Has Singapore Finally Become Too Expensive?
Photo courtesy of Thinkstock
Singapore has long been seen as a mecca for high-end shopping. Locals and tourists alike have miles and miles of malls and boutique-lined streets to wander through. Retail refugees from China, the Philippines, Indonesia and Malaysia come to the small city state because they can buy authentic Louis Vuitton, smell real Chanel and eat their fill of those famed Laduree macaroons.
Something unexpected has been happening more and more over the past couple of years. Foreign visitors have been coming to Singapore's shopping streets, but they have been keeping their wallets in their pockets.
A haven for luxury
Singapore has the world’s third highest per capita GDP, and locals do buy the pricey brands, but luxury boutiques still rely on tourist sales to make their profits and to justify the high cost of leasing or buying retail space in the heart of Singapore.
These boutiques want to be in the heart of the city. That means spending big bucks to get space along Orchard Road, which is the epicenter of Singapore’s tourism scene. According to the Singapore Business Review, up to 80 percent of all luxury items sold in the country are bought in the Orchard Road area.
Tourists are everywhere on Orchard, but most of them are opting to window shop instead of actually buying.
Indonesian travelers are usually in the country for other reasons: business, medical tourism or to visit relatives. Some may spend time at boutiques, but this is not the main reason that they are in Singapore. Australians, meanwhile, are stuck with a weakened currency, so shopping with Singapore Dollars is not financially feasible.
What about discounts?
Downtown shops have been experimenting with sales and promotions. Some of these are specifically aimed at getting tourists to make purchases. Coach is offering a 10 percent discount at its Orchard Road locations, but Singaporeans don’t qualify for the price break. To get the deal, shoppers have to show their passport to prove that they are foreign visitors.
Even this hasn’t worked. Tourist shopping statistics have held steady. Visiting buyers currently represent about 35 percent of the total sales for luxury items in Singapore.
Has Singapore simply become too expensive?
Yes, Singapore is expensive even if you don’t go there to add to your Vuitton bag collection. But it isn’t really fair to say that the luxury marketplace is struggling because country has become too expensive.
The biggest expense for most tourists in Singapore is their hotel. Rooms are expensive, and if you are staying in a central location, they can be extremely pricey. At the same time, you can always eat cheaply at hawker centers and get around easily via the awesomely useful public transportation system. Also, if you can escape from Orchard Road, you will find some reasonable (if not cheap) places to shop.
So while Singapore’s luxury brands are struggling, it is not quite right to say that the city is killing its tourism scene with high prices.
More by Josh Lew
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