Pasar Malam fever hits Singapore for about a month each year, coinciding with the fasting month of Ramadan celebrated by Muslims.
This year, various news outlets have picked up on the expensive rents at the Geylang Serai Bazaar. In a viral Facebook post, local food personality and restauranter KF Seetoh even described Singapore has having the world’s most expensive Pasar Malam stall – beating out other popular pop-up markets in “prime time New York or LA”.
Geylang Serai Bazaar Awarded Via GeBiz Tender
The Geylang Serai Bazaar is awarded via a GeBiz tender. With the popularity of the bazaar, we would expect that multiple companies will bid for the tender, and the highest bid would prevail.
The award value for the Geylang Serai Bazaar was over $2.2 million, and went to S-Lite Event Support, a company that seems to organize many Pasar Malams across Singapore according to its Facebook Page.
Having to beating out other tenders, we should expect that the business that is awarded the bazaar to recoup its investment and maximise profits.
Interestingly, even though S-Lite Event Support won the tender, it was not the highest bidder for this year’s Geylang Serai Bazaar.
Another company put in a bid topping $2.5 million but was not awarded the tender. If the investment goes up in the future, stall owners (and consumers) should expect higher rents (and prices).
If Rents Were Lower, Stall Owners Will Be The Ones “Enjoying” The Profits
While there’s no denying that lower rents can lead to better prices. It may not always work like that.
Stall owners are businesses themselves. They will also want to maximise profits for themselves. They will charge a price that their customers will be willing to pay.
Thus, one way of thinking about it is that lower rents may lead to more profits for the stall owners. We’re not trying to make a moral judgement over who should make more profits, but as businesses, the event organizer and the stall owners are both trying to maximise their profits.
Inflation Has Hit Every Aspect Of Our Life
Another reason that all of us should be familiar with is that inflation has hit all businesses and consumers over the past year.
Rents and prices at the Geylang Serai Bazaar will be similarly affected by such market forces. With the tight labour market in Singapore, manpower costs have also risen.
Makes Sense For Existing Businesses To Become Stall Owners
The Geylang Serai Bazaar, and other similar pasar malams, are popular and have large footfall. It makes sense for existing businesses to tender for such bazaars. In fact, it is arguably cheaper and more cost-effective for them to sell what they are already selling year-round.
Looking at it as a business opportunity, they will be competing with smaller and more nomadic mom-and-pop stall owners. They are potentially more willing to pay a rent that will still allow them to make a profit from the venture. In fact, they could also be thinking about other benefits, such as scouting a different market location to potentially expand into, marketing their products at a high footfall bazaar, creating new jobs for their employees and more.
Smaller stall owners who are more nomadic in nature (i.e. do not have a permanent base) may also be paying other types of costs to store their goods and/or having to pay more for marketing and to hire individuals on an ad-hoc basis.
Read Also: [2023 Edition] Price Guide To Hawker Stall Rentals In Singapore
Higher Rents Must Match What Consumers Are Willing To Pay
At the end of the day, rents can only go up to a point where it becomes unprofitable for stall owners to set-up shop. This is dependent on what consumers are willing to pay for the food, drinks, clothes, and other products sold at pasar malams.
Nevertheless, it’s true that if we wait for such a day, the pasar malam culture in Singapore may have died out by then.
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