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More global retailers in the mid-tier and luxury segments are venturing across the Asia Pacific (APAC) region due to its huge population and flourishing economy, according to the latest report from JLL.
In fact, the region makes up 36 percent of the global economy and 54 percent of the world’s population. The former is also expected to grow to 40 percent by 2020, at a pace about twice as fast as the rest of the world.
Asia Pacific is also home for around 33 percent of world’s middle class, and this is forecasted to climb to 46 percent in 2020. For retailers, this means more people would be able to afford items with higher prices.
JLL also noted that the region’s tourism industry is booming. Based on figures from the United Nations World Tourism Organisation, APAC recorded 248 million international visitors last year, up six percent from 2012 and comprising nearly 25 percent of the world’s total.
As such, Singapore continues to attract international retailers, emerging as the third most popular destination for mid-tier and luxury brands in the region.
The city-state ranked third in the region, just after Hong Kong and Shanghai, in term of international retail presence, and is cited as a sought-after location for retailers.
According to JLL, “Singapore also benefits from few barriers to entry, which allows international brands to directly operate stores.”
“[Singapore’s] strong supply chains also enable them to provide a wide product offering that can be refreshed on a regular basis, and to constantly change and update their offer to reflect the latest trends – a key consideration in today’s retail landscape,” JLL added.
International retailers aided by JLL in expanding into Singapore during late-2014 include Jack Wills which established its first and flagship store at Raffles City Shopping, while Ben’s Cookies opened its first store in Singapore at the basement of Wisma Atria. Finally, Vilebrequin and Boggi Milano set up their first and flagship stores at Marina Bay Sands.
Looking ahead, the influx of international retails into Singapore is expected to continue, said JLL Singapore’s Director of Retail Tom Hamilton, noting that they will prefer retail spaces in the best strategic locations so that they can reach their target market.
“For existing in country brands, due to falling tourist arrivals, increasing e-commerce growth and continued difficulties with foreign worker policy, we expect a continued slow-down in take up of weaker locations with many existing retailers reigning in expansion strategies along with potential consolidation of store numbers,” he added.
Meanwhile, Hong Kong and Shanghai respectively bagged the 1st and 2nd spot at JLL’s rankings as they have a stronger presence of international retailers, while Kuala Lumpur in Malaysia was ranked 9th.
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this and other stories, email nikki@propertyguru.com.sg
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