Singapore Retail Sector - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The retail sector is one of the largest in Singapore which has been delivering constant growth during the study period. Though the global COVID-19 pandemic has restricted the market from registering growth during 2020 to a great extent, owing to the comparatively higher market of e-commerce retailing in the country, the market recorded a moderate growth rate in 2020. High yielding market segments including food and beverages, cosmetics, apparel and footwear, accessories, furniture, have recorded a sudden drop in revenues during the second quarter of 2020, which was the highest drop during the study period. Food retailers recorded a sales drop of 47.4% year on year which is the largest for the segment in the market. Similarly, furniture and household appliances recorded a drop of around 19% for the second quarter in 2020.

As the retail landscape transformed with the COVID-19 outbreak, it has become increasingly important for retailers to adapt to multiple sales channels. The trend of more consumers going for e-commerce platforms to purchase several important goods and services has increased in the country which is fuelled by the closure of many physical retailing spaces and brick-and-mortar stores due to the safety measures. With the rising number of businesses going to switch to the e-commerce channel, the Singaporean government introduced the Digital Resilience Bonus under the SMEs Go Digital programme to encourage more businesses to digitalise. This includes a payout of up to SGD 5,000 for eligible businesses should PayNow Corporate and e-invoicing, and business process or e-commerce solutions be adopted.

Key Market Trends

Upgrading Technology is Helping the Market to Record More Revenues

The improving technology is helping the retail market to expand to new dimensions and touch more niche end-user segments with their product offerings. The adoption of Augment Reality (AR) and Virtual Reality (VR) is attracting the millennials who account for more of total retail spending. The manufacturers who started using AR and VR are also expanding their strategies to engage millennial shoppers in order to enhance in-store experiences. According to a survey which was conducted during the third quarter of 2019, more than 45% of retailers cited their plans to deploy AR - VR solutions by 2020 and are in the process of improving their customer service in the retail sector.

Constant Growth Rate of Apparel, Footwear and Accessories Segment is Helping the Market to Record More Revenues

Singapore customers have been spending consciously on certain product segments including electronics and household products, apparel, footwear, accessories, furniture among others owing to the slowing economic growth of the country. The retail sales index of Apparel, Footwear, and Accessories increased by 5.6% y-o-y in November 2019, while Furniture, Household goods declined by 8.6% y-o-y. Demand for furniture and household goods eased due to fewer residential transactions. Business expectations for the retail sector from October 2019 to March 2020 were less optimistic compared to that a year ago. Although sales in the food & beverage are envisaged to pick up during year-end due to festivities, consumers remained cautious amid the uncertain times which are fuelled by the COVID-19 pandemic.

Competitive Landscape

The report covers major players operating in the Singapore retail sector. In terms of market share, few of the major players currently dominate the market. The organized retail market has been growing significantly with companies expanding stores and considering the business potential in new areas. Most of the unorganized retail outlets are increasingly being replaced with big retail hypermarkets, supermarkets, and other retail chains. This is expected to continue on a large scale during the forecast period, which will significantly lead to market growth.

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