THE NEED FOR GREATER SCRUTINY
It isn’t only about whether prices are going up or down but also about the actual prices themselves, and whether Singaporeans are paying more than they should.
How do prices here compare to those in similar countries, and are consumers getting a fair deal?
Two recent shopping experiences have made me question whether the market here is as free as it should be.
Last month, in Munich, Germany, while on a family holiday, I bought a pack of shaving razor blades, after misplacing mine. I was shocked by the price but pleasantly so – about S$3 for a pack of 10 disposable razor blades.
In Singapore, the cheapest equivalent blades here, at a major supermarket chain, cost almost three times as much, including its house brand.
The 10-pack razor I bought in Munich was from Cien, a brand I had not heard of and which you can’t find here. It works as well as any I’ve used, for a fraction of the cost.
My second experience was even more telling, with buying AA batteries for my digital lock at home. The manufacturer recommended using Energiser Max, which costs about S$22.30 for a pack of 20 at two major supermarket chains in Singapore.
I baulked at paying these prices and decided to check out the e-commerce retailer Lazada. The price? S$11.90 (S$13.29 with delivery), or almost half the price, sold by a local supplier.
Question: Why do the giant retailers here charge so much compared to similar products elsewhere and online? Why are they not as competitive as they should be, offering consumers more choices?
I can hazard a guess, apart from their higher overhead costs: When the market is dominated by a few players, there is no incentive to engage in a price war. Better to watch each other’s prices and charge accordingly.
How else to explain the almost similar prices for those batteries?
How to make the market more competitive especially with regards to pricing when it is dominated by a few players, which is also the case for petrol and consumer banking, as with supermarkets.
It is worthwhile looking into this question in Singapore. While it has to import most of its goods it doesn’t mean nothing can be done to ensure fair prices.
In fact, it is even more important to do so, precisely because it is so import-dependent.
These issues need to be debated more forcefully, including flogging dead horses.
Han Fook Kwang was a veteran newspaper editor and is senior fellow at the S Rajaratnam School of International Studies, Nanyang Technological University