RTS Link: Businesses in Singapore are urged to focus on improving customer experience and partnerships, as RTS Link will change consumer cross-border shopping

SINGAPORE/MALAYSIA: Businesses in Singapore are being urged to rethink how they compete before the Johor Bahru-Singapore Rapid Transit System (RTS) Link begins operations in January 2027.

Industry leaders say easier, faster travel between Singapore and Johor Bahru will encourage more shoppers to cross the Causeway for groceries, dining, and services. Rather than trying to match Malaysia on price, businesses should focus on offering better experiences, unique products and stronger partnerships, Channel NewsAsia (CNA) reports (July 23).

Competing on value instead of price

Association of Small and Medium Enterprises (ASME) president Ang Yuit said Singapore businesses face high operating costs that aren’t expected to fall anytime soon. Rent and manpower expenses make it difficult for retailers to compete with Johor Bahru by simply lowering prices.

Instead, he said businesses should improve what customers can’t easily find elsewhere, including offering more product choices, better food quality, stronger service, and a memorable shopping experience from the moment customers walk through the door until they leave.

Professor Sing Tien Foo, a real estate professor at the National University of Singapore Business School, shared a similar view. He said retailers should concentrate on products and services that are harder to copy, such as customised offerings, healthcare, wellness and distinctive dining experiences, as they could also attract customers from Johor Bahru seeking specialised services in Singapore.

Working with Johor businesses instead of against them

Instead of treating Johor Bahru as a rival, both experts said businesses could benefit by working together across the border.

Prof Sing said Singapore companies could expand through partnerships, franchising or opening outlets in Johor Bahru, where rental and labour costs are lower. This would allow them to reduce business risks while reaching new customers.

Mr Ang added that Johor Bahru also gives businesses more freedom to test fresh ideas before introducing successful concepts in Singapore. He pointed to animal-themed cafés as one example of concepts that may be easier to launch across the border because costs are lower.

ASME has already started engagement sessions to help businesses from both sides better understand each other’s regulations and identify partnership opportunities. Mr Ang said learning from local partners will be important because operating rules differ between Singapore and Malaysia.

The spending shift may settle over time

Prof Sing expects retailers in northern Singapore to feel the strongest impact once the RTS Link opens, but he doesn’t believe the situation will last forever.

Drawing on the experience of Hong Kong and Shenzhen, he said spending patterns between neighbouring cities tend to balance out over time as markets adjust. Businesses will still need to withstand the first wave of customers heading across the Causeway before a more stable pattern emerges.

Lower prices continue to attract Singapore shoppers

Price is one of Johor Bahru’s biggest attractions. A comparison found several everyday grocery items at major supermarkets in Johor Bahru were about 30 to 40 per cent cheaper than similar products in Singapore, based on an exchange rate of S$1 to RM3.15.

Rice, diapers and toothpaste showed some of the biggest savings, among other items. The price difference narrowed when neighbourhood shops in Singapore were compared instead of large supermarkets.

Some shoppers also buy from discount retailers and wet markets in Johor Bahru, where selected products can cost even less.

Businesses have time to prepare before the RTS Link opens

The RTS Link is expected to make cross-border shopping easier, but it doesn’t mean Singapore businesses are destined to lose customers.

Retailers can’t control rent, wages or exchange rates, but they can control the experience they offer, the quality they deliver and the relationships they build.

Businesses that adapt early, strengthen their identity and look beyond price will stand a better chance of keeping loyal customers while finding new opportunities across the Causeway.

Read related: ‘Some businesses in Singapore will lose out’: President Tharman says amid JS-SEZ & RTS linking with Malaysia, ‘but on the whole, both countries will be winners’