Overview of Singapore Economy and Franchise Sector

At a Glance

Singapore’s economy is predicted to increase by all-around 3.5% in 2014 aided by healthful domestic demand from customers and a strong expert services sector. Financial growth is predicted to get momentum from 2015 to 2018 as external desire strengthens.

Franchise Look

Singapore is an open up friendly financial system. For the 9th constant yr the World Financial institution rated Singapore #1 for ease of performing small business. It is a forward place with solid offer chains and a formulated infrastructure. The franchise industry is incredibly nicely managed and clear so there are several regulatory hurdles compared to its Asian neighbours. Because of to the trustworthy program there is a specified peace of intellect when dealing with prospective Singapore partners.

According to McKinsey, Singapore is rated as the 4th most related place in the entire world so features a superior hub for your regional headquarters and a springboard to broaden across Asia. There are all around 7,000 multinational organizations with a lot more than 50 percent of them applying Singapore as their regional headquarters.

Of 20 non-public economists surveyed by the Financial Authority of Singapore (MAS) anticipated GDP development for 2014 is 3.8% and this is forecast to increasingly increase in excess of the following 5 a long time.

Regardless of comparatively slower Asian advancement, retail revenue were being up 5.5% in July 2014 (Singapore Office of Statistics) and are forecast to increase by approximately 20% from 2014-2016 (PwC).

The food stuff and beverage sector contributed about 3.2% to GDP in 2013 with Singapore acquiring the greatest for each capita foodstuff consumption in Southeast Asia (Study and Markets). The retail and wholesale trade sector accounted for 16% of GDP, up 5% from the earlier yr the financial expert services sector grew 10.6% and small business solutions rose 5.1% (HKTDC). The company sector is by much the largest employer and adds around 60% to GDP.

The authorities has a pretty world-wide mindset and is reliant on world business and imported merchandise. There are a raft of worldwide and regional no cost trade agreements with hardly any tariffs on most agri-food products and solutions. Franchise information and facts (together with economic incentives) can be located by the following govt backed organisations:

SPRING-Specifications, Productiveness and Innovation Board.

Intercontinental Company (IE) Singapore.

Singapore has a extremely multi-cultural, globally mindful inhabitants and is for that reason a great exam advertising and marketing area before committing to a regional start. The population is smaller and predominately urban but has an enviably reduced unemployment level. As a final result, it is just one of Asia’s richest international locations in phrases of customers, the stage of for every capita wealth is just one of the greatest in the region and has risen consistently above preceding a long time.

The ordinary month to month household revenue of Singaporeans rose from $8,110 in 2007/08 to $10,500 in 2012/13 with households spending an normal of $4,720 a thirty day period on merchandise and solutions. Complete client expenditure is forecast to grow by CAGR 5% from 2011-2016 and 36% of Singaporeans sense the up coming 12 months would be a fantastic time to get the factors they require or want (Nielsen 2014).

Food items is the 2nd most significant expenditure guiding housing and, interestingly, non-public instruction accounts for a substantial proportion of expend-equal to college schooling expenditure (Singapore Office of Statistics).

Given the larger money, the ordinary client is well traveled and is pretty model savvy. They have a good stage of sophistication and are really receptive to overseas products and solutions and products and services. The typically bigger affluence usually means there is a fewer value resistant current market-a beneficial place for top quality brand name firms to bear in thoughts.

The franchise enterprise in Singapore is healthful there are around 600 concepts with additional than 35,000 franchisees. Franchising and licensing accounts for 18% of full domestic retail product sales volume and generates a turnover of about $6 billion. Franchisors from a array of nations are present, across a range of sectors. The majority of brand names are from The usa while Singapore continues to be the most preferred Asia location for Australian franchisors.

Singaporeans are keen to locate new franchise opportunities and are adept in dealing with foreign franchisors. They not only have a very good knowledge of their domestic market but also the regional market place. This, merged with the strategic location produces openings for international brand names to associate with knowledgeable Singapore firms in order to lengthen their manufacturer across the area.

A effective overseas notion established in the Singapore marketplace has the possibility to be taken on by the domestic spouse and designed across the area, as a result substantially mitigating the possibility and price to the foreign organization.

Handy facts snapshots:

• Shoppers will be quite mindful of food items safety and health and fitness.
• Singapore’s client foodservice market noted US$7.5 billion in whole retail income in 2011, a 3.3% growth from the prior calendar year.
• Singaporeans devote about US$5 billion per year consuming out. Eating places as a group account for 37% while speedy meals outlets account for 13% of the complete income in the foods and beverage solutions marketplace.
• Almost two thirds of Singaporeans (61%) surveyed ate out a lot more usually in the earlier year than they did in the two years prior.(Weber Shandwick 2014)
• The Singapore confectionery marketplace is promising owning showed continuous expansion of 20% above the previous 5 many years. The US$210 million market place is primarily led by sugar and chocolate goods (Canadian Federal government).
• Profitability ratio of the in general foods and beverage solutions business was 7.3% in 2012. All food and beverage products and services documented will increase in running receipts in 2012 (Singapore Department of Data).
• Tuition and private education and learning is a balanced sector and signifies a increasing expenditure for Singaporeans. They do on the other hand have greater respect for reliable, verified brand names.
• Two main supermarket chains dominate the Singapore retail market: Chilly Storage (Dairy Farm) and NTUC Fairprice. In addition to this Singapore has yet another 1,300 specialty foods and drinks stores- and these enterprises are trending.
• Singapore is regarded to be 1 of the most aggressive discounting societies (Reed).
• An approximated US$3.5 billion is predicted to be invested on the net in 2015. (asianewsnet.com). Weber Shandwick’s 2014 survey noted about 50 % of respondents (53%) ordered foodstuff on the net at the very least at the time and 15% purchase between 1 and a few occasions for each thirty day period.

Sector developments:

• Expert items will rise, this kind of as artisan bakeries, organic grocers and purely natural cosmetics.
• Bespoke magnificence solutions and products and services are a growing sector.
• Unprocessed and functional foodstuff will improve in acceptance as shoppers come to be additional well being informed.
• Guess what-cupcakes are the new significant development in Singapore.
• Wholesome, fresh new juice beverages will be an emerging sector.
• Dining establishments that have a distinctive natural environment and offer a one of a kind having working experience are a existing and potential trend.

Singapore customer

Shoppers in Sinagpore are extremely open up to getting overseas products and solutions. They are generally faithful to a model so it is crucial to present some kind of retention scheme. Nevertheless Singaporeans do like to experiment and will consider new items-specifically if they have noticed the principle while traveling or listened to about the good quality or client provider.

While they have a substantial regular of dwelling they are innately incredibly price tag mindful. The cost point has to be desirable and match the current market so it is recommended complete investigation is carried out: pricing oneself out of this marketplace could establish a catastrophic oversight.

Analysing Singaporean buyer actions does not seem so difficult as there appears to be a typical consensus about why they buy. It is suggestsed to drive your model as a result of first rate promotions, therefore building preliminary buyers, and retaining them (whilst at the same time creating a wonderful phrase of mouth marketing campaign) with your degree of top quality and company.

As with the relaxation of Asia, comfort is turning into a main purchase motivator. Modern-day retail formats, absence of time and in excess of work are components supporting this change in actions. Makes that relieve the process of buy and/or present a wide range of supply channels will have a increased likelihood of good results.

Last of all, Singaporeans like to have an emotional link with a brand name so a story driving the brand name can be a important advertising level. Emphasis your heritage or the top quality of your deliver/assistance. Make a great deal of your consumers, endorsements and your domestic impression.

The base line

A risk-free sector that isn’t going to depart much to the creativity-you should not read this as a adverse. The clear laws and trustworthiness of partners make for a simpler, far more experienced course of action than in some other Asian nations, and there is a good deal to be said for that.

To conclude: A experienced, stable current market and effectively controlled field, but modest.

Position: 6/10.