Singaporean businesses found different ways to make things work over the last year
Disclaimer: Unless otherwise stated, any opinions expressed below belong to the author.
For many frontline businesses in Singapore, 2025 offered little relief.
Across F&B, retail, and service sectors, shrinking local spending met intense competition from new entrants. At the same time, rental costs, manpower shortages, and operating expenses continued to climb. For many owners, margins narrowed to the point where even small missteps became costly.
What’s increasingly clear is that business conditions have structurally changed since the pandemic. Consumer behaviour has shifted, costs have reset higher, and there’s simply no going back to pre-2020 norms.
Yet even in this environment, some businesses did more than survive—they adapted and remained profitable. Looking across several operators and sectors, three recurring lessons stood out from 2025.
Lesson 1: Cost discipline matters, but cutting the wrong things is fatal
Cost pressures aren’t new. What is new is how little room businesses now have for error.
Lik Wong, co-founder of specialist outdoor retailer X-Boundaries, frames every cost decision around a simple test: Does this directly strengthen customer value or operational resilience?
Founded in 2002, X-Boundaries focuses on high-performance gear for trekking and mountaineering. In recent years, the business faced a roughly 50% increase in rental rates, alongside sharp manpower cost increases—up 53% year-on-year in 2024 and another 13% in 2025
Rather than cut frontline staff, Lik chose to protect and even increase wages for experienced employees. Rental decisions were guided by a strict occupancy cost ratio of 18% or below. Elsewhere, costs were trimmed selectively: replacing fixed phone lines, switching broadband plans, reducing energy usage, and tightening inventory consolidation.
Supplier negotiations focused less on squeezing margins and more on improving efficiency—transacting in local currencies to reduce FX volatility, enabling in-season replenishment, and aligning on territorial protections. Through SGTUFF connections, X-Boundaries also adopted shared logistics, splitting warehouse space and costs with trusted partners.
A similar approach guided Elson Lee, founder of traditional healthcare providers Refresh and Yong Kang TCM. Instead of broad cost-cutting, he separated strategic and executional functions. Back-office and headquarters roles were relocated overseas, where operating costs were lower, while more resources were deliberately allocated to frontline staff who directly shape customer experience.
The result was tighter overhead control without sacrificing service quality—reinforcing the idea that optimisation is about reallocation, not austerity.
Key takeaway: Businesses that endure into 2026 are unlikely to be those that cut deepest, but those that spend deliberately and protect the sources of customer value.
Lesson 2: Adapting to customers requires clarity, not gimmicks
Today’s customers are more cautious, informed, and selective. Winning them has become less about promotions and more about trust.
The Chinese Wedding Shop, founded in 2009 by Michelle Neo and her husband, responded to shifting demand by tightening inventory management and moving marketing fully online. An online-to-offline rewards system allowed customers to accumulate points digitally while redeeming them only in-store—preserving physical engagement without sacrificing convenience.
Instead of paid reviews or heavy discounting, the business focused on service quality and encouraged genuine Google reviews. At a time when discretionary spending softened, credibility became a differentiator.
At X-Boundaries, adaptation took the form of education-based selling. Staff relied on real-world travel and expedition experience rather than scripted pitches, offering candid advice on fit, usage, and trade-offs. Online product guides were strengthened, supported by a dedicated e-commerce team.
The impact was measurable: average basket size rose by about 13%, while overall sales grew an estimated 10% year-on-year.
For Elson Lee’s TCM clinics, adaptation meant integrating modern technology and data-driven processes while remaining grounded in traditional practice. This blend of heritage and innovation positioned Yong Kang TCM as one of the more progressive operators in its segment—and customers responded positively.
Key takeaway: In a tighter market, businesses win not through incentives but through clarity, expertise, and relevance.
Running a business in isolation is no longer viable.
Across many small and medium enterprises, informal peer networks now function as critical sources of intelligence. Business owners share rental benchmarks, negotiation strategies, supplier contacts, and operational lessons that would otherwise take years—and costly mistakes—to learn.
Lee Shao Rong, director of salad chain Supergreen, notes that peer insights help owners assess rental viability more realistically and negotiate with confidence. “If the numbers require selling 300 bowls a day just to break even, it’s not a viable rent—no matter how good the location looks,” he says.
These connections can also open doors to growth. Serial entrepreneur Daniel Tan Boon Huat, whose portfolio spans F&B, retail, and services, entered a joint company arrangement with Koufu that granted him first right of refusal on stall locations within its foodcourts. Within a year of launching the partnership in Dec 2024, the venture generated about S$80,000 in dividends.
For X-Boundaries, long-standing supplier and peer relationships proved crucial during the pandemic, when clearance sales sometimes ran below cost. Trust-based arrangements, such as consignment models, helped the business stay afloat. Today, X-Boundaries and partner X-Trekkers are expanding into the heartlands at Bukit Merah—supported by relationships built over time.
Key takeaway: In a high-cost, high-uncertainty environment, strong business communities act as force multipliers—reducing risk, accelerating learning, and occasionally unlocking unexpected opportunities.
Looking ahead to 2026
Geopolitical tensions, elevated costs, and economic uncertainty continue to weigh on business confidence. The year ahead is unlikely to be easier.
But the past year offers a clearer picture of what endures. Businesses that remain disciplined with costs, honest with customers, and embedded in trusted networks are better positioned to navigate volatility—even if growth remains modest.
In today’s environment, resilience is no longer about chasing scale. It’s about building systems that can withstand pressure—and still function when conditions don’t improve.
About Terence Yow
Terence Yow is the chairman of SGTUFF Co-Operative Ltd. Founded in 2020, SGTUFF is a co-operative supporting and championing the interests of local small businesses.
Terence founded and is Managing Director of the Enviably Me Group of Companies, which is the exclusive distributor of the Melissa brand of fashion footwear in Singapore, Malaysia, and India.
Featured Image Credit: Singapore National Co-operative Federation