There is truism in the saying that, when Asia sneezes, Singapore catches a cold. Having a small domestic market means that Singapore’s industries, including retail, do depend heavily on the health of its Asian neighbours and beyond.
Even before the protests descended upon Hong Kong, the ongoing US-China trade war had already started to take its toll on the Singapore economy. Singapore’s usually healthy Gross Domestic Product registered only a 0.6% year-on-year growth by the third quarter of 2019. Retail sales dropped by 4.3% year-on-year in October 2019, the ninth straight month of fall.
International visitor arrivals to Singapore has also shown only nominal growth. For the first 10 months of 2019, there were 15.9 million visitors representing a 2.3% growth year-on-year; Southeast Asian tourists fell 0.11% in the first eight months over the same period the year before.
Preparing for a better future
While circumstances beyond its control may have impacted the island state, Singapore’s future-proof planning will likely put it in a good position once the economy picks up. Plans are led by the government, starting with its promotion of the digitisation of the retail trade.
Its Retail Industry Transformation Map, first introduced in 2016, is aimed at creating “a vibrant retail industry by 2020 that comprises a mix of highly productive omni-channel retailers, local brand owners with global footprints, supported by a professionally skilled workforce”.
There is also a series of government-led initiatives to boost industries, including SMEs Go Digital, which was launched in 2017 and has already seen 4,000 SMEs adopt pre-approved digital solutions; Business sans Borders, a marketplace powered by artificial intelligence to help SMEs find global buyers and suppliers; and the Automation Support Package that will give SMEs better access to loans.
The digital infrastructure and status as a finance and business hub in Singapore has attracted Internet economy companies to set up headquarters in the island state, bringing with them some US$16 billion in investment dollars.
In a commentary on Channel NewsAsia, Dinuke Ranasinghe, CEO & Co-Founder of Arcadier, said Singapore is at an “inflection point” where up-and-coming technologies and increasing rates of digitisation will fundamentally change the way individual consumers, businesses and even the government buy and sell goods.
Singapore has already been recorded as the second-largest market in Asia Pacific for overseas purchases despite its relatively small base. Revenues in the e-commerce market is expected to show an annual growth of 11.1%, resulting in a market worth US$3.9 billion by 2024. In 2019, there were already four million e-commerce users in Singapore, according to Statista.
In 2019, Singapore saw the opening of several new physical retail spaces — Design Orchard in January, which boasts 61 homegrown brands, and Jewel Mall in April, suggested by the media as possibly “the best airport shopping mall in the world”. The S$3.7 billion Paya Lebar Quarter is the latest to enter the retail scene. The four-hectare project comprises retail, office and residential components and boasts some 200 shops across six floors.
In 2020, the retail landscape in Singapore is set to become even more dynamic with the new entry of international brands in strategic shopping centres. As local consumers become more open minded to new trends and more savvy for quality products, many established overseas brands want to capture the opportunity for gaining better visibility and market share in Southeast Asia, starting from the little red dot.
The outlook is not all bad
There is undoubtedly pressure on consumer spending now, but the medium- to long-term economic prospects are favourable. According to UOB economist Barnabas Gan, retail sales will recover in the coming months. Healthy employment figures, rising salaries of 3% in 2020, and strong consumption demand bode well for retail forecasts.
The International Monetary Fund expects developing and emerging Asia to grow by 6.3% annually, on average, in 2019–2024; and ASEAN is expected to grow 5.2% over the same period.
With the industry in a good position to rebound come 2020, candidates in this space must be aware of the top hiring trends ahead. Aside from the aforementioned focus on omni-channel retail strategies, talent with CRM, data analytics and consumer insights experience will also likely be in demand in the coming year. Other roles in demand include Marketing Manager, Business Development Manager, as well as Sales Manager.
With an encouraging medium- to long-term economic forecast and initiatives to prepare the industry for the next phase of growth already rolling, the retail industry in Singapore can certainly look forward to brighter times ahead.
With more than 40 years of experience and 140 offices globally, PageGroup has one of the most comprehensive networks of employers and candidates in the retail industry. This article is part of our Market Movers series, which attempts to highlight various industry segments across specific markets.
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Visit Market Movers now for even greater insights.