Singapore Luxury Goods Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Singapore Luxury Goods Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Singapore luxury goods market is projected to register a CAGR of 4.64% during the forecast period (2022 - 2027).

With the onset of COVID-19, players realized the disadvantages of having only brick and mortar as the sales channel; thereby, they started to strategize and diversify their distribution channels. The majority of the players started developing their digital channels in an effort to reduce the buyer-seller gap.

Over the medium term, the rising growth for hard luxury goods in Singapore is supported by the new entrants of jewelry brands and rising sales of watches. Rapid urbanization coupled with increasing disposable income in the country is predicted to boost the customer base and prominent contributor to the revenue of the hard luxury goods market.

Some of the important factors which have fueled growth in the luxury goods market of Singapore include consumers demanding luxury goods from different backgrounds, rapidly changing consumer trends, the growth of boutique luxury brands, and the massive shift from physical to digital channels, shifting social attitudes towards the display of wealth and others are creating a new competitive landscape for the luxury goods market.

Moreover, apart from the aforementioned attributes, the advantage of being an international free port is another major factor that has encouraged the sales of luxury products in the country over the years. This has resulted in comparatively higher spending by tourists in Singapore relative to its neighbors. Owing to these factors, many premium international brands are looking forward to expand their investments and presence in Singapore. In May 2022, the high-jewellery brand Buccellati opened its first boutique in Singapore at the shops at Marina Bay Sands, that has brought over the best of Italian savoir-faire with its iconic High Jewellery pieces.

The emergence of e-commerce has provided consumers easy access to product-related information and prices through online sources. This has further contributed to the overall growth of the luxury goods market. Consumers in Singapore are highly conscious about their choices of luxury cosmetics and fragrances. Hence, the companies operating in the market are working to enhance their packaging styles that are sustainable.

Key Market TrendsIncreasing Tourism and Growing Cultural Iinfluence

Singapore is among the most visited countries in the world. The sustained growth of the luxury goods market can be attributed to the continuing rise in the tourism industry. The travelers visiting the countries are from high disposable income and often buy luxury goods from the outlets of various multinational brands. The country holds an economically strong market, and therefore, major multinational brands often launch their luxury products earlier in the country than many others. Travelers visiting from around the world are, attracted by the new luxury products, which they almost always purchase. Due to high disposable incomes, visitors from the neighboring countries often buy luxury products and take them back to their homes, where certain products may not be commonly available. The millennial group comprises most of the buyers. Tourists often come across things that Singapore is famous for, such as apparel, jewelry, and watch products. On the other hand, the increasing influence of culture and social pressure in the society, along with the growing wealth and super-rich population, who are willing to spend millions on luxury items, is driving the market for luxury goods in the country. Thus, the growing cultural influence and the rising tourism in the country is likely to grow at a healthy rate, posing significant opportunities for the players to introduce their products in the local market which will boost the luxury goods market.

Growing Penetration Through Online Channels

The online retail channel is emerging fast and is drawing huge attention from investors. Singapore has one of the highest internet penetration rates in the world at present. One of the main reasons behind online channel purchases is consumer comfort. The rapid growth was fueled by factors, such as improved product range, ease of buying, customer choice of the delivery date, and a smooth purchasing experience. Luxury fashion has developed itself in the digital world. Consumers now engage with most brands through their own branded online stores and multi-brand e-tailers. About half of the luxury goods buyers are now swayed by what they hear or watch on the internet. From Louis Vuitton to Chanel and Gucci, luxury fashion houses have been rushing to embrace digital, whether by partnerships with multi-brand sites, the creation of their own websites, or a combination of the two. For instance, in December 2020, Prada intensified its digital strategy by launching its new online shopping platform in Singapore. When browsing the site and e-commerce, customers can enjoy a shopping experience and an original exploration of the Prada universe. The shift to digital makes sense as online purchases are projected to fuel potential luxury goods demand growth.

Competitive Landscape

The Singapore luxury goods market is competitive with the presence of various players. Some of the major players in the market are The Swatch Group, LVMH, Rolex SA, Kering SA, and Richemont SA. Players are focusing on adopting strategic approaches such as mergers, expansion, product launches, acquisitions, and partnerships of the companies to gain market share and reach a large consumer base. Players in the market are diversifying their products by launching limited edition products to entice the customers and gain a competitive edge in the market. For instance, in December 2022, Breitling is known for supplying customized watches teamed up with Singapore Airlines to celebrate the 70th anniversary of the legendary Navitimer aviation watch with the launch of two limited edition watches named Navitimer B01 Chronograph 41 Singapore Airlines and Navitimer Automatic 38 Singapore Airlines.

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