Why S’pore needs Project Jewel (and more malls)

Announced by Prime Minister Lee Hsien Loong in his National Day Rally speech in August last year, Project Jewel at Changi Airport will become another iconic international attraction when it opens in 2018. It will cement Singapore’s position as a top tourist destination and also better serve domestic consumers.

Project Jewel will also join other recent retail developments in Singapore, namely Westgate and Jem in Jurong East and Bedok Mall. With the iconic Orchard Road area and the many heartland malls already in existence, it begs the question: Does Singapore need so many malls? The answer is yes.

Project Jewel will cement Singapore’s position as a top tourist destination and also better serve domestic consumers. Photo: CAG, CapitaMalls Asia

IMPORTANCE OF RETAIL SECTOR

Tourism is an important part of Singapore’s economy, representing 4 per cent of its gross domestic product and supporting about 160,000 jobs. Singapore Tourism Board data show that, from 2002 to 2012, the tourism industry has witnessed a strong annual growth rate of 10 per cent in tourism receipts and 6.6 per cent annual growth in visitor arrivals. The rapid growth in international visitor arrivals has been fuelled by the completion of a number of tourist-oriented developments, such as Marina Bay Sands and Resorts World Sentosa, as well as the growth in popularity of internationally renowned events, examples of which are the Formula 1 Singapore Grand Prix and the Singapore Arts Festival.

It is estimated that tourists’ retail spending in Singapore for 2012 reached S$7.4 billion, accounting for around 17.6 per cent of total retail sales, property consulting firm Urbis said. Furthermore, international visitor arrivals are expected to continue to grow over the next few years, translating into an increase in the proportion of tourists’ spending in total retail sales over time, reaching 19 per cent in 2016. The high proportion of total retail sales contributed by international tourists highlights the importance of tourism to the overall retail market here.

Domestically, the Republic has recorded strong economic growth since 2000, with an average annual real GDP growth rate of 5.3 per cent over the 2001 to 2012 period. Driven by the growth in household disposable income and a developed market with sophisticated consumers, Singapore’s retail industry has been transformed over the last decade, with department stores and hypermarkets appearing in all parts of the island.

For Singaporeans, although housing, utilities and transport still account for the largest proportion of household expenditure, there is a significant amount being spent on lifestyle goods and services. The Business Monitor International’s 2014 Singapore Retail Report showed household expenditure on recreation and culture is projected to hit US$17.5 billion (S$22 billion). Spending in hotels and restaurants is expected to reach US$11.1 billion and will continue to grow by an average of 10.3 per cent a year between this year and 2018, hitting the US$16.4 billion mark by 2018.

As incomes continue to rise, household spending is expected to grow over the next five years across all areas of the retail sector, including product categories such as clothing and footwear, household goods, food, drink and tobacco, and personal care.

Source: Today OnLine

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Why S’pore needs Project Jewel (and more malls)

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