2 in 5 think that China's growing consumer wealth could unveil opportunities.
About 49% of Singapore firms revealed that China is their sales destination with 69% of said companies noting that it is amongst their most important destination, a study by HSBC revealed.
According to the study, Singapore firms think that 51% of Chinese customers are price-focused. Moreover, 46% of those who are already exporting thinks that China’s growing consumer wealth will create opportunities with 41% saying they are focused on delivering new products and services.
Amongst the aspirant exporters, 41% say creating superior products will drive sales.
“China isn’t just about ‘Crazy Rich Asians’,” HSBC China CEO David Liao said. “Indeed, less recognised is how consumption is becoming more sophisticated and inclusive, as wealth spreads from urban centres to rural heartlands, bolstered by better-educated new generations who are both Web-savvy and worldly-wise.”
The study also found that more than 80% of Singapore corporates see millennials as the driver of future sales. Nearly half (48%) think that technology will be the fastest growing industry followed by medical care (28%) and high-end intelligent equipment (25%).
“As an open and trade-dependent economy such as Singapore, the cyclical downturn in electronics and current trade tensions cannot be ignored,” HSBC Singapore CEO Tony Cripps said. “But it seems like businesses are looking beyond these short-term headwinds to the structural macroeconomic opportunity that China’s burgeoning tech-hungry millennial consumer can bring.”
In terms of trade pacts, 63% of Singapore businesses think that the ASEAN–China Free Trade Area (ACFTA) is likely to boost their businesses in China. Meanwhile, nearly half (47%) is positive on the impact of the Regional Comprehensive Economic Partnership (RCEP) to their enterprises.
However, said firms deem bilateral agreements between Singapore and China are deemed to be less important with only 37% acknowledging its importance.
“This sentiment may change with Singapore and China expecting to upgrade their existing free trade agreement by the end of 2018,” the report noted.
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