Singapore emerged as the 4th most targeted market in the Asia Pacific region for store expansions, with 21 percent of retailers planning to strengthen their presence there, revealed a CBRE report.
“Singapore’s status as a key gateway city continues to attract the attention of global brands, albeit at a more cautious pace,” said Desmond Sim, Head of CBRE Research for Singapore and Southeast Asia.
“Most of the retailers are treading carefully, testing the waters and phase opening timeline. Mid-range fashion and luxury goods are the most ambitious, going by the success rate of similar trades. Economic conditions, the strong Sing dollar and labour shortages aside, Singapore still has a good growth story,” he added.
Separately, China took the number one spot in the APAC rankings as 27 percent of respondents intend to open more retail stores or enlarge their existing space there in 2016.
Hong Kong bagged the second place with 24 percent, followed by Japan (22 percent), Singapore (21 percent) and Australia (19 percent).
Meanwhile, CBRE’s report also revealed that the growing online sales “will not deter retailers’ physical store expansion plans this year.
The report, which studied over 150 major international brands based in Americas, Asia Pacific and EMEA, said 83 percentt of the respondents suggest their physical store expansion plans for 2016 will not be affected by the growth of e-commerce.
Meanwhile the report said only 22 percent of the brands are concerned about stiff competition from online retailing as a threat to their business and are quite cautiously optimistic on physical sales network expansion. “17 percent have large scale ambitions with many retailers looking to open more than 40 stores (up from 9 percent in 2015) in 2016. The vast majority (67 percent) are looking to open up to 20 stores.”
“A physical store presence in key locations is still critical to the strength of a brand’s image. Stores still need to create an emotional affinity with shoppers, and customers still feel a need to go into stores, to physically touch a product and enjoy the feel-good factor associated with a particular brand experience,” said Letty Lee, director for Retail Services at CBRE. “The store is integral to the shopping journey and can be used in a number of different ways, such as to click and collect, research of the product or brand, or to test the product. It’s not solely about the transactional side.”
“A new trend for 2016 saw a fifth of brands, largely from the Americas and EMEA, stating their intention to expand into travel hubs—such as airports and train stations—in 2016 as this will give them access to high footfall in busy locations,” the report said.