• Abhijit Maheswari

It is hard to find a more predictable country than Singapore

Updated: Feb 21

Don’t we all love predictability in the market. Agreed, some will find volatility more profitable. We all knew Singapore is stable, few outsider will consider this as the condition for predictability. Data scientist can’t have a simpler job than this. And how did I come to this conclusion ? By looking at its retail and food sales over last 5 years. I could be guilty of jumping to this conclusion with single dimensional data. Yet, at a cultural level, many of you who have been to this city country Singapore, will not disagree with me. There is certain order in which Singapore likes to run its economy, policy, governance and society. By looking at the charts, one can say they have done a fine job.




Observe the sales figures — What you see is a flat line and with seasonal pattern; compare this with India's consumer trend in food. It cannot get more predictable than this. The retail sales averages around SGD 3800 Million per month while food sales is sticky around SGD 730 Million per month. These are pre-pandameic statistics. The retail and food sales follow the line like a German shepherd following his master, closely chugging along, veering off occasionally only to join back. Sales are climbing back after the steep fall between March and June of 2020. Going by the last couple of months data, the momentum in the demand pickup is expected to continue well into 2021.


Taking a step further: Among all the food business, fast food is a clear standout. Fast food has been growing more than any other segment even before the pandemic. Fast food’s drop was shallow with a quick recovery. Food caterer’s have been most affected and looks like they need out-of-box thinking and wait for the normalcy to return. Even if you are not in food and its related business, you will have a use of this insight to tell you about some other business. For example, to use this insights that fast-food’s break-away trend from other food types, will cause a similar trend in fast-food related problems — obesity, hearth conditions etc. Often when we don’t have direct data, we can use alternative data/proxy to come to a reasonable conclusion.




Online vs offline sales


Online food sales has doubled from 10% in 2019 to 20% by Dec 2020. At the height of pandemic, it touched 45% of all food sales. It is significant though this was anticipated. But adoption of technology will outlast the epidemic. Because we suspect new consumers are on board the digital commerce and would have used an app to order food for the first time. We predict the digital sale/online sales of food to be between 18–22% in the near term and around 25% in the medium term (3–5 years). A large population of Singapore is over 65, if they have got comfortable ordering food online during the pandemic, then the food delivery business will change in ways not anticipated.




Why Singapore will break this trend this year (become less predictable)


Tourists have started to trickle, but it’s nowhere near the average of pre-covid years. Since food and retail sales are highly correlated with tourists flow, the food sales will pick up as visitors counts get close 2019 levels. If we compare the tourist flow, at 25,000 visitors in December 2020 is way off from the average, but the retail sales in December 2020 is hair close to 2019 average. We should expect the retail sales to cross in March 2021 and stay above the mean for the full 2021, when tourists return and start splurging on shopping and dinning. One notices similar rush to eating out and shopping from other big cities where lock down was lifted and infection spread stayed muted.




Straying for a second, did you notice Singapore got more female than male tourists in last half of 2020 ?


So why is Singapore predictable ?


The country is small. It’s unique history, geography and leadership bought the country close together. Despite multi-ethnic and diverse representation of its resident, the country has created this ‘unspoken’ culture which most of the resident and visitor happily adopt, making it very homogeneous in their collective thinking. But here we have tried to reason it from its food and retail consumption. Singapore imports 90% of its food requirement. With little arable land, its no surprise. As a structured society with lot of uncertainty taken away for them — in terms of job security, housing, famine, hunger, corruption and other similar ills. And this allows the locals to plan their life and it reflects on their spending on food and general consumption. The rhythmic spikes are caused by the tourists spending, an external factor. Singapore has taken lot of steps to make it a round-the-year destination to smooth out the spending. Therefore one will see short term swings but you see the trend as a flat line over long time scale. 2021 will be a test. My money is on Singapore shooting past this predictable line and staying there.


Data: Department of Statistics, Singapore