Local brands in Singapore have been hit hard by the COVID-19 pandemic, experiencing double-digit negative growth, according to a new report by the Singapore Tourism Board (STB) and Visa.
Consumer spending has fallen by 14% due to the lack of foreign visitors and change in shopping preferences among locals. This encompasses home-grown retail brands - observed in VisaNet data - with sub-categories ranging from fashion apparel, jewellery & accessories, leather goods & bags, shoes, accessories, watches, departmental stores, souvenirs, food and confectionery.
The lack of online presence has also left local brands increasingly vulnerable, especially those located in tourism precincts. Less than S$2 per S$100 of goods sold by local brands were transacted online, which is lower than the normal retail average.
In Singapore, the consumer shift in preference towards online platforms is shown by the significantly larger year-on-year growth in online spend across the top five merchant categories, compared to face-to-face spend.
This disparity was particularly pronounced for consumer spend at restaurants (181% YoY growth for online spend, 8% YoY drop for face-to-face spend), healthcare services (31% YoY growth for online spend, 4% YoY drop for face-to-face spend) and entertainment services (27% YoY growth for online spend, 12% YoY drop for face-to-face spend).
In addition, over four in five consumers in Asia Pacific also intend to continue or make more purchases online (85%), while less than two in five intend to revert to pre-pandemic patterns of purchasing in-store. The report found that 85% of Singaporean consumers intend to continue or increase their online purchases. There is significant growth in online spend across the top five merchant categories, including restaurant, commercial, healthcare, entertainment and retail. Consumers’ online spend was particularly pronounced in the restaurant category.
These new online habits have fuelled a shift towards online platforms and will likely remain post-pandemic to become the “new normal”.
The study’s release coincides with a three-year Memorandum of Understanding (MoU) between Visa and STB to address the needs of Singapore’s tourism and lifestyle small and medium-sized enterprises (SMEs) impacted by COVID-19.
The collaboration focuses on two strategic areas to revive the local tourism industry – joint research and analytics and marketing partnerships. To launch the first phase in October 2020, both organisations will harness the synergies of their respective campaigns – #SingapoRediscovers and #WhereYouShopMatters – to encourage Singaporeans to shop at local retailers and support the domestic economy.
“Local tourism and lifestyle businesses contribute significantly to the vibrancy of a city like Singapore. We recognise that many of them, especially the smaller and medium-sized ones, are especially vulnerable. We hope to help them develop new digital capabilities and transform their businesses. Through our partnership with Visa, we also aim to give local businesses a much-needed boost through domestic spending,” said STB chief executive Keith Tan.
Sourced from Visa, STB