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Consumer products to Singapore
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(Last updated: 13 Oct 2008)
Trends and opportunities
The market
Singapore is recognised as the gateway, a hub and market leader in the region with a substantial presence of international companies. It has a multi-racial population of about 4.8 million people and is sitting on a plan to expand this to six million.
The non-food consumer market in Singapore is a highly competitive one that is never short of choices in its own genre. The Singapore consumer is highly discerning and one that is well in tuned with international brands. They generally look out for quality while at the same time expecting value for their money. This means that products need good pricing and quality to go hand-in-hand. Where branding is not strong, unique selling points of difference and competitive pricing are crucial to success in this market.
With plans to create two integrated resorts to be ready in 2010 and its success in bidding for a Formula 1 race for the next five years (the first race was held in September 2008), Singapore expects to create a bigger buzz of activities and will look to bringing the country’s retail scene to another level.
Brands in Australia can take advantage of these future developments by working to cement a presence in Singapore at an early stage.
Opportunities
If products can carry good point of difference and can satisfy the retail/distributor margins highlighted above, there are opportunities for the following:
- Fashion and accessories
- Designer labels
- Children’s products
- Soft home furnishings
- DIY home products
- Other lifestyle-related products
Australian fashion and textiles currently sees opportunities in niche segments and have made inroads into Singapore through buys from various multi-label boutique stores and department store. Fashion Week (Spring/Summer and Autumn/Winter), is a popular event that is attended by many of these buyers.
Swimwear children’s apparel and bedroom soft furnishings have also seen successes in Singapore. Other areas of potential are lifestyle-related products and DIY home-related products.
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Tariffs, regulations and customs
Singapore is relatively a free port with excise taxes levied on a few items including alcoholic beverages, tobacco products, petroleum products and motor vehicles.
A seven per cent Goods and Services Tax (GST) is levied on all imported goods. GST is calculated on the CIF value of the goods, plus commission, other incidental charges and any custom duties.
For more information, please visit www.customs.gov.sg
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Marketing your products and services
Market entry
Pricing, quality, points of difference and in some cases, proper brand management are the main factors determining successful market entry. The high number of competitive brands/products and increasing influx of cheaper but quality substitutes from cheaper countries of supply all add up to an intense competitive playground.
The availability of choices makes for a consumer that demands a reason to buy. This could be value for money, uplift in image when associated with a brand and more importantly, when attracting interests from trade buyers, a unique product point of difference that a company can use when marketing the product.
Distribution channels
The distribution channels for the Singapore fashion industry comprises a mixture of:
- Direct to retail
- Importer/traders
- Distributors
- Agents
Commercial points to note for the market
Sellers must bear in mind that a product that is highly popular with consumers may not necessarily attract trade buyers. An attractive export pricing coupled with necessary marketing support (applicable where branding is concerned), is imperative in sourcing trade buyers’ interests.
Pricing should allow a trade buyer, healthy margins not only to themselves but also healthy retailer margins where distribution is concerned. As a guide, distributors use a 4 to 4.5 times multiplier on FOB export price to gauge rough retail pricing in Singapore while direct buys from retailers will see them putting a two to three times mark-up on the CIF export price.
It is common trade practice in Singapore for the company to request for exclusive distribution rights. In return, the brand owner can request for a submission of a proper plan for distribution including marketing budget and strategies. Effective product positioning, advertising and promotion activities will be crucial in driving consumer acceptance and confidence in the products.
With Australia attracting a high number of visitors and students from Singapore, the above considerations need to be addressed without having the resulting retail price too different to what is being sold in Australia.
Transport
Freight costs and delivery times will vary according to which port products are shipped from in Australia. The frequency of cargo ship availability also changes according to container volume movement.
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Contact details
The Australian Trade Commission (Austrade) is the Australian Government’s trade and investment development agency, operating as a statutory agency within the Foreign Affairs and Trade portfolio.
Austrade assists Australian businesses contribute to national prosperity by succeeding in trade and investment, internationally, and promoting and supporting productive foreign investment into Australia.
Austrade:
- Delivers services that assist Australian businesses initiate, sustain and grow trade and outward investment.
- Promotes Australia as an inward investment destination and, with the States and Territories, supports the inflow of productive foreign direct investment.
- Administers the Export Market Development Grants scheme.
- Undertakes initiatives designed to improve community awareness of, and commitment to, international trade and investment.
- Provides advice to the Australian Government on its trade and investment development activities.
- Delivers consular, passport and other government services in designated overseas locations.
A list of Austrade offices (in alphabetical order of country) is available.
More information
For further information please contact Austrade on 13 28 78 or email info@austrade.gov.au |
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