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Course: Bachelor of Business Studies in Management (BBS)
Module: FIN2001S Economic Policy and The Global Environment
Assignment Title: Assignment 1
Submitted by: JIT SINGH KAIRON D
Student Number: 15210973
Lecturer: HEAN HOO WONG
Submission Date: 30th May 2016
Word Count:
Content
1. Introduction …………………………………………………………….. 3
2. Advantages to local community………….……………………………... 3-4
3. Negative economic impacts to local businesses………………………… 5-6
4. Government Interventions………….…………………………………… 7
5. Conclusion ……………………………………………………………… 8
6. References ……………………………………………………………… 9-11
7. Appendix ……………………………………………………………….. 12-13
- Introduction[a]
The retail industry here in Singapore has been experiencing a slower growth over the past year. This can be attributed to the softening global economy and the modest growth in Singapore’s economy. This change has resulted to local consumers cutting back on their spending and becoming thriftier. Tourists on the other hand were extra careful with their spending because of how strong the Singaporean dollar was compared to that of neighbouring countries (Euromonitor International, 2015). The retailers in Singapore are made up of mega retailers which comprises local or foreign retailers with a chain of retail stores and small retailers which is made up of traditional and independent stores. Retail sales increased 5.1% in March 2016 compared to March 2015. The value is estimated at a whopping $3.7 billion which is a notable contribution to Singapore’s economy (Statistics Singapore, 2016).
- Advantages to local community
Job opportunities
The influx of such retailers has opened up various opportunities for the local community. UNIQLO (Japanese casual wear designer, manufacturer and retailer) for example will be opening a Global Flagship Store here in Orchard Road, Singapore. Customers will enjoy a new product range and an abundance of variety. The opening of this store will create more than 300 jobs and it also offers its employment opportunities for people with disabilities a true dedication to its mission of making the world a better place (UNIQLO, 2016). Thus with the arrival of such retailers in the Singapore market, we can expect a much broader catalogue as well as several job openings.
Location and pricing
Location is also a factor that benefits the local community. Singaporeans generally go for what is convenient, this claim can be substantiated by the example of Carrefour. Carrefour’s lifecycle was short lived as it exited the market in 2012. One of the main reason for the departure was because of its location. It had two large stores located in central downtown locations. However, they did not have the customer base as the Singapore consumers did not patronize them. This was because it was inconveniently located which incurred high travelling costs, longer travelling time, higher parking fees and traffic congestion. The consumers would rather patronize mega retail grocers like Giant hypermarket and Cold Storage which are usually located a stone’s throw away from residential estates. On top of the prime location, these grocers also offer competitive prices by incurring low sourcing costs and efficient operations (Krishnan, 2012).
Economic growth
Singapore’s metropolitan retail sector sculpts the climate in which Singaporeans live and work in. The retail sector generated $34.5 billion in sales during 2013. Singapore is ranked one of the world’s top 20 cities to have a bulk of international retailers in their retail sector. This influx has helped add to Singapore’s economy as well as establish market presence amongst the locals (Spring Singapore, 2016). Tourism too has a huge impact to retail sales which add to the local economy. Singapore is one of the world’s third most attractive retailers’ destination (Tang, 2015). Orchard road for example is a prime example of how the variety of foreign posh mega retailers like Gucci, Topshop and Rolex congregate in one location here in Singapore becoming a tourist hotspot for them to get their shopping done. With the tourist arrivals, come the spending. For 2016 Singapore Tourism Board (STB) predicts a visitor arrival growth of up to 3% that amounts to around 15.7 million tourists. STB also expects tourism receipts to grow by about 2% to be in the range of $22 billion to $24 billion the expenditure patterns showed that 27% of every tourist dollar was spent on Shopping that amounted to $23 billion in tourism receipts in 2012 (Lin, 2016).