Singapore brands lag those of Asean neighbours in local market share

Singaporean brands lag behind their South-east Asian counterparts in terms of market penetration, a recent survey has found.

In findings of a global brand survey by marketing research company The Nielsen Company, Singaporean brands were found to have less a fifth of total market share. In Indonesia, however, homegrown brands capture more than half the market, making it the top South-east Asian country in terms of market penetration by local brands.

The survey found that in Singapore, local brands had the lowest share of sale value between the years 2012 and 2014; they were dwarfed by the sales of multinational companies (MNCs), which snagged a majority market share.

In contrast, local brands in Indonesia enjoyed a majority share of sale value. In Thailand, MNCs also dominate, but Thai brands are winning the hearts and minds of consumers; their share grew by 34 per cent from 2012 to 2014. Singapore brands' share of sale value grew only 4 per cent in the same time period.

The survey polled more than 30,000 online consumers in 61 countries in the Asia-Pacific, Europe, Latin America, the Middle East/Africa and North America; 503 respondents were from Singapore.

Nielsen did the survey between August and September 2015, and pegged its margin of error at plus or minus 0.6 percentage points at the global level.

In Singapore, nearly seven in 10 respondents said that a brand's country of origin was as important or more important than determinants such as price, function and quality in helping them decide on buying the brand.

But these factors weighed different across product categories. Singaporeans preferred local to global brands for fresh foods, where perishability was a concern; in purchasing vegetables, for example, 36 per cent preferred local brands, and only 20 per cent preferred global brands.

However, global brands mostly trumped local ones in beauty and personal care products. For example, 44 per cent of Singaporeans favoured global cosmetics brands; 10 per cent went for local ones. It was likewise for electronics. In choosing the brand of a computer or laptop, for example, close to seven in 10 liked global brands better than local, and only one in 10 preferred local brands.

Joan Koh, managing director of Nielsen Singapore and Malaysia, said consumers prefer global brands because of their quality and innovative products. "Homegrown brands ought to accentuate their relevance to the local consumers and establish the right relationships early. With their understanding of local preferences, Singapore brands can innovate in areas of unmet and emerging needs, maximise efficiency and be agile about responding ahead of the competition."

Aside from country of origin, better price or value was the reason Singaporeans cited most often when deciding between global and local brands. Factors such as whether the brand was on sale or whether the brand used safer production methods followed close behind as important reasons.

The level playing field of e-commerce provides local brands a chance to achieve similar successes to global brands in winning Singaporean hearts.

The survey revealed that Singaporeans shopped online for electronics and fashion the most, and that convenience or ease of purchase, better pricing than local stores and a lack of availability locally were main reasons why they shopped online.

This article was first published on May 13, 2016.
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