shopping destination in the next five years. Recent establishment of the Institute of Singapore Retail Studies will raise the retail capabilities and standards of the island country. Singapore’s retail sector sees also 10,000 new jobs in near future while more jobs will come up in retail sub-sectors like department stores.

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