What's special about Orchard Road?

Han Fook Kwang

APR 30, 2017

Shopping globally has changed over the years and Singapore risks being left behind


I am in a cafe enjoying my cappuccino with a friend on the second floor of the Mandarin Gallery overlooking Orchard Road.

It is early evening on a weekday and the traffic is building up below, on the road and along the sidewalk.

Apart from the moving vehicles and pedestrians, there is nothing else happening from as far as my eye can see.

There are no street-level activities anywhere, no performing buskers, no expectant crowd gathered, no action of any note.

It could be any street anywhere; another thoroughfare linking one part of the city to another.

All the action is taking place inside the malls?

I took a walk inside Ngee Ann City, Paragon and Mandarin Gallery.

They are very nice and the big brands are there with their flagship stores.

But you can't say business is roaring and most of the shops seem awfully quiet.

Perhaps it is a typical weekday.

More worrying for Singapore retailers, you can find these glitzy malls in Bangkok, Kuala Lumpur and every Chinese city you can name, many bigger and more fancifully decorated.

In fact, there are also some very nice ones in Jurong East, Serangoon and Punggol.

So, what's special about Orchard Road?

That's the question many have been asking recently about how to restore Singapore's premier shopping district back to its glory days when it was a must-visit place for tourists and locals alike.

The latest proposal floated by Trade and Industry Minister S. Iswaran is to turn it into a pedestrian-only mall, restricting motor vehicles so that more street-level activities can be held.

It's not a bad idea, but there is a deeper underlying problem that needs to be tackled first.

Singapore has lost its appeal as a shopping destination, both for tourists and Singaporeans.

It wasn't like this in the 1970s through to the 1990s.

I remember buying my camera, tape-recorder and everything else here before travelling to the United Kingdom for studies in 1972 because prices were half of those in Britain. They were even cheaper than in Japan, where they were made.

Singapore was a low-cost country then, and one of the few without import duties or sales tax.

It was Asia's shopping paradise, with low prices, abundant variety and lots of shoppers.

My friend who has been in the retail business for 40 years tells me there used to be hordes of Japanese tourists in the area herded from shop to shop behind a tour leader waving a miniature flag.

Not anymore.

Singapore is now a high-cost place in the two areas that affect retail prices most - rentals and wages.

But even that is not the main problem.

The real killer is that shopping worldwide has changed dramatically over the last 10 years and Singapore risks being left behind the dozens of other shopping paradises that have appeared in the real and virtual world.

Both Kuala Lumpur's 1 Utama and Bangkok's CentralWorld dwarf any here, and are among the top 10 largest shopping malls in the world.

The attractions in these two cities and the strong Sing dollar have all but buried the traffic coming here from up north.

Bangkok especially is a major attraction for Singaporeans for food and shopping, and it is now within easy reach with cheap flights and hotel rooms.

Even though tourist arrivals here reached record levels last year, they are shopping less.

It shows in the falling retail sales index (excluding motor vehicles) over the last two years: From 100 in 2014 to 98.8 in 2015 and 96.2 last year.

For some categories, the fall has been sharper, especially in computers and mobile phones, which declined by 25 per cent over the last two years, and watches and jewellery, which fell 5 per cent.

There is also competition from Qoo10, Zalora, Alibaba, Amazon and numerous other online shops in the fast-expanding digital world.

For Orchard Road, there is one more headache to contend with: competition from the rival Marina Bay area for high-end shopping and the numerous suburban malls for the mass market.

It all adds up to a mall-size case of shopping blues.

So, what can be done?

In fact, there have been many studies over the last 20 years with all sorts of recommendations on how to revitalise the retail business.

The 2001 Economic Review Committee had a sub-committee looking into it and identified the following issues: low productivity, under-trained staff, poor alignment between retailers and mall owners and "government intervention which adversely affect retail competitiveness".

It recommended, among other things, promoting a pro-business environment by removing unnecessary rules, setting up a retail academy to train the workforce, offering tax incentives to mall owners to encourage them to upgrade their premises and financial assistance to retailers expanding overseas.

Fast forward today, and there is another plan called the Industry Transformation Plan for the retail business, launched last year, which will "focus on innovation and the adoption of new technologies to drive productivity and competitiveness... Strong industry partnerships and internationalisation were also highlighted as central to the industry's transformation".

Lots of words from many hours of meetings, but, in the meantime, the world outside had changed fundamentally and moved with incredible speed.

Who would have thought 10 years ago that Singaporeans would fly in droves to Bangkok to shop?

To be fair, other countries have also been affected by these changes.

Bloomberg reported last week that American retailers were filing for bankruptcy in record numbers this year, unable to stand up to the competition from online shops, and facing a glut of shopping space from years of overbuilding.

Singapore is in danger of following suit, for all the reasons cited above, and one more: a slower growing and ageing population resulting in a shrinking consumer base.

I don't think the Government has the answers despite years of trying.

In such a fiercely competitive world, there is no other solution except for local retailers to be better, and up there with the best in every aspect of the business.

Alas, Singapore retailers have struggled to make it big locally and outside the country.

For a city that was once the shopping paradise of Asia, it is a pity there have been no home-grown retailers able to take advantage of those golden years to grow and become a regional champion, let alone a global one.

There are some small successes in niche areas, such as Hour Glass in watches, Club 21 in fashion wear, Osim for massage chairs, and Charles and Keith for shoes.

But there are no local equivalents of retail giants like 7-Eleven, Takashimaya, Uniqlo, or Watsons able to conquer overseas markets.

Where are the Singapore winners with creative ideas to put the paradise back into the country's retail business?

My friend says with a straight face that his tourist friends tell him they get more excited visiting Mustafa because Serangoon Road is one of the liveliest streets in Singapore with its peculiar sights, sounds and smells, and Lucky Plaza, because you can haggle over that watch or camera.

There might be something there, about being unique, authentic and Singaporean.

Some of my other favourite places include Katong, Tiong Bahru and Haji Lane.

Anything but another shopping mall.

The writer is also a senior fellow at the S. Rajaratnam School of International Studies, Nanyang Technological University.