Trends: Luxury Market

Understanding the Singapore luxury market and how to maximize what it has to offer

Singapore’s Luxury Market

 

Singapore is a great place for shopping. It ranks 5th in the 5 largest destination countries by value of tax free shopping value after France, Italy, UK, and Germany.

 

Singapore has a high concentration of high-net-worth individuals. Singapore’s GDP per capita at US$60,400 is the world’s 3rd highest (after Qatar and Luxembourg) and that is one reason why Singaporean consumers are among the biggest spenders on luxury goods.

 

Singapore consumers are resilient and brand conscious. Despite the slowdown of the economy of the city-state, Singapore continued to showcase a strong purchasing power which remains very healthy among clients of luxury products. Beyond this, Singapore consumers tend to perceive international brands to have better quality assurance as well as prestige and exclusivity.

 

Singapore has access to the rest of APAC market. According to the World Wealth Report 2014, the Asia Pacific region is expected to be the largest HNWI market by population in 2014 and by wealth in 2015. Being part of ASEAN and the economic integration (AEC) in 2015, Singapore will provide greater access to the ASEAN market. ASEAN Countries actively seek to emulate and learn for Singapore and their successes.

 

Singapore attracts many foreign tourists. It attracts week-enders and visitors from neighbouring Indonesia and Malaysia, and travellers from China who also happen to be the largest contributors for duty-free shopping at Changi airport, accounting for almost 25% of total sales, and with a spending growing at the rate of 25% year on year.

 

Singapore’s suburban malls allow for better market penetration. Major brands such as Coach, Kate Spade Saturday and Pandora are having better access to suburban Singapore consumers and vice versa who are “just as wealthy and sophisticated as those living in the city centre”. More luxury malls are set to open in light of the Government's decentralisation strategy to transform suburbs into regional centres.

 

Maximize the potential

 

Singapore has many International Agreements. 20 Regional & Bilateral Free Trade Agreements/Economic Partnership Agreements (FTAs/EPAs), 74 Double Taxation Agreements (DTA) and 41 Investment Guarantee Agreements (IGAs). With FTAs, Singapore-based exporters and investors stand to enjoy a myriad of benefits like tariff concessions, preferential access to certain sectors, faster entry into markets and Intellectual Property (IP) protection.

 

Singapore has a multiracial and multinational society which is ideal for conducting market research and testing the APAC market Companies such as Unilever & P&G use Singapore as a base to access a wide range of nationalities and race types for their market research at one go.

 

Singapore has world class banking facilities and professional services. Transactions are secure and reliable. Moreover, language will not be an issue as Singaporeans are multilingual with English as the main business language. It has a spectrum of professional services available to allow for easy outsourcing of work.

 

Singapore has reliable distributors which have access to the APAC Market. Many distributors have experience working with international companies and a wealth of knowledge of import/export laws.

 

Leverage on Singapore’s increasingly sophisticated growing middle class.  The growing middle class are educated and IT Savvy. They are well-informed, capable and willing to purchase premium products so long as they are able to provide substantial benefits. Younger consumers (below 40) tend to follow trends and pick up information through social media reviews as well as word-of-mouth recommendations. By effectively engaging consumers through social media, you will be able to tap into the market through cost effective means.

 

References: Singstat, Euromonitor Passport & Singapore Business Review

 

Should you be looking for partners/distributors for more information about your product suitability for the Singapore market, please contact Tina at tina@britcham.org.sg

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