With more money in their pockets, many consumers are trading up for products and services they couldn’t previously afford. As compared to five years ago, 40% of Singaporeans have spent more on groceries, 38% on dining out, and 35% on travel.
“Singaporeans are becoming more affluent and are displaying a hunger for more premium products and upgrade within their purchasing capabilities,” said Joan Koh, Managing Director, Nielsen Singapore and Malaysia. “Consumers are no longer looking for products that fulfil their basic needs. Instead, they are going with brands that provide a personalized experience, an identity that they can relate to, and an offering that’s specialized, enhanced and exclusive, without compromising on the quality and performance in their products.”
SINGAPOREANS DEFINED PREMIUM BY MORE THAN PRICE
Singaporeans defined premium products in a myriad of ways. Most common to all, 61% of respondents cited that they considered a product to be premium if it were made with high-quality materials or ingredients. 46% of locals mentioned about a product offering superior function or performance as premium. 45% defined a premium product as one from a well-known or trusted brand name, while 36% prescribed it to superior design or style.
These sentiments mirrored the willingness of locals in paying a premium price for products that offered certain attributes or benefits. 88% of Singapore consumers were highly or somewhat willing to pay a premium for products that came with high-quality/safety standards. 87% were also highly or somewhat willing to do so for products that provided superior functions or performances. 84% also shared the same sentiments towards products that offered something that others in the market did not provide. A sustainable product also appealed to consumers as 83% and 82% of the respondents would pay more for products that contain organic ingredients and environmentally friendly materials respectively.
FEEL-GOOD EMOTIONAL DRIVERS
Consumers bought premium products for a variety of reasons. 39% of respondents strongly or somewhat agreed that they bought premium goods because they were worth the money, or because it made them feel good about themselves. 36% of locals highlighted that buying premium products made them feel confident.
“For a product to successfully draw in the crowd and cash in the purchases, the functional and emotional benefits must exist coherently in its value proposition and shopper journey,” added Joan.” “Consistency is imperative and brands must always deliver on their promise to consumers to justify the price premium. Winning the consumers’ hearts and minds will encourage repeat purchase, build loyalty and reinforce the brand’s differentiation amongst competition.”
WHAT AND WHERE DO SINGAPOREANS BUY PREMIUM PRODUCTS
Survey findings revealed that there was a diverse spread of categories with premium potential among Singaporeans. Personal electronics and clothing/shoes topped the list for products that consumers were willing to trade up for (cited by 34% and 32%, respectively). Following which, locals ranked third their willingness to trade up for better meat or seafood (26%). Personal care products such as vitamins (25%), hair care (24%) and cosmetics (23%) were also highlighted by respondents.
Where did Singaporeans shop for premium products? 72% of consumers mentioned that they typically purchased them in-store, from a retailer in Singapore. 26% and 25% both said that they bought them online, but from a retailer in Singapore and an overseas/cross-border retailer respectively.
Download the report now to see the how consumers from around the world are going premium and purchase the Singapore report at the Nielsen Store.