Predicting Singapore's dying consumer industries in 2018

Singapore economy has undergone tremendous change over the past few decades. From one that is highly focussed on manufacturing in the 1970s, we have evolved into R&D in the 1980s, biomedical in the 1990s and is still emphasising very much on R&D albeit at a much broader scale than before.

And these are generally driven by new government initiatives as they continue to find new pillars of growth for Singapore. The timeline and information I just shared was taken off EDB's corporate website.

You can easily find out which industries will grow or prioritise, from the full-page colourful advertisements in newspapers. But what about the ones that you should avoid?

Industries on deathbed

As much as the government tries to keep things within their control, globalisation has made that task harder than decades before. Just look at the electronics manufacturing cluster. It was our crown jewel in the 1980s.

Since then we have improved leaps and bounds to become faster and better in making these components. But still that sector is declining.

According to EDB monthly manufacturing performance report in July 2015, output of the electronics cluster fell 5.8% year-on-year in July 2015. Cumulatively, output of the electronics cluster declined 2.3% from January to July this year, compared to the same period last year.

We could throw more money at the problem but nothing is going to make our products cheaper than the ones made by our neighbouring countries who can outcompete us on costs control. Even if we could compete on price, attracting younger talents into the sector is probably as easy as trying to convince them to become hawkers.

Time to move on

I hope you don't take it that I'm demeaning these roles in any way. In fact I have huge admiration for the people who are undertaking them.

But we are also personally grooming and convincing our young not to take them up even if that industry and role had benefited us. I hear it all the time of legendary hawkers who put their kids through university so "they won't have to repeat father's fate."

Then again it is this "fate" that allowed their university to be funded. Regardless, we can't fight the tide of change.

NTUC has acknowledged that 60% of our population will be Professionals, Managers, and Executives (PMEs) by 2030. Which is e2i is also evolving to take care of that growing market.

So in view of all these factors, I like to share my take on industries that might be a step closer to their coffin in a few years' time.

If you happen to be in any of these industries, you might like to do an inventory check. Don't just take my word for it. Do an objective assessment since you should have better understanding of the industry than me.

1. Departmental stores

I am referring to the likes of major ones such as Isetan and Metro. Isetan is stopping their operations at their Wisma flagship store and Metro has shut down theirs in Sengkang.

With the growing presence and popularity of ecommerce, cost-heavy departmental stores are finding it hard to compete on price and attention. Even Metro has jumped onto the bandwagon with Metro Online. But I don't think online income is going to help pay for all the bills.

2. Print

Cosmopolitan Singapore is closing down after four years of operations. According to the Nielsen Media Index 2014, Cosmopolitan Singapore's readership stood at 22,000. The low numbers won't attract advertisers and things just slide down from there.

And before we could begin to mourn for Cosmopolitan, the same kind of news came from FHM magazine. According to Gilles Demptos of WAN-IFRA, newspapers around the world faced a 13% decrease in print advertising revenue from the period of 2009 to 2013, while digital increased 47% increase over these 5 years.

And the increase in digital revenue is currently unable to cover the shortfall in print revenue. Specifically, for every $1 gained in digital, $7 is lost in print revenue.

3. Travel agencies

When was the last time you engaged one? Or did you rather go online, read a few peer reviews, and book it via zuji or agoda? With major players such as Five Stars and Asia-Euro exiting, it is an obvious sign on where the industry is heading.

You just can't beat the simplicity, convenience, and lower cost of making the same arrangement on your desktop or mobile phone. Again the high cost of rent and payroll makes it really hard for these companies to compete with online alternatives.