The upcoming Rapid Transit System (RTS) link, set to commence operations in 2026, is expected to significantly alter the retail landscape in Singapore. Connecting Singapore with Johor Bahru, Malaysia, the RTS Link will offer a convenient travel option, making it easier for Singaporeans to shop across the border. As a result, Singaporean retailers are being advised to adapt their strategies to remain competitive, particularly against Johor Bahru’s lower price points.
Understanding the Competitive Landscape
The RTS Link promises to make cross-border travel between Singapore and Johor Bahru seamless, potentially leading to a shift in consumer spending patterns. Johor Bahru is already a popular shopping destination for Singaporeans, attracted by lower prices and the favorable exchange rate. With the RTS Link, the ease of access is expected to draw even more shoppers across the border.
Mรกrio Braz de Matos, managing partner at Flying Fish Lab, emphasizes the inevitability of this shift. He suggests that rather than trying to prevent consumers from shopping in Johor Bahru, Singaporean retailers should focus on differentiating themselves through value-added services.
Adopting a Challenger Mindset
De Matos advises retailers to adopt a “challenger mindset” to stay relevant in this new competitive environment. He explains that while Singaporean retailers may struggle to compete on price, they can distinguish themselves by offering superior service and personalized experiences. For instance, apparel retailers in Singapore could offer fashion consultations or personalized shopping experiences that enhance the value of their products.
This sentiment is echoed by Januel Koh, a digital marketing and branding lecturer at Singapore Polytechnic, who highlights that consumers are often motivated by value rather than price alone. He points to Hai Di Lao, a popular hot pot chain in Singapore, as an example of how exceptional service and unique experiences can attract customers, even when prices are higher than alternatives.
Strategies for Staying Competitive
To mitigate the potential impact on sales, particularly in the food and beverage (F&B) and supermarket sectors, experts recommend that Singaporean retailers focus on offering premium products and improving service quality. According to DBS analysts Geraldine Wong and Zheng Feng Chee, malls in Singapore could attract more customers by featuring popular eateries from Johor Bahru, allowing those interested in the cuisine to enjoy it without the need for travel.
Additionally, supermarkets could target less price-sensitive consumers by offering higher-quality products and exclusive items that are not easily available in Johor Bahru.
Koh also suggests implementing marketing strategies to encourage repeat business, such as offering discounts for multiple visits or providing free memberships with purchases. These strategies not only incentivize customer loyalty but also create a sense of added value that goes beyond the initial transaction.
Exploring Cross-Border Opportunities
While the RTS Link may introduce new challenges, it also presents opportunities for Singaporean businesses to explore cross-border collaborations. De Matos highlights the potential for Singaporean retailers to reduce costs by integrating their operations with those in Johor Bahru. For example, businesses could maintain customer-facing services in Singapore while outsourcing backend operations to Johor Bahru, where costs are lower.
This approach is already being implemented in the healthcare sector, with Gleneagles Hospital managing consultations in Singapore while outsourcing backend tasks to Johor Bahru. Such cross-border integration could become more prevalent as the RTS Link facilitates easier communication and movement between the two locations.
Looking Ahead
As the RTS Link project progresses towards its completion in 2026, the competitive pressure on Singaporean retailers is likely to intensify. However, by focusing on enhancing the overall customer experience, offering unique services, and exploring cross-border efficiencies, Singaporean retailers can maintain their competitive edge.
In this evolving retail landscape, the key to success will lie in understanding the changing consumer behavior and adapting to meet new expectations. By doing so, Singaporean retailers can continue to thrive even as the RTS Link opens up new opportunities for shoppers to explore Johor Bahru.
Conclusion
The upcoming RTS Link between Singapore and Johor Bahru is set to transform the retail dynamics in the region. While it poses challenges, particularly in terms of price competition, it also offers opportunities for innovation and growth. Singaporean retailers who embrace a value-driven approach, enhance customer experiences, and explore cross-border collaborations will be well-positioned to navigate this new landscape and continue to attract loyal customers.
