TROUBLE IN (SHOPPER’S) PARADISE: HOW SINGAPORE MALLS RETHOUGHT THE RETAIL EXPERIENCE *Sourth China Morning Post (14/08/2017)
As e-commerce giants put the squeeze on brick-and-mortar shops in the Lion City’s malls, savvy operators are rethinking the world of retail by offering food, drink ... and experiences... by Pearl Lee
|After years buying clothes online, Singapore civil servant Olivia Chin brought internet shopping closer to home – she furnished her flat almost entirely from Taobao, China’s biggest e-commerce platform. She bought a coffee table, dining table, sofa, television console, bar stools and lights. Instead of paying S$2,000 (HK$11,460) for a dining table in Singapore, the 25-year-old found it for S$500 online. Shipping charges from China to Singapore were S$2.99.|
|“I also bought bar stools at S$10 each on the
site, while shops here were selling them at about S$100,” she said.
“I was concerned about the quality at the start, but that was mitigated by the low prices."
More and more Singaporeans are shopping like her – with clicks of a mouse rather than heels.
For a country that once called itself the Shopper’s Paradise, e-commerce is turning life for brick and mortar shops into a slowing retail hell.
|Even the annual Great Singapore Sale, which
targets tourists and has been running for 24 years, cannot forestall
The event has recorded three consecutive years of decline in retail sales, while local media has mocked it as being “not so great any more”.
|Singapore has felt the disruptive
power of online shopping more severely than other Southeast Asian
Some of the world’s biggest e-commerce players have targeted the country, due to its location as a gateway to the lucrative Asean market and the buying power of its affluent population.
Lazada and Taobao are replacing previous household brands like Isetan and Metro. And last month, the Goliath of online shopping Amazon landed on the island.
Amazon Prime Now, which promises delivery within two hours free of charge, was so popular that the American company resorted to booking taxis and recruiting freelance drivers to fulfil deliveries.
|Experts say the slow death of physical retail
is inevitable, even in a tiny city where travelling 30 minutes by
car is considered by many to be a long ride.
Younger and more savvy shoppers buy their shirts, shoes and even shoulder ham online.
A study by Google and Temasek International valued Singapore’s e-commerce market at US$1 billion, with online shopping making up just 2.1 per cent of retail sales in 2015.
This was projected to soar to US$5.4 billion by 2025.
This is putting
pressure on many malls, with rents falling and vacancies rising, a
trend that is affecting all except the most popular of shopping
|That does not mean Singaporeans are avoiding malls. Given the sweltering tropical heat, seeking refuge in air-conditioned malls remains a national pastime.|
“They eat, they
drink but they don’t buy anything,” said Madam Woo, who works at
fashion store Le Pommier in Clarke Quay Central, along the Singapore
Part of the reason
is these malls are quickly adapting to the new realities,
drastically changing the retail experience in the process, said
|Another strategy that malls have
turned to is filling space with food and beverage outlets, said
CBRE’s head of research for Singapore and Southeast Asia Desmond
Sim. These businesses used to take up about 20 per cent of a typical
mall’s tenant mix, but the figure is now nearer double this in some
“Eateries are low-hanging fruit for malls – they fill up the vacant spaces and go some way in helping to draw crowds as most activities in Singapore revolve around eating,” said Sim.
To fill space, malls are also turning to short-term rentals such as pop-up shops.
This has led to an increase in such concepts in downtown malls like Suntec City and Orchard Gateway.
|Multi-label lifestyle shop Naiise,
which began with an online site in 2013, now has five physical
stores across the island, all of which began with short-term leases
of six months to a year.
The company’s founder Dennis Tay, 32, said mall operators were more open to discussing short-term leases as traditional retailers shut up shop.
|But not all retail businesses are
giving up. Singapore’s Changi Airport is even building a new mall,
called Jewel, to maintain its leading status when the shopping
centre opens in 2019.
Others take on their rivals online, opening virtual storefronts to complement their physical presence.
Tech retailer Challenger, which has 38 outlets, launched its e-commerce store last year.
|New Econ Holdings, which oversees
13 minimarts, is exploring how microretailers can embrace digital
transformation by integrating online and offline sales approaches.
They want customers to buy online and pick their purchases up at the store, or have them delivered at a specific time slot. This works because many of the minimarts are located in public housing estates.
“To survive in this climate, we need to get online too and offer customers multiple ways of reaching us. At the same time, we must play up the aspects that online shopping cannot offer, such as the in-store experience and the human touch,” said minimart owner Kelvin Tan, 32, who is driving the change.
|Asked if he thought the death of retail was
inevitable, he demurred.
“People still enjoy coming into a store and talking to a person,” he said.
“They still want that offline presence. And it remains to be seen how shoppers here will behave when online stores reach saturation point.”
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