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This year alone, EHOUSE DESIGN boss Chen Zhongrong and his team have made the four-hour flight between Guangdong and Singapore at least ten times. Over the past two years, the Chinese interior design and modular decor company has seen a marked increase in the number of projects it has secured in Singapore. Chen began exploring the Singapore market during the Covid-19 pandemic, just as China’s interior design and renovation industry entered a wave of overseas expansion between 2021 and 2023. In an interview with Lianhe Zaobao (LHZB), he said: “Competition in China’s renovation market intensified after the pandemic as firms fought over an increasingly saturated market. There was rampant homogenisation and price wars, severely squeezing profit margins and prompting us to look overseas for a second engine of growth.” Singapore’s interior renovation market is expected to grow substantially, reaching between S$4.8 billion (US$3.7 billion) and S$7.4 billion by 2027. Singapore’s interior renovation industry is seeing more and more Chinese companies. (SPH Media) After discovering strong demand in Southeast Asia, particularly in Singapore, Chen began taking on residential and commercial projects here through recommendations from friends. One example is the new Old Seng Choong outlet at WEAVE in Resorts World Sentosa, which they completed last year. Specifically, the company developed the design and manufactured the prefabricated components in China. Once the modules were completed, they were shipped to Singapore, where a local partner hired workers to assemble them on site. Describing the process, Chen said: “It’s like building with Lego.” Driven by major public infrastructure projects and a buoyant residential property market, Singapore’s construction demand has risen significantly in recent years, benefiting the interior renovation industry as well. According to Attika Group’s IPO prospectus, Singapore’s interior renovation market is expected to grow substantially, reaching between S$4.8 billion (US$3.7 billion) and S$7.4 billion by 2027. Source: Attika Group IPO prospectus, Converging Knowledge (Graphic: Woo Yee Ling) At the same time, Singapore and China introduced mutual visa exemption arrangements in February 2024, allowing holders of ordinary passports visa-free travel for up to 30 days for personal reasons such as tourism, family visits and business. EHOUSE DESIGN is far from the only Chinese interior design and renovation firm expanding into Singapore in recent years. Some have moved with Chinese construction companies expanding overseas, while many more have no choice but to go abroad due to the downturn in China’s property market, which has weakened demand for renovation work. — Jackie Soh Loong Chow, CEO, Lincotrade Jackie Soh Loong Chow, CEO of Singaporean renovation company Lincotrade, told LHZB that leading Chinese architecture decor company Gold Mantis, as well as established home furnishing company GoldenHome, founded in 1999, had long entered the Singapore market. More intense competition Soh said that over the past one to two years, there has been a significant increase in the number of Chinese renovation firms coming into Singapore. Some have moved with Chinese construction companies expanding overseas, while many more have no choice but to go abroad due to the downturn in China’s property market, which has weakened demand for renovation work. “They generally use Singapore as a springboard before expanding into the wider Southeast Asian market.” Jackie Soh of Lincotrade & Associates says Singapore consumers are seeking better value for money, with many purchasing furniture directly from China. (SPH Media) However, the influx of Chinese competitors has not only intensified competition for Singapore renovation firms, but has also added to cost pressures. Local companies interviewed pointed out that Chinese renovation firms benefit from lower material and labour costs, as well as more efficient design, construction and supply chains, which allows them to keep costs down and maintain relatively lower prices. However, fluctuations in oil prices following the outbreak of the Iran war have pushed up material and transportation costs for the renovation industry. This has left little room for further price reductions, putting even greater pressure on firms with limited market share. Even so, industry players interviewed do not think that low-price competition is sustainable. Soh noted that the impact has been particularly pronounced for small and medium-sized renovation companies, especially those serving the consumer market. Increasingly, Singapore consumers are seeking better value for money, with many purchasing furniture directly from China through online platforms such as Pinduoduo and Taobao, putting further downward pressure on overall market prices. Even so, industry players interviewed do not think that low-price competition is sustainable. Soh said Japanese and South Korean contractors entered Singapore in large numbers between the 1990s and 2000s, and Lincotrade participated in interior fit-out projects undertaken by Japanese contractors during that period. However, some of those companies slowly faded from the market after finding it difficult to sustain their cost competitiveness. A residential unit designed by Lincotrade. (Lincotrade website) “As long as costs in Singapore don’t come down, low prices simply cannot be maintained for long. Anyone wanting to stay in the market over the long term will eventually have to correct their pricing.” Low-price strategy unsustainable in high-cost Singapore Chen said frankly that while his company enjoys the advantages of China’s supply chain and can deliver projects efficiently, it has no intention of winning business by undercutting competitors. He also feels that Singapore’s stringent regulatory requirements as well as high labour and transport costs leave only limited profit margins, making an aggressive low-price strategy unsustainable. International competition is unavoidable. We cannot compete purely on price sensitivity. Instead, we win customers through our service, quality and the strengths of being a local company.” — Mike Chong, Executive Chairman and CEO, Dezign Format Mike Chong, executive chairman and CEO of Dezign Format Group, which provides creative design services for exhibitions and festive events, said overseas competition comes not only from China, but also from Malaysia. “International competition is unavoidable. We cannot compete purely on price sensitivity. Instead, we win customers through our service, quality and the strengths of being a local company.” His nephew Jonathan Chong, the group’s executive director, said many of the company’s projects involve branded pop-up exhibition booths, where clients demand exceptionally high standards of quality, speed and precision. Local Singapore firms hold a distinct advantage in such projects. “If components are manufactured overseas before being imported and assembled here, it’s generally very difficult to meet the required timelines. And if modifications are needed during installation, they become much harder to carry out.” Mike Chong (right) and Jonathan Chong of Dezign Format. (SPH Media) Mike Chong added that Singapore has stringent construction site safety standards and strict regulations governing foreign worker permits, giving local companies an edge in navigating compliance requirements. ... it’s not simply a matter of transplanting the Chinese model. We have to adapt to Singapore’s building and renovation regulations, material standards and workers’ habits.” — Chen Zhongrong, Head, EHOUSE DESIGN Chen stressed: “From building a local team in Singapore to ensuring regulatory compliance, it’s not simply a matter of transplanting the Chinese model. We have to adapt to Singapore’s building and renovation regulations, material standards and workers’ habits. The cost of trial and error during the initial stages is extremely high.” Interaction can foster win-win cooperation Singaporean industry players interviewed also hope Chinese firms will bring higher standards, new products and materials, and even new technologies to the market. Jonathan Chong said he regularly visits trade fairs such as the Canton Fair to exchange ideas and learn about new materials and technologies developed by overseas counterparts. “They’re developing very quickly. We see them not only as competitors but also as potential partners with valuable expertise to learn from.” The Birkenstock store at Marina Bay Sands was designed by Dezign Format. (Dezign Format website) Fann Zhi Jie, president of the Society of Interior Designers Singapore (SIDS), also told LHZB that Singapore’s designation as a UNESCO Creative City of Design reflects its longstanding openness to overseas interior designers, while many local designers have also ventured abroad. “Last year, we brought a group of 20 to 30 designers to Bangkok to explore local materials and meet designers there. It was about exposing them to what’s available in the market and understanding how we can make use of those resources.” Soh is optimistic about opportunities to collaborate with Chinese counterparts in developing international markets. In his view, Singapore renovation firms possess strong capabilities in adapting to overseas markets, while Chinese companies enjoy more comprehensive supply chain advantages. Combining these complementary strengths to jointly expand into broader international markets represents a worthwhile win-win opportunity. This article was first published in Lianhe Zaobao as “中国装修商低价来新加坡抢滩?本地业者:可共赢”.
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