Southeast Asia is one of the fastest growing economic regions in the world right now and the sales opportunities in this region are incredible, says Cameron Gordon. Particularly if you can be successful in the major retail (supermarket) channels.
We have been working with Food and Beverage (F&B) exporters for the better part of ten years. During this time we’ve assisted dozens of major F&B brands prepare their Asia export strategy and expand their distribution throughout Southeast Asia, Hong Kong, Taiwan and Korea. Without doubt Singapore is at the heart of a winning Southeast Asia export strategy.
Spending power
The average salary in Singapore is USD54,530.00 per annum according to WorldData. This is the highest in Southeast Asia. Malaysia has the next highest income at a distant USD9,650.00 per annum. The average salary in New Zealand is USD38,970.00 and in Australia it’s USD51,360.00. Singapore also has one of the world’s largest concentrations of ultra-high net worth individuals.
International exposure
Many Singaporeans are well travelled and a number of Singapore’s secondary school graduates move to New Zealand and Australia to attend university. This time spent overseas naturally increases their exposure to our food products and when they eventually return home they often look for products that they’ve grown to love during their university days.
Showcase for Southeast Asia
Developing your export business in Singapore should be viewed in the context of a regional Southeast Asia strategy. If you are only weighing up the potential export sales in Singapore then you are not fully grasping the importance of this market.
Singapore is the exhibition market for the rest of Southeast Asia. If you talk to any of the reputable F&B distributors in Malaysia, Thailand, Philippines or Indonesia they will tell you that they often visit Singapore to walk the aisles of major supermarkets to look for inspiring new products. Succeeding in Singapore opens the door to other export markets in Southeast Asia.
Sophisticated retail channels
The Supermarket experience in Singapore is world class. The selection of international products is bountiful, stores are modern and the retailers work hard with incentives that entice consumers to shop.
Business Friendly Regulations
If you have done any business in other Southeast Asian nations such as the Philippines, Indonesia or Thailand you will know that the regulatory constraints imposed on imported F&B products are a burden. Before goods can be shipped to these three countries they must undergo an exhausting product registration process with the local Food and Drug (FDA) authority. This can take anywhere between three and 12 months. There are no such hurdles in Singapore (for most product categories). If your goods meet New Zealand or Australia food safety regulations then it is very likely that they will also meet Singapore AVA regulations.
But…
The Singapore retail channel is one of the most expensive to enter in Asia. The major retailers charge exorbitant entry costs (Listing Fees and compulsory Advertising and Promotion costs) and exporters are required to commit a large upfront investment in order to secure a place on the shelves of the major retail stores.
You would think that such costs would deter international suppliers from entering Singapore, but this is not the case. Global brands are lining up with their wallets open because they understand the significance of success in Singapore within the framework of a Southeast Asia export strategy.
To be sure that the upfront investment is made with confidence, exporters should conduct a thorough market validation exercise before they commit. There are many ways to conduct market validation and some involve purchasing very expense macro-economic data, but after nearly 10 years in the business we have found that the best place to start is by focussing on four fundamentals.
To find out more and download our easy 4 Step Market Validation guide book click here (http://get.exportincite.com/).
Cameron Gordon is director of Incite (www.exportincite.com) – an export development agency for food and beverage brands trading with Asia.
