Singapore companies are increasingly moving their businesses online to deal with the disruption that Covid-19 has brought to their brick-and-mortar operations.
Even small and medium sized companies, which were previously less inclined to operate online, had to rethink their strategies when the pandemic hit.
“Pre-Covid, there could have been a little bit of hesitancy, in adopting some of these e-commerce strategies. They will say, no, it takes up too much time. It requires a lot of resources, a lot of investments,” Selena Ling, chief economist at OCBC bank, told CNBC.
“But I think what has changed in terms of the mindset, really, in the past 12 to 15 months, is that it’s a ‘do-or-die’ kind of approach,” she added.
A lot of the businesses, even smaller ones had to pivot to this digital model.
chief economist, OCBC bank
To slow the spread of the virus at the peak of the pandemic last year, Singapore’s government imposed a “circuit breaker” — or a partial lockdown requiring most people to stay and work at home. As a result, many retailers and manufacturers could not open their physical stores, said Ling.
“A lot of the businesses, even smaller ones had to pivot to this digital model. And I think a lot of the policy support has also been angled towards trying to help the smaller companies to adopt a digital strategy,” she said.
James Chang, CEO of Lazada Singapore, echoed her sentiment that the pandemic has driven many domestic brands and smaller players online to adapt to the changes.
“Actually, (the) pandemic really drove a lot of e-commerce adoptions. In three different areas — one is many of the brands went online and many of the SMEs have started the business online,” he said, referring to small- and medium-sized enterprises. “The buyer adoption has really expedited.”
Southeast Asia’s leading online retailer Lazada is currently helping SMEs grow their e-commerce presence in the city-state.
“In order for an entrepreneur to start their retail business, the cost of entering has been very high. If we can bring down the barrier to the entry, we believe we can really foster and energize a much more vibrant entrepreneurial scene, which can be the foundational pillar to bring more SMEs on to doing business,” said Chang.
I think one of the big things that Singapore has done is create a financing environment, that’s very attractive to young firms starting up.
senior partner and chairman, Bain Futures
The Singapore government has also provided a lot of support in pushing forward digital agendas for domestic businesses since Covid-19 broke out.
“I think Singapore has been really supportive of enterprises both large and small, especially during macro-economic shifts such as Covid. The local government has been very supportive in wage grants, in helping to retrain and rescale,” said Henry Chan, co-founder and CEO of local e-commerce company, ShopBack.
In addition, Singapore’s e-commerce funding environment has improved tremendously in the last 10 years, and that’s helped start-ups to raise capital and grow their business, according to one analyst.
“I think one of the big things that Singapore has done is create a financing environment that’s very attractive to young firms starting up,” said James Root, senior partner and chairman at Bain Futures, a global think tank at consulting firm Bain & Company. “Ten years ago, that wasn’t necessarily the case. You’d be hard pushed to find more than a couple of venture capital firms.”
Today, there are many who are able to provide financing in the early stages of these companies, he said.
“And that growth capital is vital for companies that have overcome the first few bumps of the seed rounds in their early days and are looking to expand into new categories, into new markets,” Root added.