Internationalisation has long been a focal feature of Singaporean businesses; with the country measuring one full marathon across and half a marathon from top to bottom, the country offers limited expansion possibilities domestically. In view of this, many furniture companies have since sought their fortunes overseas.

Consistent with previous findings, Malaysia and China remain the top overseas locations for operations. Industry players have long lamented the lack of access to necessary resources, especially in seeking land and necessary labour for production facilities in Singapore, and have thereby relocated the majority of their productions overseas.

In fact, many Singaporean businesses’ appetites for internationalisation extends beyond merely shifting their production capabilities to low-cost regions. Amongst those surveyed in this round of surveys, 49% of the firms have expressed their intentions to further their expansion overseas with much more focus on establishing permanent operations such as sales offices or physical outlets.

In terms of reaching out to new markets through sales, Myanmar and Indonesia remain popular choices this year. Europe is clearly the most attractive region for Singapore furniture businesses, and of those who cited Europe, 28% expressed particular interest in Germany. This was followed by interest in the UK, which sat at 22%.

Where are the markets for future growth?

As expected, the larger the business, the higher the probability of having existent overseas operations. Of the various existent overseas operations recorded, 85% belonged to Singapore furniture businesses with a revenue of SGD 5 million and above. In fact, 44% of these establishments belong specifically to firms with revenues of SGD 20 to 79.9 million. It is apparent that internationalisation is highly related to the business’s size, and it scales up rapidly when firms reach the mark of SGD 5 million and beyond.

Excerpt from Singapore Furniture Outlook 2014, spearheaded by Singapore Furniture Industries Council and SPRING Singapore.