Retailers today are under intense pressure to meet customer demand for cut-price deals and rapid delivery during sales season. However, a sharp dip in last year’s holiday season sales may have some retailers questioning whether the season’s glory days are behind them.
Since 2022, the global economy has faced numerous challenges as the world slowly returned to its pre-COVID norms. And this was no different in Singapore: inflation and the cost of living have skyrocketed in the country, leading the government to offer rescue packages to help burdened consumers pay their bills.
Meanwhile, the proliferation of around-the-year sales has dampened the hype and momentum that were previously captured during Singles Day, Black Friday, Cyber Monday and Double Days. Indeed, the once-booming Great Singapore Sale came and went without so much as a peep last year. Sales are now so common that Singaporean consumers have become desensitised to the emboldened ‘discount’ sign.
Although consumer confidence has returned following 2022’s dip, shoppers in Singapore are still enduring tighter budgets as a China economic downturn looms and interest rates rise. As such, now the question remains as to whether consumers will shun online sales holidays altogether. Or, will they use them as a weapon against the ongoing global economic crisis?
Optimistic signs
Southeast Asia’s e-commerce economy is among the region’s biggest success stories. Platforms like Alibaba, Lazada and even Gojek fundamentally changed the region’s consumer shopping landscape as people buy a vast array of products across multiple digital channels.
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The COVID-19 pandemic added more than 70 million people to Southeast Asia’s e-commerce economy while e-commerce’s share of all retail sales surged from 5% to 20% between 2016 and 2021.
As of 2023, the entire Asia Pacific e-commerce market is worth US$3.82 trillion and is now forecasted to quadruple in value from 2019 to 2025. For retailers forecasting this year’s November sales, insights from Amazon Prime Day 2023 in July look somewhat promising.
Nielsen data revealed that more than half of shoppers in Singapore reportedly spent around $400 on July’s Prime Day, with stocking up on beauty items ranking as a top priority for 20% of consumers. Moreover, search demand from our proprietary platforms is showing a steady increase compared to the same time last year for the sales events themselves across Asia Pacific with 11 October Prime Day showing a significant spike.
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There is room for optimism among Singapore’s e-commerce players this sales season as long as they remain attuned to where consumers are spending their dollars.
Quality still matters
According to our data, 2023’s sales season tally will see a much larger focus on everyday essentials, including groceries and food. Again, this reinforces the trend of sales events becoming as much of a household budget-saving exercise as opposed to a chance to indulge in luxury or big-ticket items.
Other categories that show high interest during last year’s sales are baby care, beauty and skincare and health supplements. This aligns with the increasing demand for health and wellness products among Singaporean shoppers, with self-care and health playing a key part in post-pandemic lifestyles.
The final group to take note of is technology. Given the prevalence of significant discounts on products such as iPhones and Samsung smartphones, alongside headphones, we are anticipating there will be a sales uplift among these items.
Overall, while these sales events may indeed see growth, big splurges on high-end, luxury items may take a backseat to items and services that help customers save on essential household and technology products.
In terms of purchase decisions, price and discounts are dominant factors, especially given the air of caution among Singaporean consumers. As such, consumer loyalty to particular brands may be superseded by the possibility of better deals from competitors.
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However, other factors such as delivery, ratings and even product description are also still important, showing that people are still looking for quality of service alongside cost-saving. Discount price is not an excuse for discount service. Anything short of pitch-perfect execution could see brands missing out on the momentum of these mega-sales – and certainly deter them from returning in 2024.
For brands looking to see a real impact of sales holidays on their bottom lines, here are some key takeaways. Brands selling either on their own platforms or on marketplaces must make it as easy as possible for customers to buy their products. They must be present across all their consumers’ main channels. Last but not least, they must optimise their marketplace presence based on each platform's unique requirements. In short, consumer appetite is still strong: it’s now up to retail leaders to ensure their brands capture the wallets of consumers.
Bowan Spanbroek is the head of Strategy and Product for Apac at NP Digital
