Singapore wholesale trade industry weathers pandemic storm

Wholesale Trade  |  23 Jun 2021

“Outlook for the wholesale trade industry remains positive, with opportunities for businesses to play more than the conventional arbitrage role through the adoption of technologies and a trained workforce.”


The wholesale trade industry is one of the largest and most diverse sectors in Singapore’s economy. A key contributor to the national economy, it accounts for 12% of the country’s GDP and employs over 9% of the local workforce.

The impact of COVID-19 on the outward-oriented sector has been significant in the past year. Lockdowns and border closures have led to a drop in external demand and prolonged global supply chain disruptions. However, its longer-term outlook remains positive as the Singapore government moves to grow the industry’s capabilities through digitalisation, development of new trade products and services, and expansion into new trade markets.

IndSights Research provides an analysis of the industry’s sentiments on the economic landscape, how wholesalers are planning to adapt to current pandemic uncertainties and remain competitive, from its quarterly Business Sentiment Surveys (BSS).


Sentiments on Singapore’s economic outlook show improvement

Wholesalers’ perceptions of Singapore’s current and future economic outlook started to improve in FY20Q3 when the country moved into Phase 2 of re-opening the local economy and businesses. This optimism carried through into the first quarter of FY21 (April to June), though most (62%) felt Singapore’s current economic health to be average. However, about half (54%) expect the economy to be better in a year’s time.


Line graph showing percentage of wholesale companies showing improvement in their perceptions towards Singapore’s current economy outlook from FY20 Q3.
Business sentiments trend data by IndSights Research from Business Sentiments Survey


Line graph of percentage of wholesale companies that thinks Singapore’s economy will be better in a year’s time
Business sentiments trend data by IndSights Research from Business Sentiments Survey


In comparison, wholesalers appeared to be relatively less optimistic about their own industry and held a poorer view of their current business situation (45%) compared to their peers in other industries (35%). Their overall cautious attitudes might be driven by the still volatile global marketplace conditions as major trading countries continue to battle new COVID-19 virus strains with varying success.

Line graph of percentage of wholesale companies that had a poorer view of their own industry’s business situation compared to companies from other industries.
Business sentiments trend data by IndSights Research from Business Sentiments Survey


Yet, about two in five (42%) of wholesalers polled are hopeful that the sector’s business situation will remain the same or improve in a year’s time. This is in line with the Ministry of Trade and Industry, Singapore’s (MTI) expectations that the industry will pick up in tandem with the steady progress of vaccination rollouts across major trade markets.


The industry expects revenues to increase QoQ

Despite facing headwinds from supply chain disruptions and economic uncertainties in the last year, the BSS found that about half (55%) of the wholesale companies polled registered a profit in FY2020.

Further, about a third (29%) saw an increase in their Year-on-Year (YoY) revenues in January-March 2021, with even more (40%) expecting revenues to increase in April-June 2021 compared to January-March 2021.

Bar chart and line graph of wholesale companies that had year on year increase in revenues and expect revenues to increase quarter on quarter.
Business sentiments trend data by IndSights Research from Business Sentiments Survey


Growth-related strategies a focus in the coming months

In terms of future plans, an average of 65% of wholesalers polled planned to maintain or increase their investments in business expansion in first half of (H1) 2021. This is likely spurred on by the gradual recovery of global activities and growth in regional demand.

Some 25% are looking to increase budgets in digitalisation initiatives. This is encouraging to see as it is ineluctable for wholesalers to adopt technology in their supply chain processes in order to thrive and compete effectively.

READ ALSO: Digital transformation of the wholesale trade and Singapore’s journey


The Singapore government has committed to grow and enhance the wholesale trade industry by putting in place several support initiatives such as the Wholesale Trade Industry Transformation Map (ITM). Launched in 2017, the ITM aims to help wholesale companies digitalise to enhance global growth and productivity (The Business Times, 2017).

Bar chart of wholesale companies budget plans for first half of 2021 where most are investing in business expansion, productivity and digitalisation plans.
Business sentiments trend data by IndSights Research from Business Sentiments Survey


Successful technological adoption and implementation of new business ideas require the support of a trained workforce. However, less than half (46%) have plans to maintain or increase training budgets.

READ ALSO: ICT companies with trained workforce performed better than their peers


Talent recruitment a key challenge

Besides the need for a trained workforce, the BSS found that the industry also faces a shortage of local talent.  About three in five wholesalers cited unattractive jobs and difficulty in retention as some of the key issues they face in manpower hiring.

Bar chart of wholesale companies’ budget plans for first half of 2021 where most are investing in business expansion, productivity, and digitalisation plans.
Business sentiments trend data by IndSights Research from Business Sentiments Survey


Industry players that IndSights Research spoke to in a series of focus group discussions, validated these findings. They explained that jobs in the wholesale trade sector tend to be physically demanding and/or have lower salaries hence are less attractive to job seekers. The wholesale trade workforce is highly job-mobile due to their easily transferable skillsets and therefore, retention is a challenge for companies.

The outward-oriented sector is set to benefit from the pickup in global economic activity. To ensure future growth, wholesalers need to keep pace with digital transformation as stakeholders and supply chain touchpoints become increasingly digitalized. A trained workforce will also play a pivotal role in ensuring business success.

For more information about the assistance grants and schemes available to help wholesale trade businesses seize growth opportunities, visit our one-stop resource page to browse assistance schemes grouped according to business stage/function. You can also use the e-adviser on GovAssist to find schemes relevant to your needs.

IndSights Research’s Business Sentiment Survey (BSS) tracks local businesses’ opinions on various issues affecting Information and Communications Technology (ICT) companies, as well as businesses in all major industries in Singapore. Findings above drew on data collected between July 2020 to May 2021 from approximately 1,000 business leaders from the wholesale trade industry in Singapore.

For more information about IndSights Research’s Business Sentiment Survey, or findings on specific sectors, please contact us here.




This article is contributed by Serene Lim, Manager (Research), IndSights Research.


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