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Business Advice

S'pore shines as consumer business hub

Leading conglomerates move key functions like global management of their brands here
The Straits Times - August 1, 2011
By: Aaron Low
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S'pore shines as consumer business hub -- ST FILE PHOTO

SHOPPERS around the world know the beauty products SK II, Lux and Pond's but few know that these blue-chip brands are developed, managed and marketed from Singapore.

It is not a one-off development. Leading consumer companies have been increasing their presence in Singapore, moving key functions such as global management of their brands here.

Led by consumer conglomerates Unilever and Proctor & Gamble (P&G), the consumer business sector has been rapidly expanding over the past three years, said the Economic Development Board (EDB).

Estee Lauder, Nestle, Kraft, Levi's and Chanel also have also a strong presence here.

Some are using Singapore as a second headquarters as demand for consumer goods in Asia is tipped to explode.

According to the Organisation for Economic Cooperation and Development, Asia's consumer goods market - it covers everything from cosmetics to foodstuffs, fashion and electronics - will more than double to US$56 trillion (S$67.3 trillion) by 2030.

The EDB wants more companies to set up base in Singapore to engage in a wide range of business activities, in turn opening up a new dimension for the local economy.

Its executive director for consumer business, Ms Kwee Eng Thien, said the EDB's goal is to get 10 major companies to set up 'business homes' here by 2020.

Ms Kwee cited both Unilever and P&G as examples.

Unilever, based in Mapletree's business city at Alexandra, manages about 40 per cent of its €44 billion (S$76 billion) business from Singapore, overseeing markets in Asia, Africa, Central and Eastern Europe, said Unilever's senior vice-president of market operations, Mr Rohit Jawa.

Several of its personal care brands such as Pond's, Clear, Lux are also managed from Singapore.

It also has outfitted its office with state-of-the-art research tools, such as a virtual shopping simulator and a mock-up of a supermarket, to help understand consumer behaviour.

Likewise, P&G has a dedicated consumer and market knowledge unit here studying key consumer trends in Asia.

This then feeds into the development of new products, said its vice-president for consumer and market knowledge, Mr Kirti Singh.

For instance, one the region's leading beauty brands, SK II, is globally managed from Singapore.

Research is carried out in its key markets and funnelled back to the team here, whose members see how best the product can meet the demands of their customers, he said.

'This is part of the company's deep commitment to understanding our consumer.'

The benefits to Singapore are obvious.

Apart from adding about $534 million to the economy in the past year alone, these firms are also hiring to fill their ranks, said the EDB.

P&G, for example, employs about 1,600 people here, up from a few hundred a few years back.

There will be spin-offs for the consumer research sectors here, said Ms Kwee.

'They bring more advertising and research business to Singapore, which then encourages advertising firms, research firms to expand here, hire more people,' she added.

The biggest attraction for the senior management is the proximity to key markets in Asia and the stability it provides for the operations to continue here, said Mr Bill Kelly, Estee Lauder's senior director for store design and visual merchandising.

'It's a few hours from wherever we need to be. And yes, it's not China, where the market is biggest, but it's a lot cleaner, more stable and I would much prefer to be working here,' he said.

Mr Jawa added that Unilever's Singapore office plays a crucial, unique role for the company.

'We have a deep presence in major markets such as China, India as well as Russia and Indonesia simply because these are such important operations in their own right,' he said.

'However Singapore offers us the ability to step back and look at the total region's growth strategy from a vantage point, and plays a critical role in allowing us to coordinate our activities.'

aaronl@sph.com.sg

Consumer research institute to be set up

HOME TO BIG NAMES

Household and personal care
Unilever, L'Or?al, Johnson & Johnson, Kimberly Clark, Estee Lauder, Reckitt Benckiser.

Food and nutrition
Nestl?, Kraft, Coca-Cola, Danone, Suntory

Fashion
LVMH, Gucci, Chanel, Hermes and Levi's

Flavours and Fragrances (F&F)
Givaudan, IFF, Takasago, Firmenich and Symrise

P&G IN S'PORE

 

  • Regional headquarters for operations in Asia Houses most of P&G's regional business units and regional functions
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  • Also runs perfume plant manufacturing facility in Tuas (photo) and customer service centre in Alexandra Road
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  • Employs more than 1,600 people of 20 different nationalities
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  • Invested $250 million in January to build mega innovation centre at Biopolis. The 32,000 sq m facility, due for completion in 2013, will make P&G the largest private sector representative there
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