Companies here are feeling the effects of a sluggish economy, if the decline in corporate gifting is anything to go by.
Local gift businesses have seen a reduction in order volumes from corporate clients this Chinese New Year, with many citing the reduction in corporate gifting budgets as the cause.
Meanwhile, corporate orders for Chinese New Year goodies have soared, perhaps indicating a shift towards cheaper options for gifts.
"For our Signature Vessel hampers, we sell about 1,000 vessels every year," said Chris Kok, marketing manager of FarEastFlora.com.
"This year, we are seeing a drop of about 10 to 15 per cent."
FarEastFlora.com's Signature Vessel hampers are a favourite among corporate customers for gifting to their business partners.
On a whole, Ms Kok said that orders from companies have been slower this year; some clients have accommodated their tightened budget by reducing their order volume.
Director of Gift Hampers Singapore Justin Chung noted that Chinese New Year hamper orders below S$100 have decreased by 40 per cent while those over S$100 have remained constant.
Mr Chung said that customers that purchase lower-value hampers are mostly smaller local businesses.
"So yes, the Singapore economy certainly has had an effect on Chinese New Year gifting, especially for those small and medium sized businesses."
Caston, which designs and prints red packets for clients such as DBS Bank, Singapore Airlines and Bank of America, saw a decrease of 15 per cent from last year's order volume of about 45 million.
Marketing manager Vanessa Sim attributes the decline to a reduction in orders from foreign banks.
"Foreign banks do not necessarily have to practise the culture of Chinese New Year gifting, whereas for local banks, it's customary. This is probably why some foreign banks did not place orders this year," she said.
In lieu of the tightening in corporate gifting budgets, gift businesses have pulled out all the stops.
Noel Gifts has rolled out twice the number of promotions this festive period to encourage customers to place their orders early.
Jess Chan, advertising and promotions manager of Noel Gifts, said that the company has been affected by rising costs of production, transport and manpower.
"However, we have not adjusted our retail prices as we try to either absorb the cost or compensate by working closely with suppliers to reduce the cost of goods," said Ms Chan.
FarEastFlora.com has created a range of products at affordable prices, such as mini Phalaenopsis orchids, and a potted plant and Rooster arrangement as a nod to the zodiac year.
Mr Chung said that curating more styles in the S$50 to S$60 range did not help the sales of Gift Hampers Singapore; instead, products with high differentiation were more popular with customers.
"Products that are exclusive and luxurious at a reasonable price have worked well for the high-end market," he said.
Caston is working with clients to make the printing process more affordable.
"We try to work around clients' budgets through the choice of material and techniques," said Ms Sim.
"For instance, material-wise, they can go with our premium paper indent from Europe if silk material is too costly for their budget."
Other players in this niche industry have been quick to respond to changes in the economy.
PrintnGift, which hot-stamps company logos on pre-designed red packets from Hong Kong, Malaysia, Taiwan and China, swung its target market from multinational corporations to small and medium enterprises (SMEs) this year.
As a result, their order volume has increased sharply.
"Multinational corporations are attractive because they order in big volumes, but the competition was too stiff," said PrintnGift consultant Shin Ee Lim.
On the other hand, SMEs order in smaller bulks, but more SMEs ordering translated to a bigger overall order volume, said Ms Lim.
Another printing company has also found a strong customer base in the SME sector.
Print&Pack sales executive Edmund Sun told The Business Times that the order volume for Chinese New Year has remained relatively unaffected despite the sluggish economy. In fact, some SMEs are opting for slightly higher-cost red packets.
"Red packets are a very good representation of the company's image," said Mr Sun. "So customers definitely want to look good in times of a slow economy."
Meanwhile, other companies are gaining from the sale of festive goodies to corporate clients.
SunnyHills Singapore reported a record year for the sale of its traditional Taiwanese pineapple cakes due to the growth in corporate clients.
"With the current economy, budgets for corporate gifts have tightened, but I think our product's price and quality have benefitted from this," said Damian Lee, managing director of SunnyHills Singapore and Hong Kong.
Bakerzin has seen an increase of 30 per cent year on year in corporate orders for their classic pineapple tarts.
A Bakerzin spokesman attributed the yearly increase to keeping prices consistent.
"We always lock in our raw materials prices in advance; hence we can keep our prices competitive. It does not affect the retail prices of our Chinese New Year products."
This article was first published on January 30, 2017.
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