The implications of evolving modern retail in Singapore

In July, British retail giant Tesco announced it would delist all fruit drinks with added sugars from their shelves, and sell only 'no added sugar' variants. Why? It's part of their role as champions of the fight against the new evil: sugar. Given Tesco holds around 30% of the grocery market in the UK, the move is seriously bad news for some very big brands.

There are two key implications of Tesco's latest threat for its home market: the first is that, obviously, retailers exert an immense amount of power over manufacturer brands – it is not an even-handed partnership. The second is that the initiative was only possible because of how Tesco is perceived – a credible, innovative, reliable brand – deserving of trust, and therefore ordained with purpose.

In Singapore, we're a long way from having supermarket brands with a comparable level of economic clout and social influence. Cold Storage and Giant might have been around for decades, but emotionally, they haven't replaced traditional wet markets in the eyes of the people that shop there.

Singaporeans simply don't trust a hypermarket in the same way that they trust brand stalwarts like Ayam Brand, Lee Kum Kee, or Khong Guan. That means that in Singapore, retailer (or 'private label') brands have failed to take off. So far.

In Singapore, which has been a modern retail market for decades, private label share is a meagre 8%. That compares to a whopping 41% dollar share in the UK, and 45% in Switzerland. Will it change? Of course it will – it's just a matter of how quickly.

Singaporean shoppers might claim to be brand loyal, but of course we shouldn't believe everything we're told by respondents in an online interview. After all, this is a nation of pragmatists – if a retailer brand offers the same level of trust and prestige as a comparable branded product – and is 30% cheaper – then I know which one I'd choose.

So what can Singaporean brands do in order to stay on the front foot? Here are a few suggestions.

• Recognise that your most valuable distribution partners are also your future rivals. Plan for increased competition. Anticipate the heat.

• Behave like a category leader. Your retail partner may one day be your competitor, but that doesn't mean they're not looking for thought leadership, innovation, and collaboration from their suppliers. Think about how you can grow their business to grow your own. Don't think just about your product on shelf – think about the entire shopper experience and how you can add value to it.

• Offer shoppers a reason to pay more. Retailer brands always win when consumers perceive little intrinsic value in the branded alternative. Innovation may be your salvation.

• Invest in design. The only thing you own is yourself, so be yourself. The generic photo of some peanuts / dead fish / prawns doesn't make you a brand – it makes you a commodity. And commodities are susceptible to price wars.

Personally, I'm thankful that the retail landscape here isn't populated by corporations like Tesco. That's not a fair fight. In Singapore, we're seeing retailer brands maturing and innovating quickly – and brands are finally beginning to respond.

We may soon have a genuinely competitive market in which innovation and creativity will flourish. That's an exciting prospect.