U.S. export efforts bearing fruit in Singapore and Malaysia - fruit industry

AgExporter, July, 1991 by Bonnie Borris

U.S. Export Efforts Bearing Fruit in Singapore and Malaysia

Singapore and Malaysia offer U.S. fruit exporters a wealth of opportunities. As in many Southeast Asian countries, people in Singapore and Malaysia have a strong fruit eating tradition that extends beyond such exotic regional fruits as durians, pomelos and rambutans to such well-known temperate fruits as grapes, apples, strawberries and cherries. Promoters of U.S. produce should be aware of Singapore's and Malaysia's market structures and keep in mind local shopping habits when designing advertising campaigns and point-of-sale materials. Unlike U.S. consumers who shop for most of their fresh produce weekly at the supermarket, Singaporeans and Malaysians purchase most of their fresh fruit needs at small, traditional markets on a more frequent basis. The market structures in both Singapore and Malaysia are characterized by many players with no individual company or organization dominating or controlling imports or distribution.

An Import-Dependent Market

Singapore is highly dependent on fruit imports. Domestic output is limited to a small quantity of tropical fruits. Consequently, Singapore's imports of fresh fruit have grown significantly over the last few years. In 1990, Singapore imported US$220.1 million worth of fruit, an 8-percent increase over 1989. Fresh fruit imports from the United States rose to US$58.1 million, a 9-percent increase over 1989. The major fruits imported from around the world were apples, oranges, pears and quinces. The bulk of U.S. fruit exports to Singapore was comprised of apples, oranges and grapes. Singapore's distribution system for fresh fruits is remarkably open and transparent. It is made up of many players selling goods throughout the chain (see chart). A large number of importers bring in produce from the United States; larger supermarkets import some commodities directly to ensure quality and proper supply. Many major importers also act as wholesalers and distributors for the produce. The wholesale market is made up of many players who sell to the retail outlets and the food service industry. These wholesalers also sell odd lots and individual pieces to the end-user.

Fruit Sold in Three Ways

The retail market for fresh fruits in Singapore is divided among traditional wet markets, fruit stores and supermarkets. Nearly 85 percent of all fresh produce is sold through the wet markets and fruit stores. The wet markets are comprised of individually owned stalls grouped together where hawkers sell everything from fruits and vegetables to sweets, poultry and eggs. These markets are often located in large, government-owned, residential areas which consist of housing units built to ensure adequate housing at an affordable price to all Singaporeans. Shoppers come to the wet markets frequently, often on a daily basis. Promotional opportunities for U.S. fruits are limited in the wet markets due to space restrictions. Here, small point-of-sale materials can be used effectively. T-shirts for use by the retailers and plastic bags printed with logos or slogans also are appropriate promotional tools for this market segment. Fruit stores, similar to greengrocers' shops in the United Kingdom, are more permanent in structure than the fruit and vegetable stalls found in wet markets. These stores also are found frequently in the vicinity of large, government-owned residential estates and shop areas. The fruits sold here are of slightly higher quality than those found in the wet markets. Quality also is more consistent. Since these fruit stores have more space, larger point-of-sale materials and more permanent store-front signs can be used for promotional efforts. T-shirts for retailers and illustrated bags for customers are still appropriate. Sampling also could be done in fruit stores. There are two major supermarket chains in Singapore--NTUC (National Trade Union Cooperative or Fairprice) and Cold Storage. NTUC stores, with 37 outlets, are located primarily in housing estates, while Cold Storage is more up-market, gearing to the upper class and Singapore's expatriate population. Gourmet stores, such as Jason's, are part of Cold Storage and target their sales to the very upper income end of the population and expatriates. Sales of fruits are still limited in supermarkets, although the potential for growth exists. Prices in supermarkets are about 30 percent higher than those in the wet markets. Singaporeans prefer smaller sized fruit; sales are made largely on a unit rather than a weight basis. This preference for small fruit can be a boon to U.S. suppliers, especially those of deciduous fruits since suppliers can sell fruit here that is less in demand in the United States. In general, pre-packed fruit is difficult to sell in Singapore as shoppers prefer to pick individual pieces to ensure quality. All fruit, even grapes, are eaten peeled. For some fruits, such as apples and grapes, Singaporean importers and consumers tend to be brand-conscious and will invariably favor certain brands depending on availability. Demand for fresh fruit is usually low from November to January due to several factors. During this time, the school holidays occur and fewer people are in Singapore as families take international vacations. Those who cannot afford to travel abroad become more financially cautious during December due to the advent of Christmas and pending school tuitions. Also, during the Chinese New Year period (late January to early February), many people confine their fruit purchases to mandarin-type oranges from China, Taiwan and Pakistan.