Singapore retailers tap Malaysia, Thailand for growth amidst fierce competition

Consumer demand and digital growth fuel the expansion.

Singaporean retailers are expanding into Malaysia and Thailand, drawn by strong consumer demand, digital adoption, and rising middle-class spending. However, challenges such as intense competition, price sensitivity, and logistical complexities remain key concerns.

"Malaysia and Thailand are not just markets; these are launch pads for success," said Ashutosh Awasthi, Director  at Kadence International Singapore. "Malaysia’s fast-growing middle class presents a lot of opportunities for Singapore retailers, while the strong reputation of Singapore brands further fuels expansion."

In Thailand, the Gen Z consumer base, which makes up 26% of the population, is driving spending in sectors like fashion and beauty, making it an attractive destination for retailers. "Gen Z tends to spend more than previous generations, especially in sectors like fashion and beauty, which helps to fuel the growth of new businesses," Awasthi added.

Thailand’s e-commerce sector is expanding at nearly 15% annually, creating a prime opportunity for Singapore retailers looking to tap into the region’s digital economy.

"Malaysia has one of the fastest-growing ultra-high-net-worth populations, and they are younger than in Western markets," said Nick Morris, Founder at Canvas8. "Singaporean businesses, with their strong track record in luxury, have a huge opportunity here."

Additionally, Thailand and Malaysia’s digital habits are similar to Singapore’s, making market entry smoother. "They use similar platforms like Shopee and Lazada, and in Thailand, over two-thirds of people shop on smartphones," Morris said.

According to Kel Jin Chua, Director of Shopee Singapore, e-commerce continues to be a dominant force in both markets, allowing Singaporean brands to expand with lower upfront costs compared to physical retail. "Many Singapore retailers come to us looking to expand into Malaysia and Thailand, as they see strong consumer demand and a growing market," he said.

Despite strong consumer demand, retailers still face obstacles entering Malaysia and Thailand. One of the biggest challenges is competition in Thailand’s retail market, especially in tourism-driven sectors.

In Malaysia, price sensitivity is a major factor. "The key challenge for Singapore retailers will be to strike a balance between affordable pricing and product quality," Morris added. "Malaysian consumers demand value for money."