With small domestic market, S’pore must attract tourist dollar

I refer to the letters, “Retail scene here lagging behind regional rivals” and “Local retail businesses struggling with high costs” (both March 23).

We may perceive that most of the shopping centres, especially in the city area, have high rents, but we must also study the other side of the coin to find out what contributes to this.

Before going into business, vendors should do their homework by comparing all the business risks and opportunities. Inevitably, assessing the fixed and variable costs required to operate is crucial. Hence, making a decision about the rental for a lease is one of the key business processes.

Quite a number of shopping centres in Orchard Road have housed the flagship stores of top brands and high-end fashion for years, so why and how they can survive with the high rents is a mystery we must analyse.

While retail rents in Hong Kong, Shanghai and Tokyo are higher, Singapore’s domestic market is relatively small, limited and can hardly be sustained by its population. Hence, we must perpetually attract millions of tourists for leisure and shopping.