From ION Orchard to The Shoppes at Marina Bay Sands, from Scotts Square to Tangs, and from Paragon to Ngee Ann City, not forgetting the shops and duty free stores at Changi airport, it’s almost a common place to simply refer to Singapore as a shopping destination.
With shopping as a significant entertainment, both fashionistas and shopaholics flock from one shopping mall to the other indulging, selecting and purchasing luxury goods from world-class brands.
Just name a brand, say Louis Vuitton, and 5 different stores, one more beautiful than the other, appear strategically positioned in 5 key Singapore shopping locations: Marina Bay, ION Orchard, DFS Scotts Walk, Takashimaya SC, and the Raffles Hotel Arcade.
And let’s not forget to mention the Louis Vuitton Island Maison, the brand’s first “Maison” concept in South-East Asia, which is set on a spectacular futuristic glass and steel structure floating like a ship on the water next to the Marina Bay Sands, and offers a shopping experience like no other, including a bookstore, an art gallery and a “travel room” showcasing travel luggage.
It’s not just simply selling but engaging the customer in an emotional journey because, yes, you do purchase luxury for the quality and design of the product, but, yes, you do purchase luxury because the specific brand that you are selecting says a lot about yourself and the rewarding experience you will enjoy with that specific brand is priceless.
Singapore is the key regional hub for Luxury in ASEAN, and a top hub in Asia-Pacific, with a market size in 2013 of €2.5 billion (ca. S$4.3 billion) compared to the ASEAN market size of €5.5 billion, and the Greater China market size of €27.4 billion which includes China, Hong Kong, Taiwan and Macau.
Despite the slowdown of the economy of the city-state, Singapore continue to showcase a strong spending power which remains very healthy among clients of luxury products.
Singapore GDP per capita at US$60,400 is the world’s 3rd highest (after Qatar and Luxembourg) and that facilitates why Singaporean consumers are among the best spenders on luxury goods.
But there is a significant contribution generated by foreign tourists, especially week-enders and visitors from neighboring Indonesia and Malaysia, and travellers from China who also happen to be the largest contributors for duty-free shopping at Changi airport, accounting for almost 25% of total sales, and with a spending growing at the rate of 25% year on year.
For the record Singaporeans accounted for a 20% of total duty-free sales at Changi airport, reporting an 11% increase year on year.
And Singapore incidentally ranks 5th in the 5 largest destination countries by value of tax free shopping value after France, Italy, UK, and Germany.
Singapore also maintains a leading Luxury position within the ASEAN region, where new markets like Indonesia and Malaysia, featuring a growing urban affluent middle class with an increasing disposable income, are emerging and becoming increasingly relevant, and where international luxury brands are now considering planning a more direct presence.
One growing feature in the Singapore luxury market is the emergence of niche luxury brands, which are not eroding mainstream luxury brands significantly, and are developing their own market share alluring discerning customers and also targeting a new younger urban segment.
Two examples in this category of niche luxury brands now available in Singapore come from Jo Malone and Laduree.
Jo Malone, the London-based upmarket fragrance brand that celebrates British style with unexpected fragrances, opened a standalone boutique at Takashimaya SC in March 2009.
The art of fragrance combining for which Jo Malone is famous for has become so popular in Singapore that blending spicy scents with a hint of floral note generates the even more famous “A-ha” moment that celebrates the perfect fragrance and confirms the success of a niche luxury brand.
Laduree, the Paris-based, patisserie established in 1862 and famous for its macaroons, has been a great success in Singapore since its arrival in April 2013.
With Laduree macaroons that do not come cheap in Singapore, at S$3.80 per piece, on opening day at their boutique and counter at Takashimaya SC, a staggering 650 customers were served, truly breaking the world record in the number of patrons queuing up at the opening of a Ladurée store.
And their salted caramel, rose petal, pistachio and vanilla flavors have soon become the top most popular in the Lion City.
Today’s Singapore is the world’s fastest growing wealth hub with US$1.3 trillion assets under management, and soon it will take the place of Switzerland as the world’s largest offshore wealth center.
With the highest number of millionaires per capita in the world (about 1 in every 30 Singaporeans is a dollar millionaire, and 3,870 are multimillionaires with net worth exceeding US$30 million), Singapore is a natural magnet for luxury.
In Real Estate, the well-known China’s wealth creation has been eyeing Singapore for quite some time now, and much of this wealth is headed in investing in the island-state’s luxury and high-end residential properties.
Property market showcases outstanding luxury residential condos that rise the benchmark of amenities, facilities, fittings and details, attracting internationally-acclaimed architects in designing the utmost condo, and collecting international awards.
Amid the very many, these 3 condos well represent a great leap forward in setting the new frontier of luxury residential properties in Singapore:
- Deconstructivist archi-star Daniel Libeskind designed Reflections at Keppel Bay, a residential development comprised of 6 high-rise towers and 11 low-rise villa apartment blocks and conceived it as a gate to Singapore’s historic Keppel Harbor.
- Hamilton Scotts is “one of Singapore’s most coveted address only a select few can ever call home” and offers the extra feature of an en-suite sky garage.
- The Marina Bay Suites earned the title of Best Luxury Condo in South-East Asia in 2013.
Another relevant aspect of Luxury Singapore is Luxury hospitality.
15,466,000 international travellers visited Singapore in 2013, a +6.7% compared to previous year, and local attractions, conventions and events acted as catalyst for the decision of selecting Singapore as travel destination.
Luxury hotels in Singapore recorded an average occupancy rate of 88% per the Jan-Dec 2013 period, with a peak at 92% during the month of August, a standard average room rate of S$437, and a revenue per available room (RevPAR) of S$385.10.
Demand for luxury hotels stayed strong and above standard average occupancy rate of all Singapore hotels, with the luxury segment on the rise and welcoming new properties:
- Sofitel So Singapore will open in May 2014 as a 134-room top luxury boutique hotel designed by legendary Karl Lagerfeld, blending timeless French elegance with a chic Singaporean twist, housed in an iconic building with neo-classical façade in Singapore’s CBD, and expected to become the next sanctuary for discerning travellers.
- The Westin Singapore, a Starwood high-end modern design brand whose motto is “For a Better You”, opened in November 2013 right in the heart of the CBD, occupying levels 32 to 46 of the Asia Square Tower 2 and featuring 305 rooms and suites.
An essential component of Luxury hospitality, fine dining experienced a surge of new openings thanks to celebrity chefs and internationally-acclaimed brands who elected Singapore as home for their
After Mario Batali, Daniel Boulud and 3-star Michelin chef Guy Savoy landed in Singapore redefining Italian, French and American cuisine with their restaurants at the Marina Bay Sands, namely Osteria Mozza, DB Bistro Moderne, and Guy Savoy, and Joel robuchon opened his L’Atelier at Resorts World Sentosa, British chef Jamie Oliver opened his Jamie’s Italian restaurant, the first in Asia, at VivoCity in July 2013, and thus emphasizing Singapore’s position as a premier fine dining destination in Asia.
Gourmet New York food store Dean & DeLuca landed in Singapore, its second outpost in Asia after Bangkok, and opened 2 outlets in 2013 at Orchard Central and Far East Square offering a wide array of gourmet delicacies and wines.
And on the sweet side, American donuts makers Krispy Kreme Doughnuts opened in July 2013 at Tangs eventually bringing the deliciousness of its sugar glazed donuts to Singapore after already operating in several other markets in Asia, from Indonesia to Japan.
As an ending note, Singapore is truly a shining beacon in Luxury Asia, and enjoys a premier position in today’s highly competitive landscape.
A success fueled by the perfect match between captivating iconic luxury brands entering the Singapore market and a growing demand for luxury products and services generated by both local customers and foreign visitors.
Confident of its competitive edge, Singapore will be able to maintain this leadership position in Luxury Asia and continue its path in pursuit of excellence by nurturing stability, creativity, service thus attracting more brands and generating more demand.
It’s a win-win situation where brands are happy with their business results and buyers, customers and consumers are happy with being able to satisfy a new necessity.
At the very end “Luxury is a necessity that begins where necessity ends”, as Coco Chanel used to say in early 20th century, and this remains as true as ever today.
And Singapore is no exception.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.
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Antonio Acunzo is the CEO at MTW GROUP | Foreign Market Entry Advisors, a market-entry strategy and brand marketing advisory firm founded in Florida, and with Asia-Pacific office in Singapore. He brings with him over 15 years of experience in international business in the US and Asian markets focused on the Luxury and THL industries, and is a regular speaker at marketing and international business events.