Will Singapore’s hawker industry survive COVID-19?

Hawker Centre flickr photo by Tiberiu Ana shared under a Creative Commons (BY) license

The pandemic has slowed government efforts to revive Singapore’s struggling hawker industry.

By Helena Kerr

As Singapore works to keep its economy afloat during COVID-19, the country’s hawker industry faces a unique challenge.

Singapore has 48,434 confirmed COVID-19 cases with 27 deaths. In April 2020, the government implemented a nation-wide ban on dining out in an effort to curb the spread of the coronavirus. Large gatherings are still restricted and residents are advised to restrict outdoor activities to essential errands. While the country’s famous hawker centers are open, only take-out and delivery services are permitted.

Since April, hawker businesses have lost 70-90% of their profits. Many have turned to digital delivery platforms like GrabFood and Foodpanda, but they pay a steep commission fee of 30-35% per order. Singapore’s National Environmental Agency (NEA) has rolled out a relief program that offers hawker businesses a one-time payment of S$500 (US$361) to assist with setup costs for using digital delivery platforms. However, the platforms’ hefty commission fees still deter hawkers.

The COVID-19 pandemic is threatening to upend the hawker industry, which was already struggling with increasing costs and a receding workforce.

History of Singapore’s hawker culture

Singapore’s hawker culture harkens back to the country’s colonial era when early migrants set up shop on the streets selling various traditional food as a source of income. With their low barriers to entry due to the minimal capital and skill required, hawker businesses grew exponentially. Street hawkers soon became the emblem of Singapore’s progress as the budding industry provided affordable food and a space for community bonding.

Between 1968 and 1986, the Singaporean government led an effort to license street hawkers and resettle them into open spaces in buildings with amenities. Today, Singapore has built more than 110 hawker centers across the country, with approximately 13 more centers to be developed before 2027.

In the hawker centers, over 6,000 stalls sell signature food like laksa, a spicy Peranakan noodle soup and hokkien mee, a cuisine from China’s Fujian province. The occupancy rate for stalls in the centers has been 97% for the last five years, demonstrating hawker centers’ longevity in Singapore’s rapidly changing economy.

In 2018, Singapore ranked first of 113 countries on the Economist Intelligence Unit’s Global Food Security Index, scoring the highest on affordability and availability. The index attributed this achievement largely to the affordable meals in Singapore’s hawker centers.

The government-owned hawker centers have been a source of employment for Singaporeans and permanent residents, as well as a hub for affordable meals for low-income households. Singapore’s food and beverage industry, with hawker centers being a major element, contributes an estimated S$14.4 billion (US$10.39 billion) to the country’s gross domestic product (GDP) and employs approximately 300,000 people

Hawker industry struggles with rising costs and ageing workers

Today, starting a hawker business requires S$18,000-20,000 (US$12,992-14,437) in upfront costs in public hawker centers and up to S$50,000 in private food courts. Hawkers’ profits are highly contingent on their location, operating hours, product price and food quality. Their average daily earnings range from S$50-$1,000 (US$36.10-722.10), with most hawkers earning S$2,000-3,000 per month (US$1,444.20-2,166.30).

As Singapore’s economy tilts toward other areas of the service sector, the number of people entering the hawker trade has dwindled. Running a hawker business demands long hours of strenuous work in physically challenging working environments. Other service sector jobs are generally easier and more popular among Singapore’s younger generation. As a result, the hawker industry has one of the largest numbers of workers age 55 and over of any industry. In 2016, the Singaporean government formed the Hawker Centre 3.0 Committee to sustain and reinvent the ageing hawker industry. The committee launched hawker training programmes for aspiring entrepreneurs, as well as information center for hawkers. 

What does the future of hawker centers look like?

As the lockdown continues, the number of licensed hawker businesses—currently 25,000—may fall by 5,000-7,000, according to one estimate. Walk-in sales may remain at less than 20% of pre-pandemic levels as online delivery orders continue to surge.

In addition to delivery apps, more hawker businesses are pivoting towards social media and e-commerce to overcome plunging sales. Some hawkers have also turned to digital advertisement through platforms like Carousell, Singapore’s online marketplace, to broaden their customer base.

While Singapore’s teetering hawker industry remains uncertain, the rapid adoption of digital tools is key to its survival. Hawkers’ road to recovery will inevitably involve major digital transformation. This raises a challenge for the ageing hawker industry, but with tactful government intervention, it might survive the COVID-19 pandemic.