International Retail Leakages: Singaporeans Outshopping in Malaysia.

Abstract

This research investigates international outshopping. Since most Singaporeans shop in Malaysia, either on occasion or on a regular basis, the island nation is an ideal location to study the phenomenon. In addition, the research is timely since the Singapore Government has

expressed concern with the number of outshopping Singaporeans, as well as with the sheer volume of retail business lost across the Causeway. We surveyed 180 consumers to assess the frequency of international outshopping, along with the factors influencing the behaviour. Findings indicate that international outshopping frequency is dependent on age, marital status, education, and ethnicity. Overwhelmingly, Singaporeans outshop internationally for economic reasons, in spite of superior retail conditions at home. Results should stimulate retailers on both sides of the Johor Straits to improve their marketing and retailing mixes to better satisfy shoppers' needs.

Introduction

"Singaporean arrivals help boost state's economy ... 800,000 go across to Johor each month" claimed the title of a recent newspaper article (Straits Times, 18 September 2000). This number is significant as it amounts to roughly a quarter of Singapore's population. Even when considering that the number does not discriminate between frequent and infrequent cross-border shoppers, it is large enough to have attracted the attention of the Government, as indicated by Prime Minister Goh Chok Tong's 1998 National Day rally speech.

From a managerial perspective, international outshopping, consumers crossing borders to shop, is significant to Singaporean retailers who face both domestic and international competition. The situation is clearly exacerbated by Singapore's size and geographic location, and ease of cross-border travels. A small island state, Singapore is but one kilometre from the Malaysian city of Johor Bahru (JB) where Singaporeans with passports can enter. A study of Singaporeans outshopping in JB would provide a fruitful context in formulating retail competition enhancement strategies. Local retailers would gain from better understanding of outshopping and develop competitive arguments to sway consumers to shop locally, while neighbouring foreign retailers would also design competitive strategies, but to entice local consumers to travel and outshop. As a result, retailing strategies on both sides of the borders would be improved, while keeping consumers' various needs satisfied.