This post was written a week ago for www.hnworth.com, a site targeting high net worth individuals in Singapore.
Have fun reading…
I am back from a trip to the land Down Under where I spent most of my days visiting friends and revisiting those fond memories of the days when those tips from my time waitressing came in handy for the extra expenses that the monthly parental allowance could not afford.
Life has gotten much more expensive since but one cannot tire of eating that same eggs Benedict breakfast that has become the mainstay feature of breakfast menus in those hip cafes in the city centre, the suburbs and the country(-side) that I patronised with the level of service I was getting.
My mind raced. Since when did eggs Benedict go global, to become a breakfast staple from London to Singapore to Australia ? Since when did eggs Benedict cost 20 dollars a serve in AUD and SGD alike ?
Hardly important questions in the grand scheme of the services culture revolution that we have witnessed in the short span of a about decade, best epitomised in the smiling faces of those cafe staff serving eggs Benedict with a warm greeting, smile and small talk that extends the 20 dollar from a meal to an almost bespoked dining experience.
Australia has the highest minimum wages in the world, so high, at A$17.29, that it has led to many an economist condemnation that it will be an Achilles heel in current times when commodity prices have all but collapsed which is hardly evident in the prices I was seeing in the shops and the smiles on the faces of the shop attendants (who were collecting their min. wages, no doubt) in a country where the wealth gap is not as severe as most of the rest-of-the-world.
I shall stop here, upon realising that minimum wages was a topic in the recent Singapore elections, a watershed one, in my opinion, and a turning point in the economic landscape of the country where leaders have already recognised the importance of the service industry and the services excellence key to making that difference which has led us to the forefront of city infrastructure, ranking top in the world back in 2012 and coming second this year only to Hong Kong in a World Economic Forum survey which could have possibly led to the early retirement of the Transport minister.
My thoughts today are of the continued growth of the services industry, evolution of services and the subject of service excellence that could be the missing link in the gears of economic growth.
When we talk about the services industry, we think of banking which is financial services and business services and more.
China is now looking inwards to growth in their attempt to combat their slowing economy, keeping services onshore instead of importing them and looking to boost local consumption of value added services in a gear shift.
As for Singapore, the financial services sector is the only bright spark in GDP growth, delivering >7% for 2015 and the service sector employed 2,151,400 people out of 3,102,500 jobs in December 2010 (source : Wikipedia).
The trend is towards services globally even at a consumer level as each of us spend more time on Facebook, use Uber to get around and drive Uber cars when we are free, buy our products on Amazon and sms over Whatsapp. This is evident in US consumer spending patterns over the decades where in these days, “the defining consumer product of our age is the smartphone. A smartphone is a good, and it takes resources to make and transport it. Still, it takes a lot less resources than, say, a car. Most of its value is in the software that is loaded onto it and the people, information and entertainment you can connect to with it. That’s a different sort of value creation than 20th-century resource-based value creation.” http://www.bloombergview.com/articles/2015-08-31/maybe-this-global-slowdown-is-different
As economies mature, household spending patterns also change to focus on insurance and education expenditure swinging away from goods consumption to service based ones and we can include foot massages and facials for those as well.
Like we said last week, if the trend is towards economic inequality, there will be limits to how much wealthy people consume because, really, one usually only has 3 meals a day, wear 1 watch and drive 1 car at a time. https://tradehaven.net/the-wealth-gap-and-the-tall-poppies/
And thus, the 2014 Bain Worldwide Luxury Goods report has acknowledged a slowing in the personal luxury goods market but what is of interest is that company owned retail channels are gaining sales over wholesale channels. By that I would suppose that consumers prefer to make their purchases in a Cartier store than from a departmental store which could be due to increased promotional efforts or simply, because the shopping experience is a whole lot more pleasant for the same price.