Business and Market Overview on Singapore
ECONOMY. Singapore is the most advanced economy among the Southeast Asian countries with a GDP per capita of US$25,207 in 2004 which is comparable to many advanced economies in the European Union. Singapore lacks natural resources but is a regional hub for international trade, shipping and air transport. Many US, European and Japanese multinational companies have established Singapore as a regional office for their business operations.
Singapore’s GDP grew at an average of 2.7% annually from 2000 to 2004 to reach US$106.9 billion by 2004 while inflation remaining below 2.0%. Though Singapore’s economy is the most advanced among the Southeast Asian countries, unemployment increased from 1.8% during the Asian economic crisis of 1997 to 5.3% in 2004. To diversify and expand the country’s economy, the government is developing Singapore into a regional hub for finance and high technology.
The service sector accounted for 66.2% of Singapore’s GDP in 2004 while the manufacturing sector accounted for 33.7%. Agriculture plays a minimal role in Singapore’s economy and accounted only 0.1% of the country’s GDP. Major industries in Singapore include electronics, chemicals, financial services, petroleum refining, food processing, ship repair, offshore platform construction, biotechnology and entrepot trade.
DEMOGRAPHY. Singapore’s population of 4.2 million in 2004 is predominantly Chinese accounting for 77% of the population. Other ethnic communities include Malays (14%) and Indians (8%). Major religions practiced include Buddhism, Taoism, Hinduism, Christianity and Islam. The Chinese are generally agnostic, Buddhist, Tao or follow the Christian faith while Malays are mostly Muslims and Indians generally Hindus, Christian or Muslims. Main languages used are English (widely spoken and used in business and by the government), Chinese (mainly Mandarin and Hokkien), Malay and Tamil.
Singapore is a city-state and therefore nearly all its population live in an urban community. Most Singaporeans live in high-rise apartments or flats accounting for nearly 90% of the households while the remaining 10% live on landed property.
Singaporean consumers have the high level of disposable income compared to consumers in other Southeast Asian countries. High-income households account for nearly 27% of the total households while middle-income households account for 32%. Low-income households i.e. those earning than US$1,900 per month account for 41% of the total households.
INFRASTRUCTURE. Domestic and international telecommunication services are excellent and one of the best in the region. Internet broadband services are efficient and widely available. Singapore’s road system is efficiently managed and the city-state is well served by a public transport system. Singapore has efficiently managed seaports and airport which are used as regional hubs by many sea and air carriers.
INTERNATIONAL TRADE. Singapore has one of the busiest ports in the world and a regional hub for entrepot trade. Singapore’s major trading partners are Malaysia, US, Hong Kong, China, Japan, Taiwan, Thailand and South Korea. Many of the goods imported from and exported to Malaysia and Indonesia are re-exports from other countries. Major exports from the Singapore include electrical and electronic products, machineries and equipments, processed foods, consumer goods, chemicals and mineral fuels. Major imports include machineries and equipments, mineral fuels, chemicals and foods.
CONSUMER USAGE OF TECHNOLOGY. More than 90% of all homes have mobile phones putting the country on par with Sweden, Norway, Austria and Norway. Nearly all homes have at least a fixed-line telephone, television and refrigerator. The penetration of computers is also high with 70% of all homes having a computer and there are nearly 2.5 million internet users for a population of 4.3 million. Furthermore, there are more than 2.5 million credit cards in the county and online payments are well established. However, only 35% of all homes own a car due to the extremely high cost to own a car in Singapore.
RETAIL MARKET. Singapore has one of the highest standards of living in Asia after Japan and Singaporeans are keen shoppers. Estimated retail sales in Singapore in 2004 were US$11 billion. Unlike other countries in Southeast Asia, retail chains dominate over the industry by sales value. These include shopping malls, hypermarkets, supermarkets, department stores, convenience stores and speciality stores. Singapore has many established international retailers and brands attracting tourists from Southeast and Northeast Asia. Many shopping malls have also sprouted in the suburban areas existing side-by-side with the “mom and pop” establishments.
FOOD CULTURE. Singapore’s multi-ethnic communities has had influenced on Singapore’s food culture. Furthermore, Singaporeans are accustomed and often frequent various western and Japanese food service establishments including fast food outlets. Eating out is popular among Singaporeans and the current trend is to eat out rather than at home. Thus, Singaporeans spent 9% of their income on foods for cooking at home and 12% for eating out.