Retail (Singapore) Industry Outlook - DBS Bank

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Industry Outlook
Retail (Singapore)
                                                                    Refer to important disclaimers at the end of this report

DBS Group Research . Asian Insights Office                                            17 September92015
                                                                                                    March 2017

Macro Outlook
Singapore’s GDP growth to accelerate to 2.8% in 2017. We have upgraded our 2017 growth forecast for Singapore to
2.8% (up 1.5 percentage points) on the back of the upward GDP revision for previous quarters and a robust 2016
fourth quarter, which registered the strongest quarterly growth in six years at 12.3% on-quarter, seasonally adjusted
annual rate. This translates to 2.9% on-year growth, with GDP growth for 2016 coming in at 2.0%, substantially
above expectations and backed by significant upward revision to previous quarters’ data as well. The key driver in the
2016 fourth quarter was an 11.5% on-year surge in manufacturing growth, driven by semiconductor (up 62% on-year)
and pharmaceutical (up 34% on-year) manufacturing. The services sector grew by 8.4% on-quarter, seasonally
adjusted annual rate, or by 1% on-year, led by financial (up 36.5% on-quarter) and trade-related services – transport
and storage services rose by 12.4%. Loan growth has bottomed and will likely trend higher. Container throughput and
re-export growth have continued to creep higher too.

Expect spillover from the manufacturing and services sectors into the rest of the economy. GDP performance from the
2016 fourth quarter bodes well for overall GDP and employment growth. We see the positive impact from
semiconductor and pharmaceutical clusters spilling over to the rest of the economy, e.g. into the precision engineering
cluster, transport and warehousing for exports, financial, other supporting services and small- to medium-sized
enterprises. This should drive more broad-based improvement in the rest of the economy.

GDP growth rate: Year-on-year change                                                   Remarks
 Growth %
 16                                                                                    1. GDP growth is set to
                                                                                          accelerate to 2.8% in 2017
 14
 12                                                                                    2. 2016 fourth quarter driven
                                                                                          by semiconductor and
 10
                                                                                          pharmaceutical
   8                                                                                      manufacturing
   6
                                                                                       3. Services sector is improving
   4                                                                                       – led by financial and
   2                                                                                       trade-related services

   0
  -2
  -4
         2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F

 Source: ThomsonReuters, DBS Bank

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Industry Outlook
Retail (Singapore)

Singapore retail sales (ex-motor vehicles)   Remarks

  % chg
                                             1. Overall retail sales (ex-
  15
                                                motor vehicles) have, since
                                                2012, trended on a gentle
  10
                                                decline. This is largely in
                                                line with decelerating GDP
   5
                                                growth
   0
                                             2. Retail sales growth
                                                negative in 2016, in line
   -5
                                                with lower private
                                                consumption and higher
  -10
                                                unemployment rate

  -15
        Mar-12

        Mar-15

        Mar-16
        Mar-13

        Mar-14
        Sep-12

        Sep-14

        Sep-15

        Sep-16
        Sep-13
        May-12

        May-13

        May-16
        May-14

        May-15
          Jul-13

          Jul-14
          Jul-12

          Jul-15

          Jul-16
         Jan-13

         Jan-14

         Jan-15
         Jan-12

         Jan-16
        Nov-12

        Nov-13

        Nov-15

        Nov-16
        Nov-14

 Source: Bloomberg Finance L.P., DBS Bank

Singapore shop rental                        Remarks

                                             1. Retail rents have fallen in
                                                2016 due to weak
                                                consumption and GDP
                                                growth

 Source: CEIC, DBS Bank

                                                                              .
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Industry Outlook
Retail (Singapore)

Private consumption tapered off as unemployment rate increased. Post-financial crisis recovery has led to growth in
consumption expenditure. However, the decline in 2012 was due to a reduction in tourist arrivals and non-resident
expenditure, as well as recreation and culture. In 2015, consumption growth expanded sharply on increased
transportation costs, attributable to the high cost of certificates of entitlement (COE, vehicle ownership licenses) and
the number of new and used car sales. It, however, tapered off in 2016 due to a higher unemployment rate of 2.1%.

Private consumption expenditure growth                                                  Remarks
 Growth %
 5.0                                                                                    1. Increase in private
                                                                                           consumption in 2015 was
 4.5                                                                                       led by the transportation
 4.0                                                                                       sector
 3.5
                                                                                        2. In 2015, the number of
 3.0                                                                                        new vehicle registrations
 2.5                                                                                        increased 54% while
                                                                                            vehicle transfers increased
 2.0                                                                                        20% at a time when COE
 1.5                                                                                        prices ranged between
                                                                                            S$54,000 and S$78,000
 1.0
 0.5
 0.0
         2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F

 Source: DBS Bank

The age distribution of cars in Singapore is lumpy. COE prices currently stand at around S$50,000. According to the
age distribution of cars in Singapore, close to 100,000 cars will reach the age of nine to ten years and will be due to be
scrapped this year, compared to 30,000 to 50,000 per year for cars aged two to nine years. Motor vehicle taxes and
vehicle quota premiums revenue for the Singapore government in 2017 are estimated to total S$9.3 billion (up 0.8%
from S$9.2 billion in 2016). COE quotas are expected to expand, driving up motor vehicle tax, estimated at S$2.7
billion, by 18.2%.

COE price, Category A (S$)                                                              Remarks

  S$
                                                                                        1. Vehicle population
  100000                                                                                   growth rate is currently
   90000                                                                                   0.35%
   80000
   70000
   60000
   50000
   40000
   30000
   20000
   10000
         0

 Source: Bloomberg Finance L.P., DBS Bank

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Industry Outlook
Retail (Singapore)

Singaporeans’ nominal and real wages continue to increase. According to Ministry of Manpower statistics, the median
monthly wage grew from S$2,543 in 2007 to S$4,056 in 2016. The nominal wage has never declined. Workers
               th      th
between the 25 and 75 percentile generally draw a monthly salary of between S$2,000 and S$6,999 per month.

Mean gross monthly income (RHS) and real wage increase (LHS)                          Remarks
  Growth %                                                              S$
  6%                                                                     4800         1. Real wage growth was
                                                                                         3.1% from 2010 to 2016
  5%                                                                     4200            and 3.3% from 2015 to
                                                                                         2016
  4%                                                                     3600
  3%                                                                                  2. Average bonus between
                                                                         3000            2005 and 2015 was 2.2
  2%                                                                                     months
                                                                         2400
  1%
                                                                         1800
  0%
 -1%                                                                     1200

 -2%                                                                     600

 -3%                                                                     0
         2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

 Source: Ministry of Manpower, DBS Bank

According to the Monetary Authority of Singapore’s (MAS) Financial Stability Review 2016, Singapore’s household
debt-to-GDP was close to 80% in 2015, making it the fourth highest among Asia-10 nations, behind Malaysia,
Thailand and Korea. High-ticket items such as home purchases and cars require loans. Driven partially by low interest
rates, the property market price increase during 2010 to 2013 had also caused the increase in household indebtedness.
The TDSR (total debt servicing ratio), introduced in 2013, will help to keep household leverage in check.

Household debt-to-GDP ratio                                                           Remarks
 %
 90%                                                                                  1. Higher than Taiwan,
                                                                                         Philippines, Indonesia,
 80%                                                                                     India Hong Kong and
                                                                                         China
 70%
 60%                                                                                  2. Lower than Malaysia,
                                                                                         Thailand, and Korea’s
 50%                                                                                     debt-to-GDP ratio
 40%                                                                             1.

 30%
 20%
 10%
   0%
         2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

 Source: Singstat, DBS Bank

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Industry Outlook
Retail (Singapore)

TDSR and mortgage servicing ratios (MSR) relaxed in 2016. A series of property cooling measures have been introduced
since 2010, including adjustments to loan-to-value (LTV) ratios. Two key measures were the additional buyer stamp
duty (ABSD) and TDSR introduced in December 2011 and June 2013 respectively. Additional buyer stamp duties were
imposed on second and subsequent properties, while debt and MSRs limit how much buyers can borrow and repay to
fund their property purchases in relation to their income and total indebtedness. In September 2016, MAS allowed the
refinancing of property loans above the TDSR threshold and MSR threshold of 30% for owner-occupied HDB flats and
executive condominiums (ECs).

Singapore housing index                                                                                                                                                                                                                                                                        Remarks
  Index 2000=100
  160                                                                                                                                                                                                                                                                                          1. ABSD currently ranges
  150
                                                                                                                                                                                                                                                                                                  from 7-15% depending
  140
                                                                                                                                                                                                                                                                                                  on citizenship status and
                                                                                                                                                                                                                                                                                                  the number of properties
  130
                                                                                                                                                                                                                                                                                                  already owned
  120
  110                                                                                                                                                                                                                                                                                          2. TDSR cannot exceed 60%
  100                                                                                                                                                                                                                                                                                             of buyer’s net income
   90                                                                                                                                                                                                                                                                                             while MSR cannot exceed
   80                                                                                                                                                                                                                                                                                             30% of income for new
   70                                                                                                                                                                                                                                                                                             properties
   60
                 Dec-94

                                                     Dec-97

                                                                                         Dec-00

                                                                                                                             Dec-03

                                                                                                                                                                 Dec-06

                                                                                                                                                                                                     Dec-09

                                                                                                                                                                                                                                         Dec-12

                                                                                                                                                                                                                                                                             Dec-15
        Mar-94

                                                                                Mar-00

                                                                                                                    Mar-03

                                                                                                                                                                                            Mar-09
                                            Mar-97

                                                                                                                                                        Mar-06

                                                                                                                                                                                                                                Mar-12

                                                                                                                                                                                                                                                                    Mar-15
                                                                       Jun-99

                                                                                                                                               Jun-05

                                                                                                                                                                                   Jun-08

                                                                                                                                                                                                                                                           Jun-14
                          Sep-95
                                   Jun-96

                                                              Sep-98

                                                                                                           Jun-02

                                                                                                                                      Sep-04

                                                                                                                                                                          Sep-07

                                                                                                                                                                                                                       Jun-11

                                                                                                                                                                                                                                                  Sep-13
                                                                                                  Sep-01

                                                                                                                                                                                                              Sep-10

                                                                                                                                                                                                                                                                                      Sep-16
 Source: Bloomberg Finance L.P., DBS Bank

Singapore’s interest rates, in particular the three-month swap offer rate (SOR), are foreign exchange-implied rates that
take into account the US dollar/Singapore dollar forward swap. The SOR is used as a benchmark to price commercial
loans. The forwards typically reflect short-term interest rate differentials between Singapore and the US. As a foreign
exchange-implied rate, the SOR is susceptible to changes in demand and supply for the Singapore dollar, and usually
comes under downward pressure when the Singapore dollar strengthens against the US dollar, and vice versa. When
the Singapore dollar is strengthening, demand for the Singapore dollar results in narrowing forward points and a lower
SOR. Essentially, if a foreign investor can profit from narrower US dollar/Singapore dollar forward swap points
(strengthening Singapore dollar), he or she will be able to accept lower returns from Singapore dollar interest rates
(SOR).

Singapore interest rates                                                                                                                                                                                                                                                                       Remarks
  Index 1998=100
  4.5                                                                                                                                                                                                                                                                                          1. Interest rates expected to
  4.0
                                                                                                                                                                                                                                                                                                  increase in view of four
                                                                                                                                                                                                                                                                                                  rate hikes in the US this
  3.5
                                                                                                                                                                                                                                                                                                  year
  3.0

  2.5                                                                                                                                                                                                                                                                                          2. Interest rate increase had
  2.0
                                                                                                                                                                                                                                                                                                  led to sluggish retail sales
                                                                                                                                                                                                                                                                                                  in 2015
  1.5

  1.0                                                                                                                                                                                                                                                                                          3. Low interest costs also
  0.5                                                                                                                                                                                                                                                                                             fuelled the property
  0.0
                                                                                                                                                                                                                                                                                                  market from 2009 to
                                                                                                                                                                                                                                                                                                  2013

 Source: Bloomberg Finance L.P., DBS Bank
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Industry Outlook
Retail (Singapore)

Population growth rate of 1.5%. Singapore is targeting a population of 6.9 million by 2030, according to its latest
planning parameter. Based on the June 2016 population of 5.6 million, Singapore’s population growth rate would
have to be at a compound annual growth rate (CAGR) of 1.5% per annum for the population to reach 6.9 million by
2030.

Singapore’s resident population pyramid 2016                                                                                                                                                                                                          Remarks

                               >84                                                       Male                                                                                                                                                         1. There were close to 4
                            80 - 84                                                                                                                                                                                                                      million Singapore
                                                                                         Female
                            75 - 79                                                                                                                                                                                                                      residents in 2016
                            70 - 74
                            65 - 69
                            60 - 64                                                                                                                                                                                                                   2. Over 50% of Singapore’s
                            55 - 59                                                                                                                                                                                                                      population is between 30
                            50 - 54
                            45 - 49
                                                                                                                                                                                                                                                         and 60 years of age
                            40 - 44
                            35 - 39                                                                                                                                                                                                                   3. Gender split is 51% to
                            30 - 34                                                                                                                                                                                                                      49%, in favour of females
                            25 - 29
                            20 - 24                                                                                                                                                                                                              2.
                            15 - 19
                            10 - 14
                             5-9
                             0-4
                                       200,000                                  100,000                                         0                                100,000                                 200,000

 Source: Singstat, DBS Bank

Singapore’s inflation bottoming out. Singapore does not have natural resources and a huge agriculture community. As
such, most goods and raw materials are imported for manufacturing or consumption. Inflation is typically led by supply
and less commonly from the demand side. Singapore experienced two years of negative inflation led by the slump in oil
prices and, to a lesser extent, property cooling measures. The MAS manages the Singapore dollar to keep inflation in
check. It has maintained a zero Singapore dollar nominal effective exchange rate appreciation policy stance since April
2016 and will likely continue doing so in view of the slow growth.

Inflation rate: Year-on-year change                                                                                                                                                                                                                   Remarks

  % chg
  10
                                                                                                                                                                                                                                                      1. Slump in oil prices led to
                                                                                                                                                                                                                                                         negative inflation in 2015
   8                                                                                                                                                                                                                                                     and 2016

   6                                                                                                                                                                                                                                                  2. Inflation increase in 2008
                                                                                                                                                                                                                                                         due to food, transport and
   4                                                                                                                                                                                                                                                     housing, before declining
                                                                                                                                                                                                                                                         to a negative figure in
   2                                                                                                                                                                                                                                                     2009 due to the global
                                                                                                                                                                                                                                                         financial crisis
   0

  -2
                                                                                                                                                                                                                                                      3. 2010 inflation was largely
                                                                                                                                                                                                                                                         due to increasing COE
  -4                                                                                                                                                                                                                                                     prices
                                                    Dec-04

                                                                                                                                                                Dec-11
                         Mar-03

                                                                                                                                     Mar-10
                                                                                                          Jun-08

                                                                                                                                                                                                                      Jun-15
                                                                                        Apr-07

                                                                                                                                                                                                    Apr-14
                                                                               Sep-06

                                                                                                                                                                                           Sep-13
                                           May-04

                                                                                                                                                       May-11

                                                                                                                                                                         Jul-12
                                                             Jul-05
       Jan-02

                                                                                                                   Jan-09

                                                                                                                                                                                                                               Jan-16
                                                                                                 Nov-07

                                                                                                                                                                                                             Nov-14
                                                                      Feb-06

                                                                                                                                                                                  Feb-13
                                  Oct-03

                                                                                                                                              Oct-10

                                                                                                                                                                                                                                        Aug-16
                Aug-02

                                                                                                                            Aug-09

 Source: Bloomberg Finance L.P., DBS Bank

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Industry Outlook
Retail (Singapore)

Singapore has rejuvenated over the years into a destination for visitors for both leisure and events. In 2008, Singapore
hosted its first edition of Singapore Formula 1 Grand Prix, with the Asia-Pacific Economic Cooperation Summit
following closely in 2009. The opening of Resorts World Sentosa and Marina Bay Sands in 2010 injected life into
Singapore and tourist arrivals crossed 15 million in 2013. By 2016, tourist arrivals crossed the 16 million mark, as
Chinese visitors, who stayed away following the MH370 incident, returned.

Singapore visitor arrivals                                                             Remarks
  m
  18                                                                                    1. 2014 decline in visitor
                                                                                           arrivals due to decline in
  16                                                                                       Chinese visitors over loss of
                                                                                           MH370 aircraft
  14
  12                                                                                    2. 2015 visitor arrivals picked
                                                                                           up due to events such as
  10                                                                                       South East Asian games
   8                                                                                       and lower 2014 base

   6                                                                                    3. 2016 saw a recovery in
   4                                                                                       Chinese visitors

   2
   0
         2009      2010      2011    2012     2013     2014      2015     2016

 Source: Singapore Tourism Board, DBS Bank

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Industry Outlook
Retail (Singapore)

Sub-segment Outlook
Luxury retail

Singapore’s luxury retail market represents 4.4% of Singapore’s store-based retail market. Singapore’s luxury retail
segment was worth S$1.3 billion in 2016. The luxury retail segment grew at a five-year CAGR of 2% between 2011
and 2016. Growth was dominated by luxury bag and luggage specialists (up 2.2%), luxury department stores (up
2.5%), and luxury jewellery and watch retailers (up 2.2%). Luxury apparel and footwear declined by 1.1%. The
number of outlets has moderated from the peak of 83 in 2014 to 79 in 2016. Luxury retailing peaked in 2014 and has
dipped in recent years, mainly attributed to the falling numbers of inbound tourists, the strength of the Singapore
dollar, locals spending overseas and reduced shopping expenditure.

Singapore’s luxury retail market breakdown 2016                                    Remarks

                        Jewellery and            Apparel and                        1. Department stores and bags
                        watch retailers           footwear
                                                    11%
                                                                                       and luggage specialists
                            12%
                                                                                       dominate the Singapore
                                                                                       luxury retail market with
                                                                                       close to 80% share

                                                                                    2. Department store
                                                               Bags and                contribution was largely by
                                                               Luggage                 Takashimaya
                                                               specialist
                                                                 33%
                 Department
                   stores
                    44%

 Source: Euromonitor, DBS Bank

2.0% CAGR for Singapore’s luxury retail market from 2011 to 2016                   Remarks
         S$m
    1600                                                                           1. Growth led by department
                                                                                      stores, jewellery and
    1400                                                                              watches, and bag and
    1200
                                                                                      luggage specialists

    1000                                                                           2. Luxury apparel and
     800
                                                                                      footwear declined, losing
                                                                                      growth to mid- to low-end
     600                                                                              luxury apparel and
                                                                                      footwear retailers
     400
     200                                                                           3. Weakening tourist spending
                                                                                      has also a resulted in lower
          0
               2011        2012       2013       2014       2015         2016         luxury sales in recent years
                 Apparel and footwear        Bags and Luggage specialist
                Department stores            Jewellery and watch retailers

 Source: Euromonitor, DBS Bank

                                                                                                                     .
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Industry Outlook
Retail (Singapore)

Four players dominate around 70% of Singapore’s luxury retail market                  Remarks

                              Others
                                                                                       1. Luxury department store
                               13%
                                                                                          segment is dominated by
          Burberry Group
                                                                                          Takashimaya
               Plc
               5%
            Kering SA                                                                  2. Market share is fragmented
              5%                                               Takashimaya Co
                                                                     Ltd                  across other luxury retail
                                                                    45%                   players who are mainly
         Tiffany & Co                                                                     luxury bag retailers
              6%

             Prada SpA
                7%

                    Hermès
                 International
                      SCA              LVMH
                      7%                12%
 Source: Euromonitor, DBS Bank

Prada shrank in retail area, while Tod’s, Takashimaya, Tiffany, Burberry, and Richemont saw sales areas remain
constant. Players continued to expand their physical presence in Singapore. There were a 4% increase in number of
stores and around a 50% increase in luxury retail selling area between 2011 and 2016. Only Prada decreased its selling
area by 3%, closing down one store in 2015. Those with increased selling area saw net store increases of between one
to four stores and floor area increase of 3-18%, namely LVMH, Hermes, Kering-PPR, Coach, Salvatore Ferragamo,
Ralph Lauren and Mulberry.

LVMH, Takashimaya, and Burberry dominate around 75% of Singapore’s luxury             Remarks
retail floor area

                                                                                      1. Takashimaya has the
                     Others                                                              biggest selling area in
                      26%
                                                                                         Singapore

                                                             Takashimaya
                                                                39%                   2. Luxury retail companies
                                                                                         take up an estimated
                                                                                         800,000 square feet of
                                                                                         selling space in Singapore

                 LVMH
                  15%

                                       Burberry Group
                                           20%

 Source: Euromonitor, DBS Bank

Leverage growth on existing outlets. Based on the estimated market revenue of 14 companies across the past five
years, ten players registered positive CAGR growth of 1.5-6.4%. LVMH, Kering, Burberry and Lacoste were the four
that saw sales declines of between 0.5% and 7.8%. While selling space for these four companies had generally
increased, sales efficiency per store and per square foot declined, which could signal overexpansion. The ten players
which grew revenue did so in two ways: (i) Takashimaya, Prada, Tiffany, Richemont and Tod’s grew sales per square
foot while maintaining or reducing total sales area; (ii) the rest of the companies grew their revenues by increasing
                                                                                                                        .
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Industry Outlook
Retail (Singapore)

selling areas via store or outlet expansion. However, they registered a decline in sales per square foot due to the
increased selling space.

Apparel and Footwear
Growing at 1.5% CAGR led by internet retailing. Singapore's apparel and footwear segment was S$3.8 billion in 2016,
comprising of luxury apparel and footwear retailers and internet retail. The share of internet retailing for apparel and
footwear has crept up to 8% of the total market, growing at a CAGR of 6.4% over the past five years. There were
3,348 apparel and footwear specialist retail outlets and 23 luxury apparel and footwear retailers in Singapore in 2016,
lower than the total of 3,386 outlets five years ago.

1.5% CAGR growth for Singapore’s apparel and footwear market                              Remarks
      S$m               Apparel and Footwear through Internet Retailing
                                                                                           1. Internet apparel and
                        Luxury Apparel and Footwear Retailers
    4500                                                                                      footwear is now 10% of
                        Apparel and Footwear Specialist Retailers
                                                                                              the market
    4000

    3500                                                                                   2. CAGR growth of internet
                                                                                              retailing versus brick-and-
    3000
                                                                                              mortar retailers was 6.4%
    2500                                                                                      to minus 1% over the past
                                                                                              five years
    2000

    1500                                                                                   3. While luxury footwear and
                                                                                              apparel declined from
    1000                                                                                      2011 to 2016, mid- to
     500                                                                                      low-end apparel and
                                                                                              footwear retail sales
          0                                                                                   increased
              2011        2012         2013       2014          2015      2016
 Source: Euromonitor, DBS Bank

Mainly small independent retailers. Singapore's apparel and footwear segment is largely fragmented with many
independent specialist retailers. Entry barriers are low with some level of differentiation. Key fashion retailers are either
local distributors of various brands (Melwani Group, RSH Holdings, FJ Benjamin) or international groups operating their
own brands (Fast Retailing, H&M, LVMH).

2016 share of apparel and footwear market                                                 Remarks
                                  A&F Internet
                                   Retailing                                              1. Market size of S$3.8 billion
                     Luxury Apparel
                                      8%
                      and Footwear
                        Retailers
                           4%
                                                                                          2. Approximately 88% of
                                                                                             sales are through specialist
                                                                                             retailers even though the
                                                                                             internet channel is
                                                                                             growing

                                                     A&F Specialist
                                                       Retailers
                                                         88%

 Source: Euromonitor, DBS Bank

                                                                                                                            .
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Industry Outlook
Retail (Singapore)

Fast fashion taking over traditional fashion retail players. Fast fashion retailers with mid-priced positioning, including
Uniqlo, Forever21 and H&M, have seen their market shares growing over traditional retailers such as Charles & Keith,
Giordano and Esprit. The rise of online retailing and blogshops has also shaped consumer behaviour to be less brand
conscious, while paying much less online for designs similar or comparable to the branded designs found in stores. Fast
fashion outlets offer value, branding and the latest designs in this respect.

Key apparel & footwear retailers’ market share in 2016                                           Remarks
 Brand              Company                                   Outlets    Sales psf $     Share
                                                                                                 1. Segment remains
 Uniqlo             Fast Retailing Co Ltd                       23          660          5.6%       fragmented with market
 H&M                H&M Hennes & Mauritz AB                     10         1,090         4.6%       leaders holding market
 Mango              Punto Fa SL (Mango)                         13         2,910         2.9%       share of less than 6%
 Zara               Inditex, Industria de Diseño Textil SA       8         1,688         2.6%
 Burberry           Burberry Group Plc                           3          395          1.8%    2.   Largest chain stores have
 Giordano           Giordano International Ltd                  41         1,287         1.6%         over 20 outlets
 Esprit             Esprit Holdings Ltd                         21          551          1.4%
 Topshop            Arcadia Group Ltd                            6         1,085         1.2%
 Charles & Keith    Charles & Keith Holdings Pte Ltd            26         2,074         1.1%
 Others             -                                          3,023        949          77.1%
 Total                                                         3,348        933         100.0%

 Source: Euromonitor, DBS Bank

Internet retailing to increase while retailers shift to provide new retail experiences. Sales growth of apparel and
footwear specialist retailers and internet retailing is forecast to be at 2.2% CAGR for the next five years, largely led by
internet retailing. Growth will be driven by new retail spaces in new shopping malls, attracting online and overseas
players seeking to take advantage of the opportunity to develop seamless omnichannel operations encompassing
online and retail experiences. As consumers continue to be influenced online, a pick-up will also be seen in mobile
retailing, online fashion blogshops and on social media platforms. This is expected to drive more fashion-tech start-ups
during this period.

2.2% CAGR for specialist retailers and internet retailing over the next five years               Remarks
          S$m                 A&F Specialist Retailers       A&F Internet Retailing              1. Growth is expected to
     4500                                                                                           continue being led by
                                                                                                    online retailing
     4000

     3500                                                                                        2. Expect new retail
                                                                                                    experiences to kick in to
     3000                                                                                           sustain growth in store
     2500                                                                                           retailing

     2000

     1500

     1000

         500

            0
                   2016         2017F          2018F         2019F       2020F         2021F

 Source: Euromonitor, DBS Bank

                                                                                                                                  .
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Industry Outlook
Retail (Singapore)

Recreational Goods
Leisure and personal goods market largely driven by jewellery and watches. The leisure and personal goods market
grew at a 5.5% CAGR from S$5.8 billion between 2011 and 2014 but fell 4.6% from 2014 to 2106 to S$5.9 billion.
More particularly, the market fell 11% on-year from 2015 to 2016 on the back of poor economic performance and
driven by a 17% decline in jewellery and watch sales. The declining trend was in line with slowing GDP growth, albeit
with a one-year lag. Growth going forward is not expected to be robust, dipping slightly over the next few years before
ending flat at S$5.9 billion in 2021.

Flat growth forecasted for the next five years                                       Remarks

                                                                                     1. Growth between 2011 and
                                                                                        2015 was driven by higher
                                                                                        sales per square foot for
                                                                                        watch and branded goods
                                                                                        retailers

                                                                                     2. In 2016, stores consolidated
                                                                                        due to competition from
                                                                                        online channels and cost
                                                                                        pressures

 Source: Euromonitor, DBS Bank

Between 2011 and 2015, sales per square foot of watch, jewellery and branded goods retailers experienced a surge. In
particular, names including Prada, Stelux, Sincere, Aspial, Soo Kee, Tiffany, Richemont, World of Sports and RSH saw
over a 5% CAGR increase in sales per square foot. Sales per square foot of the market declined in 2016 by 9.6%, on
high rents, softening tourist spending and the rise of internet retailing.

Singapore's leisure and personal goods market composition 2016                        Remarks
                         Other Leisure
                         and Personal                                                 1. 80% of Singapore’s leisure
                        Goods Specialist                                                 and personal goods market
                           Retailers                                                     is dominated by jewellery
                            12%                                                          and watches, bags and
              Sports Goods
                 Stores                                                                  luggage, media and sports
                  8%                                                                     goods

                                                                                      2. Other leisure and personal
          Media Products                                                                 goods segments include
             Stores                                          Jewellery and               toys and games, pet shops,
              12%                                           Watch Specialist             stationery shops
                                                               Retailers
                                                                57%
                   Bags and
                   Luggage
                   Specialist
                   Retailers
                     11%

 Source: Euromonitor, DBS Bank

                                                                                                                       .
Page 12
Industry Outlook
Retail (Singapore)

Online channels are expected to become more prevalent. These will generally hamper the growth of leisure and
personal goods sales in Singapore. Jewellery and watch specialists are poised for negative growth as retailers migrate to
online channels with more digital marketing. Bags and luggage specialists have seen falling tourist spending, while
marketplaces like Reebonz and Asos offer alternative channels for consumers to purchase similar products online at
more competitive prices. Media consumption in recent years has gone online with more books, music and video
content becoming downloadable as e-content into platforms such as smartphones and tablets. Sporting goods
continue to be stable and are forecast to grow at a CAGR of 1% over the next five years supported by the market’s
active lifestyle and sporting events. Competition, nonetheless, is keen with price discounts and promotions commonly
offered by retailers in the market.

2016 leisure and personal goods players

 Players in Singapore                               Outlets                  Sales psf $                 Share

 Hour Glass Ltd, The                                  9                       12,313                      4.0%
 Sincere Watch Ltd                                    4                       16,219                      2.6%
 LVMH Moët Hennessy Louis Vuitton SA                 17                        1,436                      2.5%
 Popular Holdings Ltd                                27                         812                       2.3%
 Aspial Corp Ltd                                     42                        4,132                      1.9%
 Cortina Holdings Ltd                                 6                        7,143                      1.8%
 Soo Kee Jewellery Pte Ltd                           32                        3,124                      1.6%
 Hermès International SCA                             3                        8,169                      1.6%
 Prada SpA                                            5                        2,640                      1.6%
 Toys "R" Us Inc                                      9                         695                       1.5%
 Tiffany & Co                                         3                       10,380                      1.3%
 Pet Lovers Centre Pte Ltd                           69                         446                       1.1%
 Kering SA                                            9                        1,610                      0.9%
 Richemont SA, Cie Financière                         5                        2,035                      0.8%
 Kinokuniya Co Ltd                                    4                         846                       0.8%
 Coach Inc                                            7                        1,861                      0.7%
 Stelux Holdings International Ltd                   18                        2,592                      0.7%
 Poh Heng Jewellery Pte Ltd                          15                        2,937                      0.6%
 World of Sports Holdings Pte Ltd                    19                         546                       0.6%
 Taka Jewellery Pte Ltd                              13                        4,077                      0.6%
 Royal Sporting House (RSH) Ltd                      22                         921                       0.6%
 Nike Inc                                            13                        1,867                      0.5%
 Adidas Group                                        11                        1,943                      0.4%
 Samsonite International SA                          16                         839                       0.4%
 Mothercare Plc                                      17                         374                       0.4%
 Ludendo Groupe                                       2                        1,045                      0.3%
 Asian Jewellery Pte Ltd                              6                        1,845                      0.3%
 Pandora A/S                                         11                         916                       0.3%
 Thai Beverage PCL                                    7                         383                       0.3%
 Kiddy Palace Pte Ltd                                15                         108                       0.2%
 Mulberry Group Plc                                   3                        1,504                      0.2%
 Rimowa GmbH                                          3                        1,081                      0.1%
 Meyson Holdings Pte Ltd                              6                        1,184                      0.1%
 MPH Group Malaysia Snd Bhd                           3                         574                       0.1%
 Pets' Station Holding Pte Ltd                        5                         830                       0.1%
 Princess Jewellery                                   3                        1,833                      0.1%
 Mini Toons Pte Ltd                                   7                         298                       0.0%
 MJ Multimedia Holdings Pte Ltd                       1                         376                       0.0%
 Folli Follie Group                                   2                          0                        0.0%
 Others                                             3,587                      1,242                     66.3%
 Total                                              4,056                      1,310                    100.0%

Source: Euromonitor, DBS Bank

                                                                                                                       .
Page 13
Industry Outlook
Retail (Singapore)

Furniture and household equipment
The Singapore market for furniture and household products grew at a CAGR of 1.2% from 2011 to 2016 to S$2.2
billion. There were a total of 1,422 outlets in 2016. Sales of furniture and household equipment for the next five years
are expected to remain flat at S$2.2 billion. More notably, its non-internet retail component is expected to decline
marginally by a CAGR of minus 0.5% over the next five years, displaced by internet sales. Internet sales for 2016 made
up 3% of total sales and are expected to creep up to 5% by 2021. Homeware and furnishing sales peaked in 2013, in
tandem with the property market’s peak.

1.2% CAGR for Singapore furniture and household sales                                 Remarks
      S$m            Home Improvement and Gardening Internet Retailing
                                                                                      1. Property cooling
                     Home Care Internet Retailing
                                                                                         measures introduced in
    2300             Homewares and Home Furnishings Internet Retailing
                                                                                         2013 have led to sales
                     Home and Garden Specialist Retailers
    2250
                                                                                         decline in homeware and
                                                                                         home furnishing sales
    2200
                                                                                      2. Internet sales will make
    2150
                                                                                         up around 5% of total
    2100                                                                                 sales by 2021

    2050

    2000

    1950

    1900
            2011 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F

 Source: Euromonitor, DBS Bank

Homeware and home furnishing stores are responsible for the majority (around 80%) of Singapore’s furniture and
household sales. A smaller proportion come from home improvement and gardening stores. Internet retail for furniture
and household products contribute 3% of total sales. The prevalence of internet shopping makes it necessary for
retailers with physical stores to evolve to provide a better shopper experience and provide a higher level of engagement
with customers.

Singapore furniture and household product categories 2016                             Remarks

                                 Internet sales                                       1. With the rise of online
                    Home              3%
                 Improvement                                                             retailing, retailers will need
                and Gardening                                                            to look for more creative
                    Stores
                     18%                                                                 methods to engage with
                                                                                         customers when they are
                                                                                         shopping in physical stores

                                                                                      2. Internet retailing comprises
                                                                                         of homewares and home
                                                                                         furnishings, home care
                                                                                         and home improvement
                                                                                         and gardening
                                                    Homewares and
                                                    Home Furnishing
                                                        Stores
                                                         79%

 Source: Euromonitor, DBS Bank

                                                                                                                          .
Page 14
Industry Outlook
Retail (Singapore)

Courts and IKEA are key furniture players in Singapore. Courts Singapore and IKEA are Singapore’s largest furniture
and household players and collectively dominate 35% of the market. Both have large flagship stores and total sales
area of 40,000 to 50,000 square feet. Courts has been deploying experiential in-store product displays to enhance
interaction with customers. It also has solutions-oriented services and high-definition LED screens, digital in-store
signage, modular display tables and magnetic panels for in-store displays as part of the package. Value added bolt-on
services (loyalty programmes, installation, connection, warranty, after sales service, etc.) and customer experience areas
enhance customer engagement and improve customer stickiness.

Singapore furniture and household market share 2016                                     Remarks

                                                         Courts Asia Ltd                1. Furniture market is
                                                             23%
                                                                                           dominated by just Courts
                                                                                           and IKEA

                                                                                        2. Newer entrants are
                                                                                           adopting a low cost model
                                                                                           by cutting warehousing
                                                                 Inter Ikea
                                                                Systems BV
                                                                                           and store expenditure
                     Others                                         12%                    while focusing on online
                      62%                                                                  sales as their key
                                                           TT Int'l. Nobel                 distribution channel
                                                           Design, Home-
                                                               Fix DIY
                                                                 3%

 Source: Euromonitor, DBS Bank

Omnichannel marketing is becoming increasingly more important due to the market’s connectivity to online retail
channels. Market leaders are building up internet retail business to compete with newer entrants. The new generation
of retail stores need to also provide shopper experience and lifestyle elements. Store-based retailers such as Harvey
Norman and TT International have continued to expand selling space while developing their online business
simultaneously despite sluggish sales. For the more established retailers entering the online space, their logistical and
fulfilment functions will need to develop over time if they decide to insource. As online players are able to pass on cost
savings to consumers, pricing should, therefore, become more competitive over time.

Singapore store count 2016                                                              Remarks

                                                                                        1. Property cooling measures
                                                                                           introduced in 2013 have
                                                                                           led to store count decline
                                                                                           from 2012

                                                                                        2. Expect less aggressive
                                                                                           store area increase while
                                                                                           internet retailing of home
                                                                                           products is expected to
                                                                                           increase

 Source: Euromonitor, DBS Bank
                                                                                                                         .
Page 15
Industry Outlook
Retail (Singapore)

Department store
Department stores grew by a flat CAGR of 0.7% from 2011 to 2016. Growth was much higher over 2011 to 2014 at
3.5%. However, in 2015 and 2016, outlets were rationalised with store closures by Metro, Robinson’s, Isetan and
Marks & Spencer. The market size of department stores in Singapore in 2016 was S$2.7 billion with 39 outlets.

0.7% CAGR for Singapore department stores from 2011 to 2016                        Remarks

      S$m
                                                                                   1. Spending in department
    3000                                                                              stores has tracked GDP
                                                                                      growth closely, peaking in
                                                                                      2013
    2900
                                                                                   2. Weak economic
    2800
                                                                                      fundamentals and growth
                                                                                      of online retailing have
                                                                                      resulted in poor
    2700                                                                              profitability and store
                                                                                      closures in recent years

    2600

    2500
            2011 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F

 Source: Euromonitor, DBS Bank

The combination of a slowing economy, high operational costs, a tight labour market, the strong Singapore dollar and
the growing popularity of the online retail scene have led to lower retail sales at department stores. Firms like Al
Futtaim, which owns Robinson’s, Marks & Spencer and John Little, for example, are consolidating and closing off loss-
making stores while looking to expand in lower-cost markets outside of Singapore. Metro closed its Compass Point and
City Square outlets due to their underperformance. Smaller players like BHG and Yue Hwa have instead expanded
between 2011 and 2016.

Singapore department stores market share 2016                                      Remarks
                             Marks & Spencer Yue Hwa
                  Beijing Hualian
                                   5%          1%       Takashimaya                1. Market share evenly
                        5%                                 21%                        distributed among key
                     Metro                                                            department store players in
                      6%                                                              Singapore

             Al Futtaim                                                            2. Smaller-scale players are
                 9%                                                                   expanding while larger and
                                                                                      more established players
                                                                                      with more outlets are
                                                              Mustafa                 downsizing
                 CK Tang                                       19%
                  10%                                                              3. Players with single flagship
                                                                                      locations continue to grow
                              OG                                                      their sales per square foot
                             11%               Isetan
                                                13%

 Source: Euromonitor, DBS Bank

                                                                                                                     .
Page 16
Industry Outlook
Retail (Singapore)

Number of department store outlets has fallen                                              Remarks

          44                                                                               1. Store closures from
          43
                                                                                              Metro, Al Futtaim
                                                                                              Robinson’s, Marks &
          42                                                                                  Spencer and Isetan in
          41                                                                                  2015 due to difficult
                                                                                              operating environment
          40
          39                                                                               2. Those which expanded in
                                                                                              2013 – Isetan, Al Futtaim
          38
                                                                                              Robinson’s and Marks &
          37                                                                                  Spencer – ended up
                                                                                              downsizing by 2016
          36
          35
          34
               2011 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F

 Source: Euromonitor, DBS Bank

In recent years, retailers have been facing the challenge of drawing traffic to their stores to improve sales, as customer
traffic is spread across various malls located in suburban areas and in the city. While promotions help to drive volume
sales, more competitive pricing also lowers margins. Competition with online retailers is also thinning out sales. As such,
retailers such as Yue Hwa, Robinson’s, Marks & Spencer and Tangs have ventured into online retail. The challenge for
these retailers is to integrate their physical and online stores. New retail experiences in stores include interactive in-store
features such as virtual fitting rooms, which allow customers to preview their looks with their selected apparel.

Key department stores’ market share in 2016
 Store                                                        Outlets               Sales psf $               Share
 Takashimaya                                                    1                     1,974                   21%
 Mustafa                                                        1                     3,746                   19%
 Isetan                                                         5                     1,342                   13%
 OG                                                             3                      799                    11%
 CK Tang                                                        2                     1,043                   10%
 Al Futtaim (Robinson’s)                                        4                      810                     9%
 Metro                                                          3                      8,69                    6%
 Beijing Hualian                                                6                     2,363                    5%
 Marks & Spencer                                                9                     1,378                    5%
 Yue Hwa                                                        5                      321                     1%
 Total                                                          39                    1,305                  100.0%

 Source: Euromonitor, DBS Bank

                                                                                                                            .
Page 17
Industry Outlook
Retail (Singapore)

Minimart & Convenience Store
Singapore’s market for convenience stores and independent grocers was S$975 million in 2016, split at 54% to 46%
in favour of convenience stores. There were 607 convenience stores and 583 independent grocers in 2016. The market
size for this segment has shrunk by a 1.2% CAGR between 2011 and 2016, undermined by supermarkets in Singapore.
The alcohol restriction in Little India and after-hours has contributed to the decline in convenience store sales in the
past few years.

Minus 1.2% CAGR from 2011 to 2016 for convenience store and independent                  Remarks
grocer sales

      S$m               Convenience stores    Independent grocers                        1. Market size is undermined
   1,100                                                                                    by growth of
   1,000                                                                                    supermarkets, due to their
                                                                                            increasing convenience
     900
     800                                                                                 2. Split between convenience
     700                                                                                    stores is 54% to 46%
     600                                                                                    independent grocers
     500
     400
     300
     200
     100
          0
              2011 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F

 Source: Euromonitor, DBS Bank

We expect convenience stores to decline over time due to the emergence of supermarkets, which carry a wider variety
of items and can be found conveniently at high-traffic locations. Some even open 24 hours. Supplementing purchases
from convenience stores can now be commonly carried out at supermarkets.

Outlets expected to shrink in favour of supermarkets                                     Remarks
          S$m                                                                  Source:
                         Convenience stores   Independent grocers
                                                                                         1. Independent grocers,
     1,400                                                                                  generally owned by senior
     1,300
                                                                                            citizens, are expected to
     1,200
                                                                                            decline in the coming
     1,100
     1,000
                                                                                            years
       900
       800
       700
       600
       500
       400
       300
       200
       100
         0
                2011 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F

 Source: Euromonitor, DBS Bank

                                                                                                                         .
Page 18
Industry Outlook
Retail (Singapore)

Convenience stores like 7-eleven have moved into more ready-to-eat food and services. They also offer cash
withdrawals, e-commerce payments and collection points for online retail orders. Seating areas have been created in
some stores in addition to the introduction of fresh food items, chilled ready meals and a range of premium products.

Singapore convenience stores’ market share 2016                                          Remarks

                                                                                          1. 7-eleven is the largest with
                                                                                             close to 500 stores

                                                                                          2. Cheers has 90 stores and
           Independent                                                                       iEcon has 29 outlets
              grocers                                         7-Eleven
               46%                                              46%
                                                                                          3. There are 583
                                                                                             independent grocers

                                   iEcon   Cheers
                                    3%      5%
 Source: Euromonitor, DBS Bank

Consumer behaviour. Most consumers among the older generation, with the luxury of time, will purchase fresh
products from wet markets. However, because wet markets operate in the mornings, the grocery shopping alternative
for the working crowd is supermarkets. Supermarkets in Singapore are conveniently located across multiple locations
and enable people to shop after office hours. The role of convenience stores is typically for consumers to supplement
their purchases of grocery and food items – including snacks, medication, personal care items, tobacco, packaged food,
etc. – after-hours. Convenience stores these days have moved away from being publication, alcohol and tobacco
businesses to offer more services, fresh/ready-to-eat/packaged food and other necessities.

Convenience stores in Singapore are mainly controlled by large grocery retailers that also operate other formats of
supermarkets and hypermarkets. These groups have distribution centres and centralised purchasing that enables them
to gain economies of scale and price their products higher at their convenience stores than at their supermarkets for
better margins. Due to the scale of these large players and the credit days given to them by suppliers, it is often difficult
for the large minimarts to compete in terms of pricing and working capital generation. Unlike listed players, smaller
independent grocery retailers do not have economies of scale in terms of volume. They are typically offered poorer or
no credit terms by the suppliers.

                                                                                                                            .
Page 19
Industry Outlook
Retail (Singapore)

Online Retail
Singapore's internet retailing market was estimated to be worth S$1.5 billion in 2016. Growth has been robust at a 22%
CAGR for the past five years and the market is set to grow further by another 18% CAGR from 2015 to 2021. Growth
has been led by apparel and footwear, personal accessories and food and beverage. Going forward, the growth of the
internet market is expected to be driven by apparel and footwear, food and beverage, and media products.

22% CAGR growth for Singapore online sales from 2011 to 2016                        Remarks

     S$m
                                                                                    1. Internet retail is expected
   3500                                                                                to grow exponentially at a
                                                                                       CAGR of 18% from 2015
   3000                                                                                to 2021

   2500                                                                             2. Growth to be led by
                                                                                       apparel and footwear,
   2000                                                                                and media products

   1500

   1000

     500

          0
                2011 2012 2013 2014 2015 2016F 2017F 2018F 2019F 2020F 2021F

 Source: Euromonitor, DBS Bank

Market leaders in Singapore include Giosis Group’s Qoo10, which recorded sales of S$500 million in 2016 and
completed close to 15 million transactions in 2015. At the end of 2016, Qoo10 had a total of 2.2 million registered
shoppers, becoming the largest online marketplace in Singapore. The majority of Qoo10 customers are women, with
an average age of 27. Others like Lazada have 5.7 million daily visitors to their sites.

Singapore online market share 2016                                                  Remarks

                           Others                                                   1. Market dominated by less
                            26%                                                        than ten players
                                                                 Giosis Group
                                                                    33%
                                                                                    2. Giosis Qoo10, Rocket
                                                                                       Internet’s Zalora, and
                                                                                       Apple’s online sales
                                                                                       dominate over 50% of
                   Asos Plc                                                            Singapore online sales
                     3%
              RedMart Pte Ltd
                  3%                                                                3. Rakuten shut its Singapore
                                                                                       website in 2016 and
                Amazon.com Inc
                     7%
                                                                                       moved into a consumer-
                                                            Apple Inc                  to-consumer business
                        Reebonz Pte Ltd                       12%
                             7%           Rocket Internet                              model
                                              GmbH
                                               9%

 Source: Euromonitor, DBS Bank

                                                                                                                      .
Page 20
Industry Outlook
Retail (Singapore)

The Singapore online market will be driven by the consumer’s ease of access to (i) cheaper and wide-ranging products;
and (ii) convenience of payment and delivery services. Retail brands are increasing their collaboration with platforms
such as Lazada and Qoo10 as an alternative channel to target customers. Retailers including Watsons, Samsung,
Xiaomi, Lenovo, HP, Best Denki, Gain City and Audio House have partnered with Lazada to have their products sold
through the platform. There has been an increase in importer/online retailer type start-up companies fuelled by higher
demand for online shopping. These companies put their products up for sale at online marketplaces and fulfil
purchases via a delivery or self-pick-up mechanism. Marketing through social media has also grown in importance as
consumers increasingly conduct reviews, feedback, recommendation and research through this mode. Larger retailers
and brands tend to have their own websites through which they conduct e-commerce, unlike smaller start-ups that
leverage online marketplaces to trade.

Singapore online category breakdown 2016                                               Remarks

                                                       Apparel and                     1. Marketplace platforms
                                                        Footwear
                                                                                          like Lazada offer 17
                                                          21%
                                                                                          categories of goods
                  Others                                                                  including apparel and
                   37%                                                                    footwear, and
                                                                                          consumer electronics,
                                                                                          from over 5,000
                                                                                          merchants

                                                                 Media Products
                                                                     16%

                     Consumer
                      Health
                       3%                                 Personal
                          Consumer
                                                       Accessories and
                          electronics Food and Drink
                                                          Eyewear
                             4%            9%               10%

 Source: Euromonitor, DBS Bank

Our In-House Experts
Andy Sim
SVP, Group Research
andysim@dbs.com

Alfie Yeo
AVP, Group Research
alfieyeo@dbs.com

Please note that DBS Bank Ltd may have research coverage in the companies mentioned in this industry report, that
have been produced prior to or subsequent to its publication. Please refer to the links below for the latest specific
equity research reports published on below-mentioned companies and the accompanying disclaimer/disclosure of DBS’
interest in the companies mentioned in the respective reports.

                                                                                                                     .
Page 21
Industry Outlook
Retail (Singapore)

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Page 22
Industry Outlook
Retail (Singapore)

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 United States         This report was prepared by DBS Bank Ltd. DBSVUSA did not participate in its preparation. The research analyst(s) named
                       on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research
                       analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject
                       company, public appearances and trading securities held by a research analyst. This report is being distributed in the United
                       States by DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S.
                       Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as
                       DBSVUSA may authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred
                       to herein should contact DBSVUSA directly and not its affiliate.

 Other jurisdictions   In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified,
                       professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.

                                                                    DBS Bank Ltd
                                               12 Marina Boulevard, Marina Bay Financial Centre Tower 3
                                                                 Singapore 018982
                                                                 Tel. 65-6878 8888
                                                          Company Regn. No. 196800306E

                                                                                                                                                         .
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