FIRST paper reporting that the citizen population reached a turning point in 2012 as the first group of Baby Boomers turned 65. But the National Population and Talent Division of the Prime Minister’s Office reported that falling birth rates coupled with increasing life expectancies will result in an ageing and shrinking citizen population and workforce. “At current birth rates and without immigration, our citizen population will shrink from 2025 onwards. The median age of citizens will also rise from 40 years today to 45 in 2025.” The only good news is that even an ‘about 1%’ workforce growth rate after 2020 will be considerably better than in many economies. The participation rate describes the relationship between an economy’s workforce and its working age population.
Zalora goes from e to m
Even blind Freddy could not have missed all those ads to buy shoes and clothes from Zalora.sg, the one year old online purveyor of shoes and apparel. Singaporeans are known for their love of shopping, usually at the mall and equally online but usually from overseas fashion sites. So how is a home-grown online retailer faring in the shopping capital of Asia? With over 40,000 daily unique visitors to the Singapore site alone, “pretty well” would be the answer. Bastian Purrer, Zalora’s CMO said one of the interesting things they learned about Singapore in the past year is that urban shoppers are very brand-savvy and therefore being known for carrying hundreds of brands since the start has worked in Zalora’s favour. “There is high customer loyalty among Singaporean shoppers, and so a large proportion of our transactions are from return shoppers, so our move into mCommerce will increase the level of convenience for our shoppers especially with these return shoppers who are already familiar with the Zalora brand.” Another interesting fact is that many customers do not pay with a credit card but prefer cash on delivery – a major change from traditional e-commerce models.The company is backed by Rocket Internet, JPMorgan and Kinnevik and operates in several other Asian markets. 10 SINGAPORE BUSINESS REVIEW | FEBRUARY 2012
Populate or perish?
A
s the social debate rages on about plans to increase Singapore’s population to almost 7 million people by 2030, businesses should be the ones really worrying as a lack of workers will become apparent even sooner. The real bite on the labour market is likely to be felt most strongly over the years to 2020 than in the decade after, according to some quick number crunching done by UBS economist Edward Teather. In spite of the rhetoric that workers are hard to come by, the fact is that employment growth was 3.8% in Singapore for the third quarter in 2012 and the long term rate has been around 3%. Tighter labour market looms Given the population demographics, Mr Teather reckons that this will have to come down to just a 1 to 2% growth rate in the working population, which means the labour market will get even tighter than it is perceived to be now. Singapore is mired in a demographic dilemma as the government released a white
“The real bite on the labour market is likely to be felt most strongly over the years to 2020.
Benign workforce slowdown Assuming this will be constant in the 2020s, the Singapore government’s plans promise to deliver a relatively dynamic workforce compared to UN projections of annual working age population growth of -0.6% in Japan, -0.5% in Europe, -0.3% in China and HK, 0.2% in the US, 0.6% in Indonesia and 1.1% in India and Malaysia. “We also note that the implied slowdown in workforce growth in Singapore, while significant in the immediate future, is more benign on an international comparison looking into the 2020s,” added Mr Teather. Still this will be of little solace to companies looking for ever fewer available employees.
Employment growth is going to have to slow on a sustained basis
Source: USB, Singapore Government