Singapore Footwear Analysis

Chapter 2 Market Analysis 2. 1. 1 Footwear Market Size The global consumption of footwear showed a steady growth between 2004 and 2007 but the global recession caused output volumes and consumer spending across a wide range of products, including footwear, to weaken in 2009. The USA, EU and Russian markets contracted in 2008 after good growth. Whereas the Asian and Brazilian markets continue to grow as a rising number of low-middle class people replace their flip-flops by closed shoes. A more important driving force to the global footwear market is the fast growth of very affluent people in the emerging economies buying luxury footwear.

In 2008, the global footwear market was estimated at USD 201 billion and 7. 3 billion pairs, an annual average growth of 1. 4%, compared to USD 190 billion in 2004. The rising number of workingwomen, the trends towards casual footwear, the increasing affluence, and footwear as a fashionable status symbol, growing awareness about healthy and active lifestyle, rising population and disposable income levels, were driving this growth. According to a new market report published by Transparency Market Research, the global footwear market was worth USD 185. billion in 2011 and is expected to reach USD 211. 5 billion in 2018, growing at a CAGR of 1. 9% from 2011 to 2018. Global spending is expected to be moderate in 2012, as industry revenue for the Global Footwear Manufacturing industry increases by 2. 2% in the current year to total USD 122. 9 billion, up from USD 107. 4 billion in 2007. This represents annualized growth of 2. 7% in the past five years. As consumer spending power in the United States, Europe and other parts of the world steadies, demand for basic, non-discretionary footwear will continue to remain low.

Furthermore, Transparency Market Research also stated that, in the overall global market, Asia Pacific is expected to maintain its lead position in terms of revenue till 2018. It is expected to hold the largest share at 42% with 30. 1% of the global footwear market revenue share in 2018 followed by Europe with 21% of market share. 2. 1. 2 Footwear Market Segmentation The footwear market is segmented into Men, Women and Children. Women’s footwear, excluding athletic footwear makes up the industry's largest product segment, with an estimated 26. 3% of industry revenue in 2012.

Order custom essay Singapore Footwear Analysis with free plagiarism report

450+ experts on 30 subjects Starting from 3 hours delivery

Get Essay Help

Due to rise of economic independence and demand, new products are being launched more frequently in the women’s footwear segment than the men’s and children’s sections. There is a large variety of footwear for women, which are categorized by types and styles. Most types of them are designed for specific activities but, on the other hand, in the same activity, there have many styles in it. For this reason, both of the categories are somewhat overlap. Therefore, in this chapter, women’s footwear is categorized into types as followed: * Athletic shoes * Boots * Casual shoes * Comfortable shoes Dress shoes * Job-specific shoes * Office and Professional * Sandals * Specialty and Special Needs 2. 1. 3 Footwear Market Growth Rate Packaged Facts expects the global footwear market to grow at a substantially slower clip between 2008 and 2013 compared to previous years. The global economic environment will likely put a damper on consumer spending putting pressure on all measures of the footwear including frequency of purchase, unit consumption and pricing. Regionally, markets will be affected to varying degrees and at various points in time as the global economic slump orks its way through international markets. For instance, the Asia-Pacific region may take longer to slow down and may not be as severe as other regions. Global Footwear Retail Market Forecast, 2008-2013 (in billion $) Source: Packaged Facts On a unit volume basis, Packaged Facts expects global unit volume consumption is expected to reach 12. 1 billion pairs in 2013, which is equal to 3% growth thereafter the United States and Europe return to more modest growth rates and emerging economies see consumption rates rise. Global Footwear Retail Unit Volume Forecast, 2008-2013 (in millions of pairs)

Source: Packaged Facts As a whole, the footwear Industry is in the mature stage of its life cycle. The number of producers is rising and there is still positive growth in both industry revenue and value added. However, the barriers to entry are not insurmountable. Since global population continue to increase, World Resource Institute expected world population to rise five-fold in 2050, and footwear is a product required by most customers in the world, therefore, a base level of footwear purchases will repeatedly exist. 2. Singapore Market – PEST Analysis In this chapter, PEST analysis is used to assess the current in Singapore market. Political and Legal, Economic, Social and Technological factors are examined and described. Before starting up new business in oversea, location is one of the important issues, which we have to seriously consider. As the crisis in both the US and Europe are affected the economy all around the world, Asia market is still in good condition besides it is easier for business to succeed when operating in a healthy business environment.

As for Singapore, The World Bank-International Finance Corporation (IFC) has ranked it as the easiest place in the world to do business and ranks as the world’s top logistic hub. Singapore has stable, diversified, growing and supported by regulatory environment that is transparent and balanced. As a result, Singapore succeeding became one of the world's most prosperous countries with strong international trading links and with per capita GDP equal to that of the leading nations of Western Europe. 2. 2. 1 Political and Legal factors

Due to the government who has set up several organizations in helping the business system, in The 2011 Index of Economic Freedom, Singapore is ranked as the second freest economy in the world. According to the Corruption Perceptions Index, it also shows that Singapore is an enterprise friendly country as it consistently ranked as one of the least corrupt countries in the world. Moreover, In Singapore, the state has taken on the role of promoter and practitioner of Corporate Social Responsibility, a logical development in view of the dominant role of the government in the local economy.

The Economic Development Board Act exists to stimulate the growth, expansion and development of Singapore’s economy. Likewise, the emphasis of the regulatory policy of Singapore Ministry of Finance (MOF), which related with Companies Act, Business Registration Act, Accountant Act and Currency Act, is mainly focusing on development rather than control. These benefits help offering a healthy business environment for both local and foreign invertors. Singapore’s government also has great influent on business environment by providing well-served air, sea and telecommunications connectivity.

One of the most essential connectivity is broadband network, which is sufficient for every business need. Singapore has one the world’s busiest port, with the hub for about 400 shipping lines to more than 700 ports worldwide. Not only seaport facilities, Singapore also has Singapore Changi Airport, which is renowned as worldwide leading air hub for its efficiency and excellent services in cargo handling. The congregation of superior infrastructure and global industry professionals has made Singapore of the best destination of doing business. . 2. 2 Economy factors According to the Ministry of Manpower of Singapore, in the past decade, Singapore’s economy grew by an average of 5% per annum. Singapore's small population and dependence on external markets and suppliers has pushed it towards economic openness, free trade and free markets. This, as well as government policies that patronize economic development, have been key success factors in Singapore's historically strong economic performance. Singapore has a highly developed market-based economy.

It is open and has corruption-free environment, stable prices, and a per capita GDP higher than that of most developed countries. Singaporean economy depends heavily on exports, information technology products, pharmaceuticals, and on a growing financial services sector. Real GDP growth averaged 5. 9% between 2007 and 2011. According to a report published by the World Bank, Singapore’s Gross Domestic Product was USD 239. 70 billion in 2011, about 0. 39 % of the world economy. Singapore GDP Source: www. tradingeconomics. om / World Bank Singapore is also known for low tax regime. The personal income tax rates start from 0% and are capped at 20% for residents while non-residents are taxed at a flat rate of 15%. The corporate income tax rate in Singapore is approximately 8. 5% for profit up to SGD 300,000 and a flat 17% above SGD 300,000. The GST or VAT rate is 7%. Moreover, there is no dividend tax, no estate duty, and no capital gains tax. The economy contracted 1. 0% in 2009 as a result of the global financial crisis, but rebounded in 2011.

Over the longer term, the government hopes to establish a new growth path that focuses on raising productivity. Singapore has attracted major investments in pharmaceuticals and medical technology production and will continue efforts to establish Singapore as Southeast Asia's financial and high-tech hub. Share of GDP by industry Source: Department of Statistics Singapore As from the graphs above, even vary along with global economic situation, Singapore’s economy is considered as one of a great place to invest with strong emerging economy in every business sectors. . 2. 3 Social factors According to Department of Statistics of Singapore, the total population was 5. 31 million as at end-June 2012. There were 3. 82 million Singapore residents, comprising 3. 29 million Singapore citizens and 0. 53 million permanent residents, and 1. 49 million non-residents. Female residents outnumbered their male counterparts in Singapore further. The sex ratio was 970 males per 1,000 females in 2012. Chinese formed the majority at 74 % of the resident population, followed by the Malays with 13 % and the Indians with 9. %. The proportion of Singapore residents aged 65 years and over rose from 9. 3 % in 2011 to 9. 9% in 2012. Sex Composition of Resident Population Source: Source: Manpower Research and Statistics Department, Ministry of Manpower, Singapore Age Distribution of Resident Population Source: Source: Manpower Research and Statistics Department, Ministry of Manpower, Singapore Singapore Residents by Age Group, Ethnic Group and Sex, June 2012 Source: Source: Manpower Research and Statistics Department, Ministry of Manpower, Singapore

Singapore Manpower Research and Statistics Department also stated that Singapore Nominal incomes rose strongly in 2011, amid a tighter labour market with more residents employed in both professional, managerial, executive ; technician (PMET) and non-PMET jobs in 2011. The median monthly income from work of full-time employed residents rose by 8. 3% over the year to USD 3,249 in 2011, Taking headline inflation into account, the median income rose in real terms by 3. 1% in 2011. Distribution of Resident Labour Force by Age, 2001 and 2011 (As at June)

Source: Manpower Research and Statistics Department, Ministry of Manpower, Singapore 2. 2. 4 Technology factors As Singapore proceeding into globalization and networked economies where competition and collaboration are in the same page, the presence of a strong technological infrastructure is crucial and unavoidable. The changes of technology are not only refer to the changes in production techniques, production equipment and communication, it also leads to improvement of production and services as well. Besides, it helps speeding up the movement of the information including improvement of the analysis information.

Singapore’s extensive infrastructure set up is one of a fundamental attractiveness for foreign investment. According to the 2010 Infocomm Usage by Households and Individuals Survey, Singapore has put in place an advanced and reliable Infocomm infrastructure that has met the needs and demands of the economy and society. The proportion of resident households with Internet and broadband access at home reached 82%. The National Infocomm Infrastructure (NII) started as a key initiative of the IT 2000 Master Plan, with the building of a high-speed nationwide broadband network as a major milestone in its development.

Again, Singapore has also grown to be one of the major global telecommunications hubs in the region and is well positioned as a hub for international capacity. Over the last few years, Singapore has also grown to be a trans-cable hub where regional submarine cable systems and international cable systems interconnect. In addition, Singapore government also emphasizes on its strength and makes the most of its electronic performances by providing useful resources and information online.

For example, the Custom Office of Singapore provides e-service transactions through its website in order to facilitate all investors and remain as a global trade hub trusted by foreign trading partners and business operating in Singapore. 2. 2. 5 Conclusion From the factors analyzed above, it can be concluded that Singapore government has play an important role on its business success both domestic and international. With government’s policies, it has created an enterprise-friendly environment for invertors worldwide.

Singapore extensive connectivity, together with a pro-business environment and legal and regulatory framework, make it an ideal circumstance for doing business. 3. Market trend Howard Davis, a professor of footwear design at Parsons School of Design, told Footwear News in 2005, "Self-adjusting shoes will be shoes of the future because the consumer will demand real and serious comfort. " Not only comfort, the industry’s demand is primarily driven by fashion and demography. Newcomers with more fashionable product may thrive at the expense of a fading rival.

The profitability of individual companies depends on their ability to design attractive footwear lines and remain at the forefront of consumers' consciousness. Consequently, designers attempt to combine comfort and style by using new technologies, with predictions that customized fit could be soon become more popular and more widely available. As for Thai footwear trend through the world financial crisis, the Department of Export Promotion has assessed the impact and suggested that Thai firms has to seek for new market replacement in order to gain and maintain market share apart from European and US market that are in their downturn.

Other than maintaining the share, Thai firms have to be prepared to reap the opportunities from new impact of economy under the Asian Economic Community (AEC) in 2015. 4. Key Success Factors In order for March Shoes to accomplish its marketing objectives, the key success factors are the elements that are highly necessary. There are a few factors include: * Access to distribution channels * Access to targeted market * Understand actual customer behavior The key success factors might be changed from time to time, the company must continue to plan ahead beyond present needs, and keep pace with rapid technological changes.

Don't let plagiarism ruin your grade

Run a free check or have your essay done for you

Check my essay Hire Writer