Singapore’s dining scene has seen a rise in new restaurants serving hometown cuisines from various parts of China. Why are so many Chinese restaurants opening in Singapore, and what are their strategies? Can local restaurants serving Nanyang flavors stand out in an increasingly crowded F&B scene?
On two early evening visits, I observed that new immigrants from China and many local families were among those queueing outside the restaurants. This influx of restaurants from China — including dominant brands and chains — can also be observed in Chinatown, at many popular dining venues, and even in neighborhood shopping malls.
While overseas F&B businesses are establishing themselves in Singapore, some local mid-range and high-end restaurants are struggling. In 2024, famous restaurants like Tippling Club and Michelin-starred eateries like Chef Kang’s Private Kitchen and Sommer closed down.
In 2024, the monthly average number of business entity closures was 20% to 30% more than in the past three years after Covid-19.
According to the Accounting and Corporate Regulatory Authority (ACRA), 3,004 F&B business entities closed, while 3,577 were formed in the first 11 months of 2024. That equates to 273 closures and 325 monthly openings, or a daily average of nine and 11.
In 2024, the monthly average number of business entity closures was 20% to 30% higher than in the past three years after Covid-19. The closure and formation of F&B businesses are the highest in 34 years since records began in 1990. With the addition of unpublished December data, the number of F&B business closures in 2024 will approach the record of 3,352 in 2005, while the number of new F&B businesses is expected to break the record of 3,934 in 2021.
The above data show the rapid pace of elimination and rejuvenation in the post-COVID-19 F&B industry. Experts also emphasize that local restaurants and overseas brands must weather the pressures of survival while pursuing overseas expansion.
According to interviewees and experts, local restaurants face harsh competition from three sources: overseas F&B businesses, rising operating costs, and the strength of the Singapore dollar, which prompts Singaporean consumers to spend overseas. To overcome these formidable challenges, F&B businesses must consider attracting customers, reducing costs, and enhancing competitiveness.
According to Ang Yuit, president of the Association of Small & Medium Enterprises, the two main factors that have led to the overseas expansion of Chinese brands are the push of domestic competition in China and the pull of the US-China trade war.
Firstly, Covid-19 and China’s economic slowdown have intensified the competition among F&B businesses in China. Secondly, Chinese companies know they will bear the brunt of the US-China trade war and must build up their capabilities to expand overseas. These push and pull factors thus encourage overseas expansion, and Singapore is often the first stop for Chinese businesses that venture abroad.
Behind the complex macro data are the livelihoods of the local F&B industry's employers and employees and the survival of Chinese F&B businesses that are susceptible to intense domestic competition and overseas expansion pressures.
