Singapore's 240,000 millionaires spur spending on luxury brands

Business Times

a day ago

[SINGAPORE] Luxury spending is defying a global slump in wealthy Singapore, a beacon for high-end retailers grappling with sluggish demand in major markets including China and the US.
Luxury sales in the South-east Asian city-state are expected to climb 7 per cent to S$13.9 billion this year compared to 2024, outpacing heavyweight regional shopping hubs Japan, China and South Korea, according to data shared with Bloomberg by Euromonitor International.
The country's 2024 year-on-year growth surged past every other Asian market tracked by the analytics firm, except Japan. Next year, it's projected to catch up to its 2019, pre-Covid-19 peak of S$14.7 billion.
Singapore covers just 725 square kilometres, fewer than New York City, and its population of around six million is dwarfed by the likes of Asian megacities such as Tokyo and Shanghai. Yet it had the third-largest share of luxury store openings last year among 32 Asia-Pacific cities excluding those in China's mainland, according to data shared with Bloomberg by commercial real estate firm Savills.
That's benefiting places such as The Shoppes at Marina Bay Sands, where Italian label Marni opened its first store in August last year. The mall provides services such as buggies to drive VIPs around for personalised styling sessions, and is set to launch salons previewing unreleased luxury collections for top clients, said Hazel Chan, senior vice-president of retail.
Brands are also ramping up invitation-only sales events, now held several times a week, reflecting a pivot towards ultra-personalised shopping, said Irene Ho, chief executive officer of marketing group The Luxury Network Singapore.
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'Singapore has proved to be a very stable place for wealthy people. That has created a very strong local base for the luxury market,' said Jonathan Siboni, founder and CEO of consultancy Luxurynsight. 'Singapore is an oasis in the desert.'
Luxury's testing ground
The city-state is a rare bright spot in a luxury market dimmed by China's slowdown. Decades of pro-wealth policies have drawn high-net-worth individuals and built a robust finance sector, making it one of the world's richest countries.
Its strength is reinforced by political stability and rising local affluence. Singapore now reportedly counts over 240,000 millionaires, and median household employment income has risen for five straight years.
With visitors from countries including not just China and the US but Indonesia and India driving tourists' retail spend to S$3.9 billion from January to September 2024, up 5 per cent year on year, Singapore is doubling as both a safe haven and strategic gateway for luxury brands targeting South-east Asia.
Brands attracted to Singapore's inbound wealth and clients versed in both Western and Asian aesthetics have begun using the market as a 'controlled launchpad' to test retail ideas, said Angelito Perez Tan, Jr, co-founder and CEO of RTG Group Asia, whose businesses include a luxury consultancy.
'These aren't just gimmicks, they are strategic soft launches that test how consumers engage emotionally with the brand,' he said.
Despite its glitz, Singapore remains home to millions of people who are not millionaires, and its government has been facing a delicate balancing act as it works to narrow the country's wealth gap. Efforts to support the nation's working class hinge partly on raising taxes on the wealthy, but risks driving them away, with some now considering alternative locations such as Dubai.
Singapore's banks stepped up scrutiny of wealthy clients last year, following a record S$3 billion money laundering scandal that exposed weaknesses in how banks and brokerages in the country screen their customers.
Still, the probe has only reinforced Singapore's credibility among the rich by proving that it protects wealth, identity and reputation through the rule of law, said RTG's Tan.
'It showed that the system works, and that's exactly what matters to legitimate high-net-worth individuals,' he said. 'When there's that kind of trust, spending naturally follows. That trust and validation are key reasons why luxury spending in Singapore has remained relatively steady, even as the broader region cools.'
Spending is flowing across all segments of the luxury industry and brands are fighting for attention. Tapestry's affordable luxury brand Coach opened its first-ever bar in May, tucked into a Singapore heritage shophouse and serving up customised martinis and New York City-style street snacks.
High-end watchmaker Audemars Piguet Holding, meanwhile, opened AP Cafe inside its boutique, offering Swiss-Singaporean dishes incorporating wonton skins and chicken rice alongside couture.
Raffles City mall also entered the luxury beauty game in 2024 with massive pop-ups. This year, 21 brands – including Armani Beauty, YSL Beauty, Chanel, Dior and Gucci – are on the bill.
The upgrades are inspiring Singaporeans such as Chloe Liem, 22, an avid collector of jewellery from brands such as Richemont's Van Cleef & Arpels and Cartier.
'Even though I know luxury items are crazily marked up, I understand I'm paying for the experience and feeling of the brand,' she said. 'I feel confident splurging on these items because I enjoy it.' BLOOMBERG