The not-so-Great Singapore Sale: Mainland shoppers say Hong Kong is better value

The not-so-Great Singapore Sale: Mainland shoppers say Hong Kong is better value

Mainland Chinese shoppers discover how a strong dollar, labour costs and a sales tax in the city state mean it’s cheaper to go to Hong Kong
Bloomberg in Singapore

“We will never come here again to shop on purpose,” said Zhu, a 35-year-old businessman from Hangzhou. Visiting the city during the final days of the summer sale season in July, he bought a Loewe handbag for his wife, only to discover he could have paid less in Hong Kong.

Behind the mark-up: a strengthening exchange rate, rising labour costs and a sales tax mainland tourists do not encounter in neighbouring Hong Kong. A reduction in visitors from Asia’s largest economy contributed to a sales slide of as much as 4 per cent in Singapore’s annual shopping festival, according to the retailers’ association.

Visitors from China to Singapore dropped 27 per cent in the five months to May from a year earlier amid slower economic growth on the mainland and the impact of a new Chinese law that clamped down on cut-price shopping tours. Total tourist arrivals declined 1.7 per cent, according to the Singapore Tourism Board.

Singapore’s retailers, already facing growing regional competition, are under the most pressure since the Asian financial crisis, Singapore Retailers Association honorary treasurer Kesri Singh Kapur said.

“It is that grim,” Kapur said. “Both sides of consumption, which are the domestic customers and tourists, are not spending. I anticipate that at least for the next 12 months, the market will be sluggish.”

While Beijing’s anti-corruption campaign against extravagant spending by government officials and state-owned companies has also dampened spending on the mainland and in Hong Kong, retailers in Singapore are grappling with the threat of a broader decline in appeal.

Singapore’s average retail sales growth dwindled to less than 1 per cent in the two years to May, according to government data that excludes motor vehicles. In Hong Kong, the average was 6.9 per cent in the 24 months to June.

Singapore has seen its currency strengthen about 3 per cent against mainland China’s yuan in the past year, the most after the Korean won among major Asian currencies. The Hong Kong dollar has gained 0.9 per cent.

“If we change our renminbi to Hong Kong dollar, it seems like we have a huge amount of money. With Singapore dollar, you just feel like it is a little money,” Zhu said as he walked empty handed out of the Paragon mall on Orchard Road with his family. Singapore retail goods are about 10 per cent more expensive than in Hong Kong, he said.

Singapore imposes a 7 per cent goods and services tax. While tourists can claim back part of that on departure, “there is still a differential of 2 to 3 per cent“, said Kapur, who is also Asia head of Dubai-based Al-Futtaim Group, the operator of retail chains such as Royal Sporting House, Marks & Spencer and Robinsons department store in Singapore.

International tourists including those from China, Indonesia and India account for at least 20 per cent of Singapore retail sales, with Chinese accounting for about half of that, Kapur estimates.

Tourism Board data show Chinese visitors spent S$800 million (HK$4.97 billion) in Singapore in the first quarter, of which almost half was on shopping.

Retail brands have expanded into other markets in China, Indonesia and Malaysia, making Singapore a less unique shopping destination, said Kapur.

Orchard rd

“Singapore had this aura and advantage of being slightly different from its neighbours” five or 10 years back, he said. “Yes we have a great Orchard Road, we have a great environment where people can walk and shop, but availability of brands has come at parity now.”

PUBLISHED : Tuesday, 05 August, 2014, 3:25am
UPDATED : Tuesday, 05 August, 2014, 4:18pm

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Robert Chaen

Global CEO-Founder of ChangeU and Movsha Movers & Shakers, Hero-CEO Whisperer, Writer, The #1 Alpha Change Expert, Father of Asian FireWalking Robert Chaen is an International Keynote Speaker, writer, researcher, and corp games designer. He is famously known to be the “Hero-CEO Whisperer”, 1-on1 coaching with many CEOs and Celebrities for corporate strategies, staff & office political issues, personal branding, and even public figure OSHA safety drilling called Drager Defense. He has transformed CEOs and managers in Coca-Cola China, TVB Hong Kong, Cathay Pacific, Hong Kong Airport Services, VADS, TM, Public Bank, Auditor General's Office Maldives, etc. He is the prolific creator and online Author of innovative management tools such as DragonCEO, Diamond Leader, Papillon Personal Effectiveness, OSHA Drager Defense, KPI Bank, etc. He is also the Founder of Movsha, an international networking with monthly mingles with MOVers & SHAkers, Angels, Entrepreneurs, CEOs, Celebrities, HR-PR-CSR, HODs, and the Most Influential IDEA people. ​Chaen is widely considered as one of the top International Platform Keynote Speakers for Resorts World Genting Senior Management Conference (Manila), 7-Eleven HK, Samsung, Coca-Cola China Mini-MBA @Tsing Hua University, Cathay Pacific, Hong Kong Jockey Club, The Story Conference where he interviewed Datuk Kamarudin (Chairman of AirAsia) and Siti Nurhaliza. He has been widely featured in TVB, AWSJ, CNBC, SCMP, The Star, and Sin Chew. As “The Father of Asian FireWalking”, he coached TVB celebrities (Ekin Cheng Yee-Kin) to walk on 650°C fire; and raised HK$68M in the world’s 1st and only live TV Charity FireWalk (TVB Tung Wah Charity Show), before Tony Robbins even came to Asia. If Robert can get you to walk on 650⁰C fire, he can inspire you to be THE BEST. He champions CN-HK-EU-US Tycoons to be philanthropic, and to be angel investors to support the next generation of Jack Mas, Steve Jobs, Richard Bransons, Steven Spielbergs, or Barrack Obamas. With some slick motivational speakers with fake doctorates out there, graduates often describe Robert to be "the most credible, empowering, truthful Coach" who believe in his graduates to believe in themselves. ​However, clients have described Robert as "The #1 Cool Badass Alpha Change Expert". He has the coolest first class stature, rapport and trust from clients. He will not hesitate to tell the badass truth ever so gently because clients are paying him big bucks to reveal the truth, find solutions, persuade the hostile HODs, and align cross-teams within the organization. Originally based in Hong Kong for 20+ years, he had worked with top Branding/Ad agencies at J Walter Thompson and Leo Burnett, and was a certified FranklinCovey (7 Habits) in USA, and NLP MasterCoach (USA). His warmth is known to soften the most hardened, resistant sceptics. He will inspire your team to Go for Top 1, or to be a Dragon CEO. With boundless energies, Robert owns 15+ successful business Joint-Ventures, and created unique products under his global VC network called Chaen's Angels VC. He is deeply passionate about ChangeUTH Youth CSR, Science-Based Medicine (vs. quackery), short films and Reality TV. Touched by a personal tragedy through the loss of his HK-born Portuguese wife, co-coach and business partner, Brenda José of 18 years, Robert explores the many ways in which the spirit world is communicating with the living with real scientific studies and evidence. He gives inspiring conferences on The Secret Afterlife.

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