Consumer behavior is the study of individuals, groups, or organizations and all the activities associated with the purchase, use and disposal of goods and services. It includes consumer’s emotional, mental and behavioral responses. In short, it answers the following questions: “How do people buy? What do they buy? When do they buy? And, why do they buy?”
The COVID-19 pandemic had an abysmal effect on the world as we know it. People are altering their lifestyles, are purchasing in different ways, and are thinking outside the box. Supply chains have been tested. Some retailers were forced to close. The pandemic caused the consumers to look at products and brands through a fresh lens.
On that note, here are the observable trends in consumer behavior this year.
#1: “I DESERVE IT” MENTALITY
The pandemic tested our physical and mental strength. Many have turn to self-care for solace at home. As the Yuletide season began, we saw a rise in self-gifting. This “I deserve it” mentality came about due to months of being locked down at home. Moreover, treating oneself is a way to ease the mental worries of an individual. Thus, retailers who fall under the “self-care” category such as Bath & Body Works (fragrance), Cotton On Body (loungewear), and Sephora (beauty) can see an increase in sales this season.
#2: CONSCIOUS MENTALITY
Consumers moved further towards sustainability and away from mass consumerism this year. They are more mindful of what they are buying. It is likely that this trend started to emerge pre-pandemic. However, it has accelerated during pandemic. More and more people are eager to purchase sustainable options such as cloth masks and bamboo toothbrushes. They are limit food wastes and shop more consciously.
#3: HEALTH-FOCUSED MENTALITY
Health is wealth. Brands that focused on health have seen an ever-increasing demand this year. Consumers are eager to find ways to support their healthy lifestyles. Having a “health-focused strategy” will be a strategic differentiator for the foreseeable future.
#4: LOCAL MENTALITY
There has been a growing love for local brands and products during the pandemic. The desire to shop local was reflected in both the way people shop (e.g. supporting community stores or online market sites) and what the people buy (e.g. locally sourced or artisanal). Many small and local businesses have effectively capitalized on tools and online platforms to sell their goods.
Image Credits: unsplash.com
People who are no longer commuting to town have began to shop locally. With consumers both willing to shop online and from independent retailers, now is the time for you to react and adapt to this ecommerce trend.
We hope you’ve had a meaningful time spent with your loved ones over the Christmas break. As the Multi-Ministry Taskforce (MTF) announced earlier this month, Singapore will transition to phase 3 starting from Monday, 28 December.
There are also enough testing capabilities now, specifically for the Polymerase Chain Reaction (PCR) test, where Singapore can do over 50,000 a day. Besides, rapid antigen tests are also in place for higher-risk events.
Minister-in-charge of the Smart Nation initiative Vivian Balakrishnan said: “We’ve gone past the 70 per cent participation rate in TraceTogether. There have been more than 2 million people who have downloaded the app and have registered and are using it.”
Changes to note in the activities from 28 December
Image Credits: NUS News
Social gatherings
The number allowed for groups will be up from the current figure of 5 to 8. This also includes households where up to 8 visitors can be present at any point in time. Sport Singapore (SportSG) also announced recently that groups of up to eight people could gather for sports activities.
Marriage solemnisation
The hosting household can invite up to eight other people, not including members of the hosting family, the solemniser, and vendors.
Capacity limits of premises
In phase 3, malls and large standalone stores will increase their capacity limit from 10 square metres per person to 8 square metres per person. Attractions with approval from the Singapore Tourism Board (STB) can also increase their operating capacity to 65%.
Congregational and other worship services
With the successful pilots by selected Religious Organisations (ROs) since 3 October, all ROs can now raise their capacity to up to 250 persons. For congregational services, they have to segregate the community in zones of up to 50 persons each. ROs can also include live performance elements with proper safety management measures in place.
Live instrumental music for certain activities
Speaking of live performances, indoor marriage solemnisation, funerals, and funerary-related activities can also allow that. But there is currently a ban on wind instruments.
Regulations on live performances
Singapore residents can look forward to more indoor live performances of 250 persons in zones of up to 50 persons each in phase 3. Outdoor live performance pilots will also follow suit with the respective person and zone limits. Vendors must continue to manage performances and gathering of crowds safely.
Apart from the abovementioned activities, the MTF will continue trials on higher-risk projects such as karaoke, nightlife events, and busking & live performances in outdoor venues throughout phase 3.
“We must not become complacent and must continue to remain vigilant; otherwise, our individual and collective sacrifices over the past year will be in vain,” the Ministry of Sustainability and the Environment commented on 24 December.
What a lead-up to Christmas. If you’ve been following the news daily, you should be aware of recent reports on a potentially more contagious strain of the virus happening in the United Kingdom.
This newly set border measure applies to long-term pass holders, including short-term visitors who have been to the UK within the last 14 days. “To reduce the risk of spread to Singapore, we are putting in place new border restrictions for travellers from (the) UK for further precaution,” said MOH.
Singapore is not the only country who has taken the move. Hong Kong, India, and many European countries, including France, Germany, Italy, and the Netherlands, have also banned flights from the UK.
Recap on current rules
Image Credits: manchestereveningnews.co.uk
At the moment, all eligible travellers arriving from the UK have to serve a 14-day stay-home notice at a dedicated facility. Non-residents have to show proof of a negative COVID-19 swab test taken within 72 hours before their flight to Singapore.
Returning citizens and permanent residents
Image Credits: sg.news.yahoo.com
Singaporeans awaiting their loved ones to touch down safely from the UK need not worry too much. Singapore citizens and permanent residents returning from the UK will still be able to enter. But they will have to take a COVID-19 polymerase chain reaction (PCR) test upon arrival here, at the start of their 14-day stay-home notice.
WHO cautioned against major alarm
Image Credits: NPR
Citing the coronavirus’s new strain as a regular part of a pandemic’s evolution, the World Health Organization (WHO) urged against unnecessary fear. WHO officials added that there is no evidence yet that the variant is more deadly than the existing COVID-19, though they can’t deny that it seems to spread more quickly.
“There is a hint that it has a higher propensity to infect children,” said Neil Ferguson, a member of NERVTAG and a professor and infectious disease epidemiologist at Imperial College London.
To this, Peter Horby, a professor of emerging infectious diseases at Oxford University and chair of NERVTAG, adds that they have immense confidence that this variant has a higher transmission rate than other virus variants in the UK.
But Ferguson states that they have yet to establish any causality on that, though the data shows it. “We will need to gather more data to see how it behaves going forward,” he remarked.
P2P investments or more commonly known as Peer-to-Peer (P2P) lending is a type of debt-based crowdfunding enabled by digital platforms that connect borrowers with investors without going through a traditional financial intermediary such as a bank. This concept will see investors lending to borrowers (i.e. SMEs) via the platform as a form of investment, and the interest earned from it will be their returns. Despite being a relatively new concept in Singapore, it has grown significantly over the years and has shown no signs of slowing down.
How does P2P investment work for investors?
For investors, it is a means for diversification into another asset class. As most P2P investments offer a frequent repayment schedule (monthly or within 90-120 days period), it can be considered a great supplement to more traditional long term asset classes like stocks or bonds. With interest rates on saving accounts heading south, investors can look for alternative ways to earn interest on their cash.
How much can investors earn?
Be it an individual or institutional investor, the reward on their investment will come in the form of the interest payments serviced by the borrower. At Funding Societies, investors can choose to participate across 6 different investment products with interest rates ranging from 3% – 18% per annum.
Risks and returns go hand-in-hand and the difference in interest rates range is tied to the risk associated with the product. For example, a guaranteed returns investment will yield an interest of between 3% – 5% p.a. while an unsecured business term investment can fetch between 8% – 18% p.a..
How much to invest in P2P investment?
There are no hard and fast rules on how much of one’s portfolio should be allocated to any particular investment assets, and this is the same for P2P investing. What is important is that investors should always consider diversifying across many notes and avoid concentration risk to create a healthy well balanced portfolio.
At Funding Societies, investments start from S$20 onwards and most products provide a periodic repayment of principal and interest. Jointly, it is a great recipe for investors to diversify and reinvest their investments.
P2P investment with Funding Societies
Funding Societies is Southeast Asia’s largest P2P lending platform with over S$1.7b in SME financing funded. In Singapore, the platform holds a Capital Markets Services (CMS) Licence and is regulated by the local authorities. Over the years, they have been able to raise several rounds of equity funding led by investors such as Sequoia India, Softbank Ventures Asia and SGInnovate to name a few. A few things to note when investing with Funding Societies:
Interest returns are exempted from tax: For interests earned in year 2020 onwards
Low barrier to entry: Investments start from $20 per note
Short tenor: Investment tenors ranges from 1 to 12 months
Returns on Investment: Interest rates usually range between 3% to 5% per annum for a Guaranteed Investment product, 6% to 8% per annum for a Property-backed investment and 8% to 18% per annum for Invoice financing and unsecured business term investments
Default Rate: The Singapore platform default rate is 1.89%
P2P investment products
As the investor base grew overtime, they needed to continuously innovate new products to meet the needs of a wider range of investor profiles. Having launched the first product back in 2015, Funding Societies has now grown to offer 6 different investment products with varying levels of risk-return profiles.
TL;DR: P2P Investment Products Overview
1. Property-backed Secured Investment
The Property-backed Secured Investment (PBSI) is a rather unique collateral-backed investment product launched to provide investors with an additional security in the form of a local Singapore property to back the investment. The property is pledged by the SME undertaking the financing.
Funding Societies holds first charge on the property on behalf of investors and it can be auctioned off to recover funds should the SME defaults.
To alleviate concerns on property value fluctuations, the percentage of financing amount varies as per the property types (residential/commercial/industrial) and in most cases is only up to 70% of the property value. The forced value of the property is also considered while arriving at the financing quantum. By doing so, Funding Societies maintains a buffer for fluctuation in property prices as well as for distress sale situations. The interest rate for this investment product is typically between 4% – 8% per annum.
2. Guaranteed Property-backed Investment
Launched in July 2020, Guaranteed Property-backed Investment (GPI) is an investment into a Property-backed Secured Investment with an additional effective guarantee of repayments to investors. Likewise to Property-backed Secured Investment, Funding Societies has the right to liquidate the property to recover the funds should the SME fail to fulfil their obligations.
Falling under the Guaranteed line of products means that both the principal & interest repayments are effectively guaranteed to the investor regardless of the SME’s status. The interest rate for this investment product is typically between 3% – 8% per annum.
3. Guaranteed Returns Investment
Guaranteed Returns Investment (GRI) is another investment product under the Guaranteed line of products. This product was first launched in August 2019 as a means to offer more investment opportunities to investors.
GRI is an investment into a micro financing with repayments effectively guaranteed. Similar to GPI, investors are effectively guaranteed to receive both the principal & interest repayments when they participate in this investment product. The interest rate for this investment product is typically between 3% – 5% per annum.
Please invest with the knowledge that while returns are effectively guaranteed by FS Capital Pte. Ltd., there may be a chance where we might not be able to fulfil the obligations under this arrangement. To mitigate this risk, a cash reserve buffer to allow for repayments to be made on time is maintained.
4. Invoice Financing Investment
The Invoice Financing Investment (IFI) product allows investors to invest into an invoice backed financing offered to SMEs. SMEs take this financing by pledging against the receivables of an invoice. By doing so, it helps to bridge the cash flow gap between actual sales and receipt of payments.
Due to the nature of the financing, investors in this product usually enjoy a relatively short tenor of 30 – 120 days. The short tenor enables investors to receive and reinvest their money relatively quickly. The interest rate for this investment product is typically between 8% – 18% per annum.
5. Revolving Credit Investment
If you own a credit card, you will probably be aware of how revolving credit or more commonly known as a line of credit works. Based on one’s credit standing, they will be issued a credit limit to draw down from over time. Likewise in the case of Revolving Credit Investment (RCI), it is an investment into a revolving credit line granted to SMEs. The SME can repay anytime within the approved tenor and draw down again so long as the amount outstanding is within the limit.
As an investor, you can participate in a single or multiple drawdowns, each with a tenor typically between 1 to 12 months with a chance of early partial or full repayments. The interest rate for this investment product is typically between 8% – 18% per annum.
6. Business Term Investment
Business Term Investment (BTI) was the first product offered alongside the launch of the Funding Societies platform back in 2015. It is an unsecured financing undertaken by SMEs as a means for working capital, expansion or bridging needs. The interest rate for this investment product is typically between 8% – 18% per annum.
Be it a way to diversify your investment portfolio or to beat the falling savings account interest rates, investors can consider to embark on their P2P investment journey with a platform like Funding Societies. If you have done your own due diligence and decided to invest with Funding Societies, they currently have a promotion for new investors. Sign up with promo code MDXMAS20 and make a total investment of S$200 by 31st Jan 2021 to get a S$20 cashback.
Terms and Conditions apply
Investors must sign up with the aforementioned promo code and make a total investment of at least S$200 by 31st Jan 2021 to be eligible for the $20 cashback. Cashback will be credited into the eligible investors’ accounts by the end of February 2021. Funding Societies’ investor T&Cs apply.
Funding Societies is the largest SME digital financing platform in Southeast Asia. It is licensed in Singapore, Indonesia and Malaysia, and backed by Sequoia India, Softbank Ventures Asia Corp and SGInnovate amongst many others. It provides business financing to small and medium-sized enterprises (SMEs), which is crowdfunded by individual and institutional investors. Investors can invest from as low as S$20 with a tenor of no more than 12 months. Depending on the investment product, interest rates can range between 2% to 18% per annum.
On Dec 14, Prime Minister Lee Hsien Loong announced that the Health Sciences Authority (HSA) had approved the COVID-19 vaccine developed by United States pharmaceutical giant Pfizer and German firm BioNTech. The first shipment was also due to arrive in Singapore by the end of December.
Fast forward to a week after the statement; the long-awaited COVID-19 vaccines arrived yesterday (Dec 21) evening! Transport Minister Ong Ye Kung was there to receive the gift, and the vaccines were later to transported to SATS’ cold-chain facility for storage.
Mr Lee said that relevant task force handling the COVID-19 outbreak would announce details of the roll-out in due time. “It’s been a long and arduous year. I hope that this news will give Singaporeans cheer this festive season, and reason to be optimistic for 2021,” he added.
Returning to ‘normality’ will take time
Image Credits: The Straits Times
While we’re one of the first few countries to get COVID-19 vaccines, experts shed light on what this means for ‘normality’. It will most likely take months to return to ‘normality’ as Singapore builds herd immunity with the ongoing study of the effects of the vaccine.
Vice-dean of research at the National University of Singapore (NUS) Associate Professor Alex Cook suspects that the first few groups to receive vaccines will still need to keep to current measures. This includes wearing a mask and keeping to the permitted group size gatherings. This will continue until enough people receive the vaccine to achieve herd immunity.
Singapore possibly to be the last few countries to reach ‘normality’
Image Credits: CNA
President of the Asia Pacific Society of Clinical Microbiology and Infection Dr Paul Tambyah states that Singapore is likely to be among the final few countries in Southeast Asia to return to normal. This will also probably be months after the report of the last cases of COVID-19 in the world.
“If, and it is a big if, the vaccine is successfully rolled out all across the world and if it works, there is a good chance that the incidence of the disease may drop dramatically worldwide, and then the WHO (World Health Organization) can declare the pandemic over, and we can slowly get back to normalcy,” he mentioned.
No massive change in restrictions for months
Image Credits: Vulcan Post
Professor Dale Fisher, the senior consultant at NUH and Chair of the WHO Global Outbreak Alert and Response Network, shares that there will be no significant change in restrictions in Singapore for months. But as more receives the vaccines in 2021, and we slowly approach herd immunity, preventative measures may be eased.
More on establishing herd immunity
Image Credits: TODAYonline
Assoc Prof Cook remarked that until enough people get the vaccine, we cannot protect our society as a whole. The mollifying of mask-wearing, social distancing, and closed borders can take place only when a critical mass of people receives the vaccine.
Dean of the NUS Saw Swee Hock School of Public Health Teo Yik Ying highlights for us the objective of mass vaccination. The main aim is to achieve herd immunity to protect individuals from an insufficient number of people who remain vulnerable to infection.
“If there are enough people that have been vaccinated, then even if someone is infected, the vast majority of the people that this infected person interacts with will already be vaccinated and not be infected. This is why mass vaccination with an effective and safe vaccine remains a very powerful public health measure to protect against an infectious disease,” he added.
Assoc Prof Cook further explains that in the early stages, only those with the vaccine will be in safe hands. Once enough people have it, they would have direct protection. In turn, those without the vaccine will develop indirect protection because of the others in the population who have the vaccination.
Continuous study of the vaccine still in place
Image Credits: sciencemag.org
Infectious diseases expert Dr Leong Hoe Nam spotlights that experts have yet to identify the immune marker used to measure sufficient protection from COVID-19. “We aren’t sure if the immunity conferred by the vaccine is long-lasting and permanent,” he noted.
Experts also shared that though there is evidence that that the vaccine can prevent disease, more study is required to find out if the vaccine has protection against the transmission from the person who is vaccinated to another person.
According to Prof Teo, what we know for sure is that people who have the vaccine will unlikely showcase symptoms of COVID-19 infection, including severe complications. He also adds that Singapore will be performing post-vaccination monitoring. This will allow the authorities to modify measures according to the extent of protection the vaccination offers.
Prof Fisher also brings to light some concerns on whether the vaccines can prevent transmission from asymptomatic cases. There are also remaining questions on its effects on the elderly and immune-suppressed. At this point, more study is necessary.
With that said, we are aware that the vaccine works at least in the short term. “There is really no reason to not take the vaccine with our current knowledge,” he commented.
