Why Singapore consumers still prefer home-grown brands

They feel valued by the ‘local heroes'.

Amidst the gradual recovery in the retail sector, a survey by ICLP found that more shoppers in Singapore feel valued by home-grown brands that they regularly shop with, as compared to the international brands.

According to the study, 32% of consumers expect local brands to show appreciation for their regular patronage, with a close 35% expecting the same of international brands. Interestingly, when asked to rate the performance of brands, 26% of consumers said that local brands actually deliver, as opposed to only 19% for international brands.

The trend shows that even as brands' actual performance trails behind consumers’ expectations across the board, local brands seem to be winning the hearts of more Singaporeans.

The study said that one reason for this is due to local brands being better at meeting consumers' expectations. As much as 22% of Singaporean consumers expect local brands to listen to them and 20% feel that brands actually do. For international brands, however, the two metrics lie at 26% and 19% respectively, presenting a larger gap of 7%.

ICLP country manager Bruno Tay said against the myriad of brands available in the market, customers are less inclined to pledge their loyalty easily.

“In this digital era, brands need to communicate with consumers, to listen to what they want. On this scale, local brands appear to fare better because of their deeper resonance, but this could also be because global brands have not seized the opportunity to establish stronger local relevance with customers in their product offerings, communications, and campaigns,”

Despite local brands’ slight edge on customer devotion, they are found to be as wanting as international brands when it comes to personally recognising long-standing and regular customers; a 12% gap between expectation and reality applies to both home-grown and international brands.

This seems to correlate with all the brands’ performance when it comes to utilising customers’ personal data; there is a shortfall of 7% for both international and local brands against customers’ expectation of getting something in return for sharing such personal data.

“We’ve observed that despite the international brands’ global recognition and resources, they are not seen to be leveraging those resources any better than local retailers in recognising individual consumers for their loyalty,” noted Tay.

He furthered, "Both local and international brands need to make better use of the data they are collecting from customers – by finding ways to lend a personal touch to each customer and offering tailored promotions and services that lie within the appropriate contexts in the customer journey.”