Singapore companies are increasingly moving their businesses online to tackle the disruption that has brought Covid-19 to their brick and mortar operations.
Even small and medium-sized companies that previously operated less online had to rethink their strategies when the pandemic broke out.
“Before Covid, there might have been a little hesitation in adopting some of these e-commerce strategies. You will say no, it takes too much time. It takes a lot of resources, a lot of investment,” Selena Ling, Chief Economist, OCBC Bank told CNBC.
“But I think what has really changed in terms of mindset in the last 12-15 months is that it’s a ‘do-or-die’ approach,” she added.
Many companies, including smaller ones, had to switch to this digital model.
Selena Ling
Chief Economist, OCBC Bank
To slow the spread of the virus at the height of the pandemic last year, the Singapore government imposed a “breaker” – or partial lockdown – that encouraged most people to stay home and work. As a result, many retailers and manufacturers have been unable to open their physical stores, Ling said.
“Many companies, including smaller ones, have had to turn to this digital model. And I think a lot of the political support was also aimed at helping the smaller businesses adopt a digital strategy, ”she said.
James Chang, CEO of Lazada Singapore, reiterated her opinion that the pandemic has caused many domestic brands and smaller online players to adapt to the changes.
“Actually, (the) pandemic really triggered a lot of e-commerce adoptions. In three different areas – one of which is that many of the brands have gone online and many of the SMBs have started business online, “he said, referring to small and medium-sized businesses. “Buyer adoption has really accelerated.”
A living ecosystem
Southeast Asia’s leading online retailer Lazada is currently helping SMEs expand their e-commerce presence in the city-state.
“For an entrepreneur to start his retail business, the cost of entry was very high. If we can lower the barrier to entry, we believe we can really foster and inspire a much more dynamic entrepreneurship scene, the fundamental pillar to getting more SMEs into business, ”said Chang.
I think one of the great things Singapore has done is creating a funding environment that is very attractive for young companies that are starting up.
James Root
Senior Partner and Chairman, Bain Futures
The Singapore government has also done a lot of support since the Covid-19 outbreak in advancing digital agendas for domestic businesses.
“I think Singapore has really helped big and small businesses alike, especially during macroeconomic changes like Covid. The local government has been very supportive of wage subsidies, helping with retraining and rescaling,” said Henry Chan, co-founder and CEO of local e-commerce -Company ShopBack.
Additionally, Singapore’s e-commerce funding environment has improved tremendously over the past 10 years, which one analyst said has helped startups raise capital and grow their business.
“I think Singapore has created a very attractive financing environment for young companies,” said James Root, senior partner and chairman of Bain Futures, a global think tank of the consulting firm Bain & Company. “That wasn’t necessarily the case ten years ago. It’s hard to find more than a few venture capital firms.”
Today, many are able to fund these early stage companies, he said.
“And this growth capital is vital for companies that are early to overcome the initial hurdles of the seed rounds and want to expand into new categories and markets,” added Root.
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