Franchising
Singapore
Overview
Singapore’s consumers enjoy one of the highest standards of living in the world, with a per capita Gross Domestic Product of more than US$30,000. Despite a small population of only 4.48 million (including permanent residents and foreign workers), it is home to over 400 franchises from around the world. The U.S. dominates franchise concepts in Singapore and is expected to continue to be the market leader. There are American franchises in practically every industry. McDonald's, Starbucks, Hard Rock Cafe, Mister Minit, Avis, Hertz, Budget, Holiday Inn, Toy R Us, Jani King, and many others have operations in Singapore.
The Government of Singapore actively promotes the growing number of indigenous franchise concepts in the country. It also wants to develop Singapore into an international franchise hub to showcase international franchises and to use Singapore as a launching pad for local and foreign franchisors expanding into the region. The Franchising and Licensing Association of Singapore estimates that there were 420 franchise concepts in Singapore in 2005 with over 3,000 franchise outlets. Half of these franchises are home grown and half are foreign concepts. The association currently has more than 140 corporate members and 40% of them are in the food and beverage/food retailing business, followed by education (30%), services such as healthcare, beauty and cleaning services (20%) and others (10%). The association estimates that sales turnover of Singapore-based franchises is 15% of the total domestic retail sales volume.
Best Products/Services
Any new and innovative franchises especially children-related franchise concepts.
Opportunities
The market outlook for franchises is good as the Singapore government continues to actively promote franchising as a form of small business start-up and expansion and encourages the acquisition of foreign master franchises. Many asset rich firms and individuals continue to seek new business concepts to introduce into Singapore. However, potential franchisees are now more discerning than before. The success of selling a franchise in Singapore is based on a number of factors including success in other markets, up-front costs and royalties, the concept’s uniqueness and the flexibility of the franchise agreement. U.S. franchisors should note that real estate in Singapore is very expensive and getting good locations is a challenge.
With its well developed infrastructure, Singapore serves as the regional distribution center and showcase for all franchises. Often, residents from the region travel to Singapore for business and leisure, making Singapore a good test market and springboard for U.S. franchisors wishing to enter the markets of Asia.
Resources
Trade Show
Franchising and Licensing Asia 2007, September 20-22, 2007
Key websites
http://www.export.gov/market_research/index.asp
U.S. Commercial Service, Singapore Contact
Ms. CHIA Swee Hoon, Senior Commercial Specialist
Email: SweeHoon.Chia@mail.doc.gov