Singapore’s economy continued its healthy trend for 2017. GDP was down slightly at 3.1% compared to the previous quarter at 5.2%, and continued low unemployment figures boosted job confidence. Singaporeans are increasingly optimistic with a stable Consumer Confidence Index at 94.
The coming quarters will be interesting to watch following the announcement of proposed GST increases (from 7% to 9%) in the coming years. Whilst the increase will not come into effect until 2021, some are anticipating that it is likely to impact consumer spending across the board in retail, with higher costs anticipated across all channels.
In addition, the government is also imposing GST on cross-border digital transactions (ecommerce) to level the playing field between local GST-registered retailers and overseas sellers, which will impact the prices of imported goods. Traction for ecommerce is growing as more brick-and-mortar retailers establish their presence on various ecommerce platforms while at the same time, online shopping gains momentum from an increasingly tech-savvy population.
Health and wellness is a theme that is growing in importance in Singapore, buoyed by the government’s strong push towards healthy eating habits for all Singaporeans. Policies and initiatives like encouraging consumers to buy products with a Healthier Choice Symbol (HCS), the re-launch of the National Steps Challenge, and the introduction of healthy products in public institutions are all part of the government's’ “Healthy Nation” agenda to encourage a healthy lifestyle for Singaporeans.
These signals are a call to action for manufacturers and retailers. To thrive in the FMCG marketplace in 2018, it is evident that manufacturers and retailers need to be proactive in meeting the health agenda and understand how government policies will impact citizens and their spending.
Though consumers are shifting parts of their shopping to ecommerce channels, it is still vital for retailers to maintain a physical presence to appeal to experiential shoppers. To capitalise and capture the entire market, it is inevitable for retailers to adopt and innovate omni-channel retailing to stay relevant to consumers.