After a quick recovery from Covid-19 in 2020, Singapore’s retail sector is forecast to continue normalised growth until 2026, as the Southeast Asian nation sees a return in air travel and tourism, and hosts major international events such as the F1 Grand Prix.
The overall retail sector in Singapore grew at a CAGR of 2.9 percent between 2015 and 2022, with online sales growing at a CAGR of 18.5 percent, with spending reaching SGD 4.5 billion (USD 3.5 billion), according to GlobalData’s ‘Retail Trends: Observations on Singapore’ report.
Moreover, Singapore is a market leader when it comes to omnichannel spending, with omnichannel accounting for 57.6 percent of retail spend in 2022.
Despite Singapore being a small, densely-populated city with many physical stores located within walking distance, consumers continue to browse online to get updates on new and unknown products, to be inspired, and for fun. Interestingly, Singaporean shoppers are less likely to use a mobile during their in-store shopping experience, compared to other Southeast Asian shoppers, the report added.
Looking ahead, omnichannel spending in Singapore will rise a further 21.2 percent between 2022 and 2026, meaning if brands are to make the most of Singapore’s tech-savvy shopper, they need to be thinking about omnichannel retail.
Singapore’s omnichannel shopper
Around 50 percent of Singaporean consumers prefer online for checking and comparing prices, while 49 percent prefer physical stores for purchasing products, according to the GlobalData report, while some 48 percent of consumers plan to browse products online before buying in stores more in the future, compared to 44 percent, who plan to seek advice or service in stores before buying online.
Singaporeans are increasingly integrating online with offline while they shop, with each channel offering different benefits, meaning no separate online and offline retail sectors, but rather a single sector that is rapidly digitising, according to GlobalData.
Since 2019, omnichannel spend has increased 20 percent and by 2026, it will make up over 61.7 percent of total retail revenue, as brands invest in integrated omnichannel strategies to consolidate hybrid, seamless shopping journeys in-store and online, added the report.
The omnichannel shift comes as Singapore continues to establish itself as major e-commerce hub. It’s also a market that has undergone a dramatic transformation in recent years, with the increase in mobile devices and broadband connectivity driving a boom in online shopping.
However, online growth rates are normalising as consumers embrace a return to traditional brick-and-mortar stores. In 2022, online penetration reached 10.7 percent, up 0.6 percentage points on 2021, said GlobalData.
“Shoppers will continue to switch between online and in-store channels as they welcome increasingly hybrid purchase journeys,” said GlobalData report authors.
“These changing dynamics will require businesses to integrate their omnichannel offerings to meet consumer needs, instead of focusing solely on ecommerce growth.”
Singapore’s savvy shopper
The penchant for omnichannel shopping is indicative of Singapore’s savvy shopper. According to GlobalData, some 68 percent of consumers in Singapore look online and in stores to find which is the cheapest, while 48 percent browse products online first and then go to stores to buy them.
Around 65.4 percent of shoppers in Singapore visit multiple online retailers before deciding where to purchase, with Singaporeans visiting 5.4 online retailers on average before deciding where to buy, according to the report.
Meanwhile, some 57 percent of consumers in Singapore look at online reviews and comparison sites before buying in stores, meaning retailers must offer a good shopping experience and strong customer service to maintain a positive brand image.
Shoppers in Singapore are also less likely than their peers in Southeast Asia to use a mobile during their in-store shopping journey; 39 percent of Singaporean consumers check the prices of products on a mobile while shopping in physical stores or just before or after shopping, compared to 53.1 percent in Malaysia and 52.6 percent in Thailand, the report added.
Singapore’s big-on-beauty shopper
Singapore’s retail spend will grow 13 percent from 2022 through 2026. Of that, beauty will be the fastest-growing category in Singapore between 2022 and 2026, growing 19 percent, with double-digit growth both in-stores and online, according to GlobalData.
Growth in the beauty category dwindled in 2020 as consumers adjusted to life at home. However, the closure of non-essential outlets such as nails and hair salons encouraged purchasing of self-care items and helped to keep the sector afloat.
Looking ahead, in-store sales of beauty products will make up more than 90 percent of total beauty retail sales in Singapore in the next three years, with online making up just 4 to 5 percent, added GlobalData.