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Singapore consumers scale up with rising affluence
Thanks to fast-rising affluence in a large segment of its population, Singapore’s consumers are trading up in their purchases these days. According to a recent Credit Suisse Global Wealth report, Singaporeans are the world’s sixth richest people. Almost half the adult population is among the world’s richest 10%. In 2019, the average Singaporean had US$300,000 to their name.
This has encouraged a shift in consumer demand to premium products, including FMCGs. In a Nielsen survey, close to half of Singaporeans (49%) believed that they were better off than five years ago. Some 67% indicated that they lived comfortably and were able to buy things they want, supported by a 23% increase in disposable income from 2014.
Personal electronics topped the charts for having the highest number of Singaporeans (36%) willing to pay a premium; meat and seafood was third at 26%; cosmetics was next at 23%; dairy products and haircare weighed in at 22%.
Green and healthy is in
In the same survey, more than 80% of Singaporeans said they were willing to pay premium prices for products that contain ‘organic or all-natural ingredients’ and ‘environmentally friendly or sustainable materials'.
More shops are focused on providing eco-options and products. Skincare and cosmetics label Lush, for example, gives customers the option of going ‘naked’ by offering lotions, shower gels and shampoo bars packaging-free. Its director in Singapore was quoted saying the brand has seen an increase in customers looking for sustainable products.
“People are looking for small replacements like a disposable cup or a bamboo straw,” said Mayur Singh, co-founder of Coopita, a retail platform that trades regional artisanal products, and The Green Collective, a pop-up store that offers a mix of sustainable products from various brands.
Another trend that has impacted the FMCG market is the rise of the health conscience in Singapore. The city state is set to become the first in the world to introduce a ban on ads of high sugar packaged drinks in 2020.
Singaporeans are becoming increasingly conscious not only about what they put in their bodies but also what they put on them as well, which has resulted in increased demand for personal care products made with natural ingredients. In most categories, according to Nielsen, the natural and botanic segment is growing ahead of its non-natural counterparts.
New tech drives innovation and convenience
The relatively young population in Singapore and the high digital connectivity has spurned the demand for convenience. In a global Nielsen survey, 64% say their lives are getting busier and many are turning to technology to provide solutions needed to simplify their lives.
In the same study, consumers listed augmented and virtual Reality as the top technology they are seeking to assist and improve their daily lives. More than half (51%) were willing to use this technology to assess products. According to the report, these technologies will transform brand engagement and will “clearly be a disruptor”.
Furthermore, instant gratification is the norm these days, which has in turn led to turnaround times being reduced significantly to as fast as same-day deliveries. This means companies now need to provide more options and flexibility to consumers. This can be achieved via multiple touch points (online and offline stores), as well as a comprehensive omni-channel backend fulfilment value chain.
And what is the general health report on the FMCG market in Singapore? In Nielsen Singapore’s latest FMCG Trends Q4 2018 report, Singapore’s total FMCG size contracted by 0.5%. “Coupled with lower footfall and increasing overheads, the heat is on for brands and retailers to contend for a share in the retail landscape. E-commerce, in contrast, had an astounding 52% growth rate in 2018.
Supermarkets, however, saw sales growth of 0.3%, and convenience stores by 1.5%. These pockets of growth might seem relatively small, but they remain untapped, said the report.
“Businesses should optimise their offerings to various channels,” said Raymond Cheung, executive director of retailer vertical at Nielsen Singapore.
On the recruitment front, there are many opportunities for professionals in the industry come 2020.
According to our latest Salary Benchmark report, the demand is high for talent experienced in disruptive technologies and agile business models, specifically those with expertise in the digital space, transformational and multi-dimensional functions. Furthermore, with more companies setting up consumer insights team to gather analytics about consumer behaviour, marketing efforts in the future will lean heavier towards a more targeted, personalised approach. Professionals with related experiences will enjoy a leg up in that regard.
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 FMCG industry. This article is part of our Market Movers series, which attempts to highlight various industry segments across specific markets.
- Ready for a financial revolution
- Creating a thriving legal hub
- Retail is set and ready for a comeback
- FMCG in the age of affluence
- From smart nation to tech giant
Visit Market Movers now for even greater insights.