Singapore & Hong Kong: muncipal programs

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Singapore & Hong Kong: muncipal programs

The large number of small and medium-size retailers in Singapore can be attributed largely to urban planning policy since the 1960s, the government embarked on a massive programme of public low-cost housing for Singaporeans. Usually such facilities were constructed outside the cities and hence a local daily grocery retailing system also emerged. This culture then gained further momentum and became a prominent retail format in Singapore. By 1970s the centre of Singapore was experiencing massive congestion and dilapidation,and the streets were clogged by traditional retailers. Thus, in the 1970s and 1980s, the government instituted a major land use policy that provided incentives, mixed with zoning rules, for hawkers, small shops, and wet markets to move to the suburban areas and supermarkets to grow in the central areas. They provided cash grants for traditional retailers who were not profitable to transition to other employment .

Today the Singapore government views small shops and hawkers as integral parts of the Singapore food economy,along with supermarkets and wet-markets. The essence of the government’s strategy is “cherish but upgrade and modernize.” In 2001, the government launched its 10-year Hawker Centers Upgrading Program. By 2005, 71 hawker centers had been selected for upgrading: 35 had been upgraded and 36 were in progress. Temporary markets are built to maintain the hawkers while the original hawker areas are razed and rebuilt into areas with better comfort and ambiance: new tables and chairs, wider passageways, drier and cleaner floors, improved ventilation, refurbished toilets, better lighting, and improved layouts. Consumers responded strongly to the upgrading.

The Singapore government also has a program called SPRING Singapore; the acronym stands for the "Standards, Productivity, and Innovation Board", and the programme is designed to promote modernization among clusters of small retail shops. The government sees the retail sector as a breeding ground for entrepreneurs that can extend into other business lines. However, most of Singapore’s 17,000 retailers are tiny shops, operating on tiny margins and without capital to invest in marketing and management. They found the value added per worker was less than 30 % of that of a worker in manufacturing because of rising costs, lack of training,lack of “differentiated strategies,” and poor alignment of strategies among actors within retail clusters.

The Singapore view is that poor retail reduces the competitiveness of non-retail businesses and of the overall economy.

In 1992, the Singapore government launched a program to upgrade small retailers by offering financial assistance and training programs and encouraging small retailers to form shop-owner associations (buying co-operatives) and to purchase products in bulk to lower costs. In March 2001, the government launched a 10-year strategic plan aimed at transforming the retail sector in Singapore. Called Retail 21 and managed by SPRING Singapore with a consultative group of retail association members, the program offers logistics and other support services considered part of a competitive cluster: product design,advertising, transportation (including home delivery), real estate,financial services, information technology, supply chain, suppliers,tourism, and manufacturing.

…The program pursued three strategies:

(a) improve operational efficiencies by forming collaborative business alliances among the key players in the value chain (e.g., better aligning retailers and suppliers);

(b) foster differentiated strategies to move beyond traditional retailing and price competition towards product innovations and marketing; and

(c) minimize rules and regulations to reduce business costs. To pursue these strategies, the government set up the Retail Academy of Singapore that focuses on encouraging retailers to be innovative, to raise their standards of professionalism, and to develop a cluster development approach.

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