Overview of Singapore Economy and Franchise Industry
At a Glance
Singapore's economy is expected to grow by around 3.5% in 2014 aided by healthy domestic demand and a strong services sector. Economic growth is expected to gather momentum from 2015 to 2018 as external demand strengthens.
Singapore is an open friendly economy. For the 9th continuous year the World Bank ranked Singapore #1 for ease of doing business. It is a forward country with solid supply chains and a developed infrastructure. The franchise industry is very well controlled and transparent so there are few regulatory hurdles compared to its Asian neighbours. Due to the trusted system there is a certain peace of mind when dealing with potential Singapore partners.
According to McKinsey, Singapore is ranked as the 4th most connected country in the world so offers a good hub for your regional headquarters and a springboard to expand across Asia. There are around 7,000 multinational corporations with more than half of them using Singapore as their regional headquarters. Know more here cake delivery singapore
Of 20 private economists surveyed by the Monetary Authority of Singapore (MAS) expected GDP growth for 2014 is 3.8% and this is forecast to increasingly grow over the next 5 years.
Despite comparatively slower Asian growth, retail sales were up 5.5% in July 2014 (Singapore Department of Statistics) and are forecast to increase by nearly 20% from 2014-2016 (PwC).
The food and beverage industry contributed approximately 3.2% to GDP in 2013 with Singapore having the highest per capita food consumption in Southeast Asia (Research and Markets). The retail and wholesale trade sector accounted for 16% of GDP, up 5% from the previous year; the financial services sector grew 10.6% and business services rose 5.1% (HKTDC). The service sector is by far the biggest employer and adds around 60% to GDP.
The government has a very global attitude and is reliant on global business and imported goods. There are a raft of global and regional free trade agreements with hardly any tariffs on most agri-food products. Franchise information (including financial incentives) can be found through the following government backed organisations:
SPRING-Standards, Productivity and Innovation Board.
International Enterprise (IE) Singapore.
Singapore has a very multi-cultural, globally aware population and is therefore a great test marketing location before committing to a regional launch. The population is small and predominately urban but has an enviably low unemployment rate. As a result, it is one of Asia's richest countries in terms of consumers, the level of per capita wealth is one of the highest in the region and has risen consistently over previous years.
The average monthly household income of Singaporeans rose from $8,110 in 2007/08 to $10,500 in 2012/13 with households spending an average of $4,720 a month on goods and services. Total consumer expenditure is forecast to grow by CAGR 5% from 2011-2016 and 36% of Singaporeans feel the next 12 months would be a good time to buy the things they need or want (Nielsen 2014).
Food is the 2nd biggest expenditure behind housing and, interestingly, private education accounts for a high percentage of spend-equivalent to university education expenditure (Singapore Department of Statistics).
Given the higher income, the average consumer is well traveled and is very brand savvy. They have a good level of sophistication and are very receptive to foreign products and services. The generally higher affluence means there is a less price resistant market-a useful point for premium brand companies to bear in mind.