Singapore companies banking on spending power of Chinese millennials | Zebelle Pte Ltd

Singapore companies banking on spending power of Chinese millennials

HSBC has released its first-ever “Navigator: Made for China report”, which polled 1,205 small and large companies from 11 key economies – including Singapore, Hong Kong, France and Mexico. For Singapore, 120 local businesses participated in the survey.

The report revealed that 49% of firms in Singapore saw China as a sales destination, with 69% out of this group indicating it as one of the most important locations. This is in spite of the cyclical slump in electronics and the current trade war between China and the US. Instead, almost two-thirds of the Singaporean companies viewed regional trade pacts (i.e. the ASEAN-China Free Trade Area and the Regional Comprehensive Economic Partnership) as beneficial to them.

Additionally, over 80% of the Singapore businesses believed that the millennials in China will be the main drivers of future sales. Almost 50% opined that the fastest-growing industry will be technology services, followed by medical care and high-end intelligent equipment.

HSBC Singapore Chief Executive, Tony Cripps, said that while Singapore cannot afford to disregard “the cyclical downturn in electronics and current trade tensions…it seems like businesses are looking beyond these short-term headwinds to the structural macro-economic opportunity that China’s burgeoning tech-hungry millennial consumer can bring”.

For the past decade, China has been Singapore’s top investment destination, as well as the Republic’s biggest trading partner since 2013. Export growth from Singapore to China also rose 17% in 2017. However, official 2018 trade figures showed that while the Republic’s overall trade grew 8% year-on-year in September, exports to China declined by 17%.

On how they plan to growth their China exports, Singaporean firms shared that while price used to be an effective sales driver in the past, competing on price alone is no longer a sustainable strategy for the Chinese market. Nearly 50% of Singapore businesses believed in the new opportunities generated by China’s growing consumer wealth, and disclosed their plans to expand market share by offering new, superior products and services.

HSBC China Chief Executive, David Liao, explained that China’s “consumption is becoming more sophisticated and inclusive, as wealth spreads from urban centers to rural heartlands, bolstered by better-educated new generations who are both Web-savvy and worldly-wise”.

Source: The Straits Times

ImageSource: Pexels

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