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A Look at Economic Events in and Around Singapore

Every week we take a look at the latest news that is going on in or around Singapore. In today’s article, we’ll be taking a look at the growing trend amongst Singaporeans in the consumption of high-end products.

More high-end products please!

If you are a regular shopper in Singapore, it’s hard not to notice how Singaporeans seem to be turning increasingly toward higher-end and premium products. In fact, Chanel NewsAsia had recently reported on such a trend and cited a survey conducted by research firm Nielson which showed how the premium goods segment had experienced a growth rate of 16% compared to the previous year, pushing the segment to make up almost one-third of Singapore’s total consumer packaged goods sector. In particular, premium brand products were very popular amongst Singaporeans in the tech-space with smartphones and tablets.

Vishal Bali, a managing director at Nielsen, spoke to Chanel NewsAsia and provided some sound bites on the issue: “[W]hen [Singaporeans] travel abroad, they become aware of new brands, global brands, niche brands, and that also leads to an aspiration to consume brands that are really premium, or high-end products. This coupled with disposable income helps in driving this.”

A Fool’s take

If the trend toward premium, high-end products holds true, this could stand to be benefit companies that have a focus toward such brands. One such example could be The Hour Glass (SGX: E5P) a retailer and distributor for luxury premium watch brands like Patek Philippe, Cartier, Tag Heuer, and Omega amongst others. A company like Wing Tai (SGX: W05), which owns retail franchises for high-street fashion brands like Topshop, Uniqlo and G2000 might also see some tailwinds coming from such changing preferences in Singaporean shoppers.

Meanwhile, small local retailers would have work to do to differentiate themselves in this competitive landscape. Building of brand appeal, production differentiation and a focus on e-commerce strategies can help a company stand apart from the competition. In fact, Derrick Lim, a business development manager at local sports equipment retailer Transview Lifestyle Pte Ltd, had mentioned to Channels NewsAsia that with a strong e-commerce strategy, “Consumers are able to make a knowledgeable purchase, and for them to repeat the items they have already purchased, it’s a breeze compared to going to the shop itself.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor James Yeo doesn’t own shares in any companies mentioned.