Singapore Business Review (July - September 2019) by Charlton Media Group

Issue No. 88

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HOTTEST STARTUPS

2 0 1 9

RETAIL UNDERDOGS BITE INTO THE GROCERY PIE WHAT’S NEW IN EMPLOYEE PACKAGES? HOW ARE FIRMS SPENDING THEIR #INSTA BUDGETS? WILL REITS SAVE THE YEAR FOR IPOS? HOME AUCTIONS FLOP SHOCKS 88 73

MICA(P) 244/07/2011 KDM No: PPS1645/3/2008

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

FROM THE EDITOR About Us

The momentum is still large for fintech startups in Singapore, thanks to the backing of the city’s regulators and the untapped growth prospects of its underserved markets. However, according to the people running Singapore’s top venture capital firms, more startups focused on deeptech and AI are beginning to gain ground.

AUDITED CIRCULATION: 23,116 ONLINE READERSHIP: 215,000 monthly uniques through Google Analytics The Singapore Business Review is the highest circulating and best read business magazine in Singapore. Our online readership has an average of 215,000 unique viewers, according to Google Analytics.We won the Business Trade Media of the Year Award at the 2017 MPAS Awards. Do reach out to us if you would like us to tell your story to our readers via print & online advertising or events. PUBLISHER & EDITOR-IN-CHIEF Tim Charlton ASSOCIATE PUBLISHER Rochelle Romero PRODUCTION EDITOR Danielle Mae V. Isaac GRAPHIC ARTIST Arthur Chan ADVERTISING CONTACT Aileen Cruz aileen@charltonmediamail.com Vanessa Austria vanessa@charltonmediamail.com Karisse Coderes karisse@charltonmediamail.com

Automotive marketplace Carro made it to the top of Singapore Business Review’s Hottest Startups for 2019 after completing its $81.3m series B round in May 2018. It is followed by biotech startup RWDC and AI solutions provider AnyMind which both bagged over $20m of funding. The full list of Singapore’s hottest startups can be found on page 30. This issue also features the latest in employee perks programmes, companies’ #insta budgets, and the coverage of our inaugural Technology Excellence Awards. As always, enjoy the read!

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SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

Tim Charlton

Singapore Business Review is available at the airportloungesoronboardthefollowingairlines:

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CONTENTS

FIRST 10 Can retail underdogs take a bigger bite of Singapore’s online grocery pie?

12 Air taxis take flight in Singapore’s skies 14 How big firms are spending their #insta budgets

14 Inside Love, Bonito’s largest physical

COVER STORY 30 HOTTEST STARTUPS 2019 DEEPTECH DOMINATES STARTUPS LANDSCAPE

store in Funan

16 How The Great Room is riding on Asia’s co-working wave

ANALYSIS 44 Banks miss US$100m yearly by failing to tap into wealth, SME segments

FINANCIAL INSIGHT REITS TO THE RESCUE FOR IPO LAUNCHES

INDUSTRY INSIGHT AUCTIONS FAIL TO TAKE OFF DESPITE RISE IN PROPERTYCRAZED HOMEOWNERS’ LISTINGS

SPACE WATCH 34 Check out ISG’s new Haw Par Centre space

LEGAL BRIEFING 40 Bitcoin bother puts crypto platform on trial

AWARDS COVERAGE SINGAPORE BUSINESS REVIEW TECHNOLOGY EXCELLENCE AWARDS

EVENT COVERAGE SOUTH KOREA, GERMANY REV UP AUTONOMOUS VEHICLE ADOPTION

For the latest business news from Singapore visit the website

www.sbr.com.sg Published quarterly on the Second week of the Month by Charlton Media Group 101 Cecil St. #17-09 Tong Eng Building Singapore 069533

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News from sbr.com.sg Daily news from Singapore MOST READ

RESIDENTIAL PROPERTY

FOOD & BEVERAGE

AVIATION

URA launches three residential sites under H1 GLS programme

ST Group prices IPO at $0.26 apiece

SIA Changi Airport lounges receive $50m makeover

The Urban Redevelopment Authority has released one residential with commercial at 1st storey and two residential sites for sale under the H1 2019 Government Land Sales (GLS) programme. Together, these three sites can yield about 1,545 residential units. JTC is injecting more homes in the one-north estate and enhancing the area as a mixed use business park.

Australia-based food and beverage firm ST Group has launched its initial public offering priced at $0.26 apiece. The IPO, which was rolled out in conjunction with the firm’s proposed listing on the Catalist board of the Singapore Exchange Securities Trading, comprises 30.08 million placement shares. At an issue price of $0.26 per share, the group’s market cap is expected to be approximately $64m.

Singapore Airlines (SIA) will invest more than $50m for the renovation of its Changi Airport Terminal 3 lounges. Planned renovations to the SilverKris and KrisFlyer Gold lounges will increase space and total customer capacity by 30%. Upgrades to the KrisFlyer Gold lounge will double its overall capacity, SIA said. First class passengers will also enjoy a private bar at The First Class Lounge.

A further tightening of financial regulation in Singapore BY RACHEL WOOLLEY It may seem like money laundering is on the rise if recent news headlines are anything to go by. But the fact is, criminals have been successfully laundering money through financial institutions for hundreds of years. The difference now is that financial regulators around the world are cracking down on banks to ensure that adequate processes are put in place to prevent criminals laundering money and financing terrorist activity.

The future of Singapore’s globalisation story is… human BY KYLE HEGARTY It was now over ten years ago when the cargo ships stopped moving. The Global Financial Crisis reached Asia causing the Singapore Strait, one of the biggest arteries of global trade, to come to a standstill. In fact, Singapore was the first Southeast Asian country to fall into a recession as a result of the calamity. At the time, it seemed the only businesses doing well were the bars and restaurants filled with brokers and traders who had nothing to sell.

MOST READ COMMENTARY Look to leadership to slay the spectre of overwork BY LUKE MCNEAL A recent study by Monster revealed that Singaporeans feel they have an “average” work-life balance and a third feel unsatisfied with the amount of time they’re able to spend with family and friends. More than 80% feel that having a good work-life balance can enhance productivity, but 42% say their bosses have a negative attitude towards it. Sentiment like this requires action. But ultimately, change needs to start from within.

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

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FIRST on providing the best and widest product assortment, competitive pricing and promotions, and superior quality in fresh, coupled with the convenience of scheduled delivery, sets us apart from our competitors,” Ruddy highlighted. Meanwhile, Dairy Farm’s hypermarket banner Giant is forecasted to remain a significant part of the firm’s performance, its fastest growth may likely be driven by its online channel, IGD’s research said. That said, not all of Singapore’s e-commerce underdogs have been able to take another bite off the pie.

Singapore’s overall grocery market is expected to grow 14.5% annually from 2018 to $9.9b in 2023.

Can retail underdogs take a bigger bite of the online grocery pie?

lthough traditional trade still makes up about a fifth of grocery sales in Singapore, e-commerce is set to gain further momentum over the next five years with smaller players edging out BigTechs for the lion’s share of the market. Singapore’s overall grocery market is expected to grow 14.5% annually from 2018 to $9.9b in 2023, according to projections from international food and consumer goods research IGD, ranking the country as the 23rd largest grocery market in Asia in four years time. The research noted that whilst the Lion City is a small market in value terms, it remains strategically important for many businesses, and is often seen as a benchmark for the evolution of cities in the region. According to IGD, online will be the fastest-growing grocery channel in Singapore over the next five years, primarily driven by Alibaba Group through its RedMart store and FairPrice investing more in its online business. In fact, RedMart was tipped to establish itself as the clear online market leader by 2023, the latest forecasts by IGD Asia revealed. In 2017, Korea-based Qoo10 held the distinction as Singapore’s top e-commerce player, with 32.6% market share, according

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

to a report from CGS-CIMB. BigTechs Amazon and Apple trailed behind with 11.5% and 11.0% market share, respectively. The market shares of Singapore big names, FairPrice and RedMart, were only at 6.1% and 4.5%, respectively. “As local consumers travel overseas more and become exposed to international cultures and cuisines, they naturally develop a more sophisticated palate and an eclectic taste for food. Online will be the fuel for this growth as grocery shoppers switch their habits and consumption from traditional stores,” Richard Ruddy, CRO and head of grocery at Lazada Singapore, told Singapore Business Review. Founded in 2011, RedMart caters to Singapore’s time-strapped consumers by offering fresh food, household essentials and specialty products which can be delivered straight to the customers’ homes. In 15 March, Lazada Group announced that it would integrate RedMart onto its online platform in its bid to become a regional e-commerce powerhouse. “We firmly believe our continued focus

Failed e-commerce In May, e-commerce startup honestbee hit a snag in its regional expansion ambitions. It hit the brakes on its food delivery services and temporarily suspended its laundry services in Singapore, whilst suspending its operations in Hong Kong, Japan, Indonesia and the Philippines, due to an in-depth strategic review of its business following reports of a cash crunch. The news shortly came after the firm’s co-founder and CEO Joel Sng stepped down and was replaced by honestbee’s board chairman Brian Koo. However, Singapore’s customers still have plenty of options for their shopping needs, with grocery services like FairPrice On and RedMart, amongst physical stores, continuing to perform well thanks to their constant expansion of online product ranges and improvements in supply chain efficiencies. A survey conducted by Maybank Kim Eng (Maybank KE) Securities amongst Singapore’s biggest grocery players found that whilst there were cost savings of at least 8% if customers switched to buying housebrands rather than branded products at the same store, they could still save more by shopping at either RedMart or at Dairy Farm International’s brands Giant and Cold Storage. The survey also found that customers could save more by purchasing non-fresh products at both FairPrice and RedMart, with a basket of non-fresh goods (excluding body wash) totalling $46.34 and $49.03, respectively, compared to Cold Storage’s $49.83 bill. That said, Maybank KE’s basket of fresh produce at RedMart came to a grand total of $31.18, significantly higher than Sheng Siong’s $27.87. “Shoppers in modern trade tend to have

“Online will be the fastest-growing grocery channel in Singapore over the next five years, primarily driven by Alibaba Group through its RedMart store.”

feet of food|factory space (59,190 sq meters,| 29 MAY 2019 INDUSTRIAL RESEARCH | SINGAPORE Step 2: Apply to SFA for a license equivalent to 1–2% of current food factory stock) An e-Application must be submitted to the SFA came on-stream in 2019 to date, a surge from with the required supporting documents, the 31,431 sq feet (2,920 sq meters) completed including proposed layout plan, processing in all of 2018. Another 3.68 million sq feet of flowchart and product particulars. The SFA then food factory space (341,670 sq meters, about 9– conducts preliminary evaluation site 10% of current food factory stock) is in the Delivery serviceaproviders also solidifiedand their Based on Colliers’ observation, demand remainsSustained demand inspection. Professional advice is provided pipeline with more than 80% to be completed in presence in the face of rising competition, withand strong for food factories nearer the city center, approval is issued their for the 2019-2020. This supply influx isfor located Food facilities estimated to account aboutmainly in Foodpanda andnotification Deliveroo starting own mature food manufacturing areas such as higher purchasingwith power, make more commencement of fit-out work. 1 of the North, East and West regions. 10% the total number of manufacturing central kitchens in the last two years. MacPherson, Pandan Loop and Bedok North able SPECIAL REPORT impulse purchases and experiment with Given the perishable nature The largest upcoming project, JTC BedokofFood to maintain occupancy between 80% to 100%. establishments. COLLIERS FLASH INDUSTRIAL | RESEARCH | SINGAPORE | 29 MAY 2019 facilities areGFA strictly governed, with Stepin3:the Finalpipeline inspection more products. Although shoppers City, with a total of more than one million sq Robust supply However, food factoriesin in newer and further food, these in JTC Food Zones. A final inspection is carried out,ofwith additional feetfactories (105,720 located sq meters), is slated for completion According locations Tuas Senoko tend to have most food Singapore are willing andlike able toand spend to data from JTC, a total 637,115 sq to be submitted for final review. in earlyof2020. In May 2019, an integrated Halal feet ofdocuments much lower occupancies of around 60%. We The majority food factory space (59,190 sq meters, food factories are located in the more on groceries, the majority of them Tricia Song ROBUST GROWTH OF FOOD FACTORIES Food Hub of 600,000 sq feet (55,742 sq meters) expect to lag behind supply in 2019- North Director and Headdemand | Research | equivalent to 1–2% of current food factory stock) and West regions, typically within various Singapore are already shopping modern ” driven by rising +65 in 6531 8536 in the West region was proposed by Elite 2020 but still remaintrade, sustained, tricia.song@colliers.com came on-streamStep in 2019 to date, aapproval surge from JTC Food Zones. Unit sizes range from 3,000– 4: License Partners Capital and the Singapore Malay of food delivery services and eNick Miles, head popularity of Asia-Pacific at IGD, the 31,431 sq feet (2,920 sq meters) completed 5,500 sq feet (279–511 sq meters) in older Development by Tee Yih Jia Chamber of Commerce and Industry to position Summary & operators to commerce, the need of F&B Food Manufacturing highlighted. in all ofMajor 2018.food Another 3.68developments million sq feet in of2019– premises to 10,000–40,000 sq feet (929–3,716 Nathan Nguyen factory Recommendations Singapore at the forefront of innovation in the Est. TOP Q4 2020 streamline their retail spaces, as well as the Assistant Manager | Research | 927,202 sq ft Singapore food factory sq meters) in new buildings. 2021 space (341,670 sq meters, about 9– Separately, Euromonitor International With high retail rents and the +65 6531 8692 region’s halal industry. It will costSenoko SGD80–100 Drive/Senoko Road government’s push for greater productivity and nathan.nguyen@colliers.com government’s push for (USD58–72) million and complete two years. 10% of current food factory stock) is in the productivity to in F&B, food in Singapore’s food industry. projects Singapore’innovation s grocery retailers hit Based on Colliers’ observation, demand in remains The majority of food factories COLLIERS FLASH are located in the North and West regions, typically within various JTC Food Zones. Unit sizes range from 3,000– 5,500 sq feet (279–511 sq meters) in older premises to 10,000–40,000 sq feet (929–3,716 sq meters) in new buildings.

FIRST

Food factories are eating up industrial space

Under Planned pipeline with more than 80%Construction to be completed in

factories and central kitchens,

CT Foodchain

239 We recommend 131 that occupiers to five years.

Food Concept @ 239 Pandan Loop Est. TOP Q4 2019 75,670 sq ft Pandan Loop

Mactaggart Foodlink

JTC Bedok Food City

Est. TOP 2020 57,049 sq ft Mactaggart Road

Est. TOP Q1 2020 1,137,960 sq ft

Bedok North Avenue 4 KA Foodlink, 3020 Ubi Avenue 2 Regionby Elite Region in the West region Region was proposed 2020 butfactories still remain sustained, driven by rising Sakae Building, on Defu Lane 10 Major Number of licensed food establishments food factories in the pipeline

Step

Food proce slaughterho designated

Step

An e-Applic with the req including pr flowchart a conducts a inspection. approval no commencem

A final inspe documents

Region

of the regulations and According to data from Singapore Department of Statistics as of 8 May 2019, “Food,of Beverage Tobacco” accounts for 10.4% Capital and the Singapore popularity food &delivery services and of e-total “ManufacturingPartners Source: Colliers International, Singapore FoodMalay Agency, JTC. Brick-and-mortar here to staybekeepmindful anColliers open mind to facilities Singapore Food Agency, JTC Establishments” in 2017. Source: International, Chamber of Commerce and Industry to position further from the city center in commerce, the need of F&B operators to Despite the convenience offeredviewby online of rent savings. Operators Major food Singapore at the forefront of innovation in the streamline their retail spaces, as well as the should continue to upgrade their facilities to remain 2021 grocery shopping, Miles highlighted thatcompetitive. region’s halal industry. It will cost SGD80–100 government’s push for greater productivity and (USD58–72) million and complete in two years. innovation in Singapore’s food industry. major retailers are investing to enhance store experience and improve visual Licensed food establishments by region 1.5 Number of licensed appearance, as even in advanced markets, Region food establishments Major food factories and central kitchens in the region 1.0 shoppers still use physical stores for many Food XChange @ Admiralty, Mandai Foodlink, FoodAxis @ Senoko, North Region 507 missions, top-ups, last-minute shopping JTC Food Hub @ Senoko 0.5 Jurong Food Hub, CWT Cold Hub, Westview Food Factory, JTC Poultry or because they merely enjoy shopping at West Region 455 Processing Hub @ Buroh 0.0 brick-and-mortar stores. East Region 262 Hersing Kitchen, Shimei East Kitchen, Gourmet East Kitchen Central Region 239 KA Foodlink, 3020 Ubi Avenue 2 Deepika Chandrasekar, research analyst North-East Region 131 Sakae Building, factories on Defu Lane 10 at Euromonitor International, echoed the According to data from Singapore Department of Statistics as of 8 May 2019, “Food, Beverage & Tobacco” accounts for 10.4% of total “Manufacturing Source: Colliers In 2 Establishments” in 2017. Source: Colliers International, Singapore Food Agency, JTC sentiment, adding that retailers will only intensify efforts to enhance store offerings The rising popularity of food delivery firms Deliveroo launched its second central kitchen as local consumers become increasingly like Deliveroo, GrabFood, and foodpanda in CT Hub 2 which offers a pick-up option in harder to please. is driving the steady growth of facilities April. “These fun and experiential elements are designed to store, process, cook and package “We expect demand to lag behind supply not limited to exciting product categories food in Singapore with another 3.68 million in 2019-2020 but still remain sustained driven alone; even mundane categories like grocery sqft of food factory space in the pipeline, by rising popularity of food delivery services can be transformed with such elements. according to property consulting firm Colliers. and e-commerce, the need of F&B operators For example, hypermarket FairPrice Xtra, Of this number, over 80% is scheduled to streamline their retail spaces as well as the which was revamped in end 2017, features for completion in 2019-2020 especially in government’s push for greater productivity the North, East and West regions. Prominent and innovation in Singapore’s food industry,” a parenting zone with a play area to keep projects include JTC Bedok Food City, Tricia Song, head of research at Colliers children occupied and also make shopping which has a total gross floor area (GFA) of International said in a statement. fun for the family,” she noted. more than 1 million sqft and is slated for Located mostly in North and West regions honestbee previously launched habitat completion in early 2020. An integrated and typically within various JTC Food Zones, by honestbee, a high-tech supermarket and Halal Food Hub in the West region that food factories range from as little as 3,000 dining concept which took up 60,000 sqft at spans 600,000 sqft that was proposed by sqft in older premises and up to 40,000 sqft 34 Boon Leat Terrace. habitat also features Elite Partners Capital and the Singapore in new buildings. a cashless checkout experience called Malay Chamber of Commerce and Industry Song observed that food factories nearer AutoCheckout and a robotic collection in May 2019 as part of efforts to enhance mature food manufacturing areas such as point called RoboCollect. Singapore’s halal industry, is also expected MacPherson, Pandan Loop and Bedok North to be ready in two years. The project costs are able to maintain high occupancy rates “Online grocery services are meant around $80m to $100m. between 80% to 100% although factories to complement their brick-and-mortar A total of 637,115 sqft of food factory in newer and further locations like Tuas and counterparts instead of replacing them space, equivalent to 1-2% of current food Senoko tend to have lower occupancies of because there cannot be an ultimate tradefactory stock, came onstream in 2019 YTD, around 60%. off, at least in the short term,” Chandrasekar a massive increase from the 31,431 sqft “We recommend that occupiers be mindful explained. “Online grocery services that was completed in the full-year of 2018, of the regulations and keep an open mind similarly will facilitate grocery purchases for according to data from JTC which was cited to facilities further from the city centre in sure but may not replace the tactile nature of by Colliers. In March 2018, Foodpanda view of rent savings,” Song said. “Operators handpicking groceries or testing for product unveiled its first central kitchen with a dine-in should continue to upgrade their facilities to quality; so, the future would be in the option in Woodlands Industrial Xchange, and remain competitive.” seamless integration of online and offline.” Above 200

101 – 200

10 - 100

1-8

Note: TOP refers to Temporary Occupation Permit. 1 sq meter = 10.7639 sq feet. USD1 = SGD1.38 as of 23 May 2019. Source: Colliers International, Singapore Food Agency, JTC.

Uncompleted GFA (in sq ft million)

Central Region North-East Region

Est. TOP 2020 185,677 sq ft Pandan Loop

Uncompleted GFA (in sq ft million)

strong for food factories nearerNORTH-EAST the city center, located in industrial zones,by haveregion Licensed a retail sales value less thanfood thatestablishments predicted 2019-2020. 1.5 This supply influx is located mainly in WEST risen in demand in recent years. NORTH with mature food manufacturing areas such asEAST Number of licensed Monthly rents achieved in the North, East and West regions. by IGD at $8.9b by 2023, ranking FairPrice established food zones range MacPherson, Pandan Loop and Bedok North able Region food establishments Major food factories and central kitchens in the region 1.0 SGD1.5–2.4 (USD1.1–1.7) as the dominant grocery playeraround in the Food XChange @ Admiralty, Mandai Foodlink, FoodAxis @ Senoko, The largest upcoming project, JTC Bedok Food to maintain occupancy between 80% to 100%. psf, while food factories North Region 507 transacted between SGD142–325 JTC Food Hub @ Senoko City, with a total However, food factories in newer and further near future for both online and (USD103–236) offlinepsf.as 0.5 GFA of more than one million sq CENTRAL Juronglocations Food Hub,like CWTTuas Cold and Hub, Senoko Westview Foodto Factory, tend have JTC Poultry feet (105,720 sq meters), is slated for completion We forecast sustained West Region 455 demand it continues to leverage on its huge local Processing Hub @ Buroh but robust supply should keep in early 2020. much lower occupancies of around 60%. We 0.0In May 2019, an integrated Halal rents and prices of food factories East for Region 262 Hersing Kitchen, Shimei East Kitchen, Gourmet East Kitchen clientele and provide the masses. largely stable over the next three Food Hub of 600,000 sq feet (55,742 sq meters) North East West Central expect demand to lag behind supply in 2019-

Application

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

FIRST

Volocopter

Air taxis take flight in Singapore skies

ith Singapore’s light traffic, it may seem that firms that build passenger drones are struggling to find a role for themselves in the urban air mobility (UAM) space. In Singapore, two firms so far have confirmed that they are bringing in passenger drones to the city. German firm Volocopter is looking to build an air taxi port in southern Singapore waters and is scheduling trials for its air taxi operations in the second half of 2019. Earlier in 2018, American company Bell Helicopter announced that its air taxis will take flight by 2025. Although Singapore trails only behind Hong Kong in McKinsey’s global transport index with its highly efficient public transportation infrastructure in place, paired with innovative mobility options such as electric car sharing and on-demand buses, there are still routes where air taxis could gain further traction and address systematic pain points. “For instance, passengers travelling between Changi Airport and Sentosa or Jurong will still likely save a lot of time and hassle if they choose air taxis. The regulatory infrastructure in Singapore (e.g., against the use of drones) is well placed to provide a safe operating environment for air taxis. The same cannot be said of 12

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

other jurisdictions,” assistant professor at Singapore Management University, Terence Fan, told Singapore Business Review. Growth outside Singapore However, there are also Singapore-grown firms seeking to kickstart the passenger drone business outside their home country. Consulting firm Roland Berger estimates that the number of passenger drones in operation could grow to 3,000 by 2025 and hit 98,000 by 2050, although they are only expected to take to the skies by 2020. Homegrown air taxi startup Ascent made the decision to launch in the Philippines last April, and Neo Aeronautics is bringing its passenger air vehicles (PAVs) to California by late 2020. Lionel Sinai-Sinelnikoff, founder and CEO of Ascent, stated that when thinking of a new market, the factors they kept in mind were a country’s traffic conditions, a ready ecosystem of helipads, helicopters and regulations compatible with such schemes of operation which are all present in the Philippines. “Given these conditions, we’re hopeful of

what we can do within the Philippines and the response has looked very encouraging thus far,” Sinai-Sinelnikoff said. “The Philippines is and has been an attractive destination for businesses especially in the most recent years.” On their part, Neo Aeronautics’ founder Neo Kok Beng explained that they don’t currently operate air taxis due to US Federal Aviation Administration (FAA) regulations but enable club members to use the PAVs for recreational and sports purposes. Its Part 103 ultralight category Crimson S8 unit also requires no pilot license, which means anyone can fly after attending a training session. “The NEO Aeronautics’ Crimson S8 Personal Aerial Vehicle (PAV) is designed in conformity to existing US FAA 14 CFR Part 103 (Ultralight category). There are clear rules and regulations on its certification, production and usage for us to work on the commercialisation milestones,” Beng said, adding that they chose California partly due to its vibrant aerospace industries. “We see PAVs as complementary option to urban mobility globally, not a replacement. It is like the low-cost or budget airlines, they will expand the pie,” he said. “If we are to launch our services in Singapore, we believe it will be on fixed routes, such as Changi airport to Marina Bay or Sentosa. I believe an interesting option will be Singapore to Batam, and maybe even Singapore to Johor Bahru with very supportive immigration authorities. Another option is to provide recreational and sightseeing flights and enhance Singapore’s position in tourism,” he added. Air taxis to start small Dominated by high-rise buildings and heavy tropical downpours, air taxis first need to overcome logistical obstacles to be able to navigate Singapore’s challenging environment, according to Fan of SMU. During peak times, Fan notes that the government is likely to initially limit air taxis to only limited air corridors in an effort to limit the applicability of air taxis to the general public as well as potential congestion in these air taxis. Most developments in the country’s urban air mobility space revolve around delivery and e-commerce that are split

“The number of passenger drones in operation could grow to 3,000 by 2025 and hit 98,000 by 2050, although they are only expected to take flight by 2020.”

FIRST across a total of six projects, according to Roland Berger, which estimates that 100 projects have taken off globally. Aeronautics company Airbus is currently testing its ship-to-shore delivery drones. Singtel, in partnership with NCS and HopeTechnik, is also looking out for possibilities to offer “Drone-as-a-Service,” suggesting how passenger transport may be taking the backseat to drone solutions that aim to resolve logistical issues around online retail. “This is driven by the very dense public area/ high population density (which drives the need for relief for delivery & e-commerce, as well as makes it more difficult to build landing ports) and a good public transportation system (which has less needs for passenger transport),” Nikhil Sachdeva, senior consultant at Roland Berger, said. Fan also said that launching in a different market with worse traffic conditions than that of Singapore would make more sense, especially when its well-positioned in terms of urban mobility. “Air taxis will likely still start out small in Singapore,” Fan said. “People need to

Ascent air taxis

learn to increase their trust on air taxis and try them out before they can take off in a big way.” However, this doesn’t mean that air taxis will not grow in Singapore as congested urban areas and heightened street traffic open the doors for PAV businesses. “We must remember that air taxis also

have multiple use cases: they can be used to avoid traffic, for medical evacuation, for business travellers, for island-hopping, etc. Exactly which use case(s) become relevant for the Singapore market is yet to be seen, and depends on a number of factors including actions by market players, as well as the government,” concluded Sachdeva.

Work-to-home trips to be reduced to 20 minutes The Land Transport Plan will add more cycling paths and rail lines.

ingapore, only trailing behind Hong Kong in having the most efficient and connected transport system, seems unstoppable in its efforts to simplify connectivity across the island with the Land Transport Plan 2040. The ambitious scheme eyes to make journeys take no more than 20 minutes for commuters to get to and from one’s home to the nearest neighbourhood centre and 45 minutes or less to complete peak-period journeys between homes and workplaces. The Land Transport Authority (LTA) is also eyeing to build about 700 km of cycling paths by 2030 and setting up more Integrated Transport Hubs (ITHs) including Bidadari, Buangkok, Punggol North, Pasir Ris, Tampines North and Tengah. Aside from this, the scheme includes a feasibility study of setting up a new rail line between the north and northeast regions of Singapore and the extension of the Downtown and Thomson-East Coast Lines by 2040, and two new stations, Brickland and Sungei Kadut, will be added to the North-South Line. The effect of this nationwide plan is expected to be felt in other sectors, according to experts. “We see the new plans as benefiting the property market. The new industrial cluster at Sungei Kadut will benefit from the improved connectivity and addresses a long time concern of companies who had some difficulties hiring,” Huttons Asia said. At the sidelines of the International Transport

Forum (ITF) 2019 in Leipzig, Germany, Dr. Philipp Rode, executive director of LSE Cities and Urban Age from the London School of Economics and Political Science (LSE), together with LSE Cities policy fellow Catarina Heeckt, discussed their study entitled “National Transport Policy and Cities: Key policy interventions to drive compact and connected urban growth.” Rode highlighted how Singapore’s nature as a city is a big advantage in terms of carrying out wideranging transport and urban policies. LTA’s leadership role Meanwhile, Dr. Anjali Mahendra, director of research at US-based think tank World Resources Institute (WRI), commented that LTA overseeing both land and transport systems worked well for Singapore’s urban affairs. “You will not imagine how rare that combined transport and land governing body is. It’s almost non-existent in many other like Indian cities where I come from, or African cities, they are separate entities. And because of that you have this issue of a land development occurring wherever land is cheap. It’s not happening in conjunction with other transport infrastructures,” Mahendra told Singapore Business Review at the sidelines of the event. “You can’t just solve problems regarding the public transport. You have to have road pricing

Dr. Philipp Rode, London School of Economics

and manage private vehicle demand,” Mahendra continued, adding that Singapore is one of the first globally to implement electronic road pricing. This, according to her, has affected the city-state’s car ownership, which goes by around 554,000 in April 2019 based on data from LTA. However, according to Rode, Singapore needs to consider urban sustainability issues although it has already established itself as one of the pioneers in the sustainable urban and transport planning. “I think, even a place like Singapore needs to do much more in order to reduce carbon emissions, reduce the number of private vehicle use, increase the greening of buildings, the reduction of using conventional concrete steel sands, which are scarce resources we are running out,” he said.

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

FIRST

Singapore Airlines (@singaporeair) Instagram

How firms spend their #insta budgets

nstagram is the top social media platform with over 2 million Singaporean users, so we asked the experts who is doing it right and how. Singapore Airlines (@singaporeair) is the instagram king of Singapore with 1.7 million followers and there is a lot wouldbe insta-marketers and even hopeful #influencers can learn from the airline. A key to their success is engaging with fans by encouraging them to tag their posts #FlySQ and #SQavgeek and there are over 100,000 photos on the platform with these hashtags. “They have high quality engagement with their fans, where admin would literally respond to most comments,” Rina Lim, managing director of integrated marketing agency Quirk, and Jaclyn Tan, Quirk’s senior business strategist, explained to Singapore Business Review. It is nice to be liked, and even talked about, but the aim for brands should be to drive sales from Instagram through e-commerce. Firms in the e-commerce startup phase are trying to put more of that element into social media, and I feel like that’s where smaller shops, and other bigger names, have more free play,” Karen Soo, head of marketing agency Reprise Singapore, said. Meanwhile, fashion retailer Love, Bonito (@lovebonito) has also managed 14

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

to marry a little bit of both its brand and the e-commerce element by allowing its Instagram followers to #taptoshop, a feature enabled by the platform thanks to Shopify wherein a mere tap will allow customers to see how much certain pieces go for. Its third physical store in Funan will also offer customer touch-points revolving around the marriage between e-commerce and social media through “Instagrammable” spots and an express counter for e-commerce orders. Likewise, Singapore-born lingerie store Perk by Kate (@perkbykate), which was founded in 2012, has merged social media and e-commerce, urging its own customers to be part of its #PERKSQUAD on Instagram by posting photos flaunting their buys and celebrating ‘beauty of all sizes’. Steps to take before shooting But what other ingredients do businesses need to convert customers’ hearts and comments into sales and profit? According to Stefan Lim, head of digital marketing consultancy firm clickTRUE’s social media arm, whilst there is no right or wrong given the nature of Instagram’s open platform, qualitative factors such as shareability, how inspirational a suite of content is, relevance to life and appeal and willingness to be associated with an Instagram post is the first step to conceptualising content.

Having natural light and clean backgrounds may well be the first step, Lim noted. “When you have a space and the property, you basically need to think about how to make a space on the property popular. And one of the ways is to make sure that these spaces and places are photogenic,” Lim explained. “A good example would be Funan which has a lot of people going there and taking photos. They’re doing quite well in terms of how they associate themselves to interesting, unique spaces. And them having local brands, designers and photographers setting up shop and offering workshops is an added ‘Instagram’ opportunity.” He also noted that local businesses such as boutique hotel Lloyd’s Inn Singapore (@ lloydsinn), stationery and lifestyle brand The Paper Bunny (@thepaperbunny), accessory retailer The Ordinary Co (@theordinaryco) and cafe Amber Ember (@amberembersg) have succeeded in having consistency with their feeds, from the photos they post to create an overarching, aesthetically pleasing ‘theme’ across their respective feeds to the colloquial and targeted voice they take on with their followers. “We’re trying to put in place a frame, a structure, a thinking, and help clients think through how they want to stand out and differentiate themselves against everybody else. Then, we can think of what types of content and campaigns we can launch - there’s a lot of planning, and a lot of storytelling involved.” Lim further underlined that businesses need to be able to look at Instagram beyond a traditional communications platform. “How you project your voice, how you speak, how you write a copy is going to be different from how you write a copy on a poster. It’s actually a challenge that we face with some businesses, so that part of the work is also something that we try to do it for the client,” he said. This sentiment was echoed by Soo, who added that when creating content, firms need to be mindful of what role Instagram plays in their business. “In the case of Nestle SJORA (@ sjorasingapore), they don’t sell much in retail stores, but they are heavily sold in QSRs like Long John Silver’s and other fast food chains. So their aim isn’t to expand their brand per se but just make sure that people know about them. For them it’s about being visible to their target audience through resonating content,” Soo explained. As a result, Nestle SJORA’s Instagram page

FIRST is filled with quirky illustrations, crossword puzzle, word searches, and short animations which are brought together through its orange, pink and yellow pastel colours. “Nowadays, everybody’s interested in little illustrations which are different from the traditional photos you just post on the platform. It’s essentially something we’ve found actually resonates with both the younger and older folks,” she added. Not just snapping photos GoJek Singapore (@gojeksg) recently launched dedicated Instagram and Facebook accounts which feature postings of tongue-in-cheek illustrations, and are said to later release more ‘fun and educational’ posts that users will find useful. “Our social media content will comprise a mix of videos, GIFs, memes, lifestyle recommendations, product updates and funky illustrations that we hope users will love and find useful,” a GoJek spokesperson said. And it is not just business-to-consumer (B2C) firms jumping on this new trend. The Central Provident Fund (CPF) Board (@ cpf_board) has made efforts to send little messages to its followers to save money and be more #centsible with the use of colourful yet simple illustrations reminiscent of hodge-podge magazine cutouts thrown together and puns to accompany them. In terms of how much it costs to come up with witty and engaging marketing strategies, they could range between between 10 and 15% of a firm’s overall annual budget. “Content production alone can see anything from $3,000 to $8,000 per month,” Lim said. “But even as budgets differ depending on the firm and industry, Instagram-focused marketing budgets are something that we did not see one or two years ago.” #goodbyehashtags? Soo also observed that Instagram marketing may be witnessing a new shift with the absence of unique hashtags, or even hashtags, accompanying posts to boost viewership. Citing a personal encounter with her family, she noted that Instagrammers, or at least the younger generation, are instead turning to ‘tagging’ other users to increase a post’s popularity. Soo said, “You can actually see some Instagram posts on your Facebook profiles and other similar things along those lines. The upgrade just automatically happened, so marketing people have to be extra vigilant of these little changes, as it can implicate clients and their Instagram pages.”

INTERVIEW

Inside Love, Bonito’s largest physical store in Funan

ove, Bonito has launched its third physical store in the upcoming mall Funan and has started offering customer touch points such as “Instagrammable” spots, an express counter for e-commerce orders, and on-demand personal stylists. The fashion e-commerce player is looking to offer a retail experience designed to be “thoughtful and feminine” whilst taking into account the feedback of customers on its first two stores. In an exclusive interview with Singapore Business Review, Love, Bonito co-founder Rachel Lim talks about the new features of their biggest store to date, as well as some future plans to move their stores into the combination of the digital and physical space. Lim also shares the investments they are making to improve store fixtures and train retail staff. Can you describe what the third physical store of Love, Bonito will be like? Our third store will definitely offer a different retail experience, with a refreshed design and layout that is distinctly thoughtful and feminine. More importantly, the store will hold dedicated and designated space for us to bring our community together to experience the brand, via workshops and events. The store will also see the roll-out of many customer-centric touch points such as multiple, photo-worthy Instagrammable spots, an express counter for e-commerce order collections, and value-added services like alterations and personal stylists on demand - ready to give honest fashion advice to our customers, ensuring they always leave with their head a little higher, voice a little louder. These are a few examples, and we will see more features roll out throughout the year.

Love, Bonito co-founder Rachel Lim

delightful shopping experience for them – that happens to include omnichannel, or phygital touchpoints that we’ll continue to explore.

Has investing in offline made much more of a difference than investing in offline or are they typically the same thing? Investing in offline has allowed people to really get to know the brand in a more up-close and personal kind of way; they get to touch and feel the brand, so to speak, and that helps us to win What types of investments have you made to their trust. Offline experiences also allow women improve offline retail services? to experience the heart of the brand, e.g., through Everything starts with people, so our main our community workshops. We’ve also seen how investment goes into the training of the people on having a physical space helps to create more the ground. We want to make sure our retail staff brand awareness in general. are not simply driven by commission but focus on building a relationship with our customers. Also, Do you think retailers in Singapore are understanding that our stores see a lot of footfall, ready to take on the same strategy that there can be wear and tear, so we are particular Love, Bonito is undertaking? about investing in sturdier and longer-lasting I think it differs very much on, firstly, the product fixtures in the store. that you’re selling, and secondly, the audience that you have. It really depends on what your Recently, there’s been this trend of audience is looking for when they shop, your phygital stores, are you looking into that product, and your brand. concept as well? I think there is no one fixed method or a sure Yes, I think we’re already taking steps to move way to win the market. I think you really have to in that direction, but never for the sake of dive deep and observe based on your unique trends. We keep our customers at the heart of product offering and target audience. our efforts, and focus on delivering a seamless, By Danielle Isaac

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

FIRST HOW THE GREAT ROOM IS RIDING ON ASIA’S CO-WORKING WAVE

Retailers turn to pop-ups

Jaelle Ang, CEO of The Great Room

s the city’s flexible workspace market rapidly matures, Singapore-based premium hospitality-led co-working space operator The Great Room is sharpening its focus on high-end clientele as part of the growing movement towards industry segmentation. Offering a pricier value proposition than most flexible work setups with monthly hot desk rates starting from $750 and a dedicated office going for $2,500 a month, The Great Room is specifically targeting deep-pocketed “grown-ups,” high-growth tech companies and innovation teams of established multinationals that constitute a stickier source of rental income. In fact, startups account for only 25% of The Great Room’s tenant mix as the space remains fixated on luring and retaining Fortune 500 companies, enterprises, SMEs and private equity houses, which have an average tenure of 1.5 to 2 times longer than a typical startup. “They are more value-sensitive than price-sensitive providing significantly larger margins as well. It is a segment that is the largest, growing the fastest and has the lowest penetration in Asia currently. We want to race to build on our dominance in this attractive segment,” according to Jaelle Ang, CEO of The Great Room. With relatively higher prices, how do you market The Great Room to future tenants? We cater to companies that are more value rather than price-sensitive – our members have access to town hall space, kitchens and pantries, and vibrant community events – each an extension that adds to their overall footprint within a building. We believe that “great design attracts a like-minded community.” We have member companies from technology, finance, lifestyle and creative industries at The Great Room who desire to “have it all” - the infrastructure for peak performance and productivity plus the energy and culture of innovative startups. They are curious and ambitious and would find themselves as easily attracted to sessions of CEO media coaching as they are to rubbing shoulders with other power brokers at a whiskey-tasting session. You’ve just opened your first space in pricey Hong Kong – can you tell us the reason behind this move? Hong Kong is a very vibrant and exciting market for us. We see winning Hong Kong as a very important springboard for our expansion strategy across Asia Pacific. One cannot win Asia Pacific without winning Singapore and Hong Kong. Regionally, our goal is to establish a presence in key financial centres in Asia in the next three years. We are already in negotiation with Hong Kong landlords for strategic partnerships in Hong Kong and key gateway cities in China.

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

aking over the 2,800-sqft space previously occupied by luxury retailer Hermes, Mosscape Concept is yet another addition to the growing experiential concepts occupying Singapore’s retail scene. Mosscape Concept allows customers to peruse preserved plants, attend workshops to learn about the art of creating terrariums and experience a curated farm-to-fork takeaway menu with locally-grown produce. The emergence of such experiential retail concepts is starting to permeate many other industries beyond those seen in the high street – from sports goods Decathlon to Cold Storage – and analysts contend that shifting consumer tastes are driving the momentum.

Mosscape Concept

increasingly expecting an engaging and value-for-time experience more than value-for-money experience during their limited time in stores.” French sporting goods retailer Decathlon is similarly riding on the trend with the launch of a 5,000-sqm store called the Decathlon Singapore Lab, which lets customers test the Beyond transactional functions products they have on display in freeDeepika Chandrasekar, Euromonitor to-play experience zones. Decathlon International analyst, said, “Not has also equipped its new store with only does the offering of an in-store features to support the online-toexperiential element entice and engage offline experience. customers, but it also does justice to the high rental costs that retailers face Benefits of pop-ups in land-scarce Singapore and the flat Retailers embracing the experiential retail sentiment.” retail trend benefit not only from In the case of Mosscape Concept, the higher store footfall but also pop-up store not only engages visitors an upswing in loyal customers, with an array of eye-catching plants that according to Chandrasekar, citing the would beautify Singaporean homes, positive response when improvement but also serves up an exclusive menu of retailer Home Fix launched a Do-Itsalads and food products. Visitors are With-You service as an experiential also enticed to come back again through concept. She said the workshops a line-up of seminars led by experts teaching customers how to fix and espousing a healthier lifestyle. assemble furniture themselves have Chandrasekar reckoned that the seen good participation rates due to experiential retail trend is driven by their immersive quality. the fact that whilst physical stores and Shirley Zhu, programme director shopping malls in Singapore still see at IGD Asia, noted that Japanese customer traffic, these same stores retailer Don Don Donki, which is have fallen behind their regional famous for its baked sweet potatoes, counterparts in Bangkok and Kuala uses smell to draw people into the Lumpur. The spate of store revamps store when they walk out of the seen across Singapore could then be MRT station. “They can then browse taken as the country’s way of catching through a wide variety of products up to a global trend towards higher that are made and designed in Japan customer expectations when stepping and also enjoy a meal at the store.” into a physical store. Zhu reckoned that brands need to “Simply offering high quality understand the best technologies that products in stores or online does not will have the biggest impact on their do the trick for consumers anymore,” category, and incorporate these in she said. “The highly demanding their experiential store planning. and time-starved Singaporeans are

CO-PUBLISHED CORPORATE PROFILE

Borries Schüler, Member of the Executive Board and Chief Product Management & Engineering Officer

Hoffmann’s 100 years of high quality is just the beginning The company celebrates its 100th year with a glimpse into the future of the business.

eaching 100 years is not a customary feat for any company, but Hoffmann, the headquarters of the Hoffmann Group is ready to brave another centennial if it means serving its 135,000 customers and counting. In 1919, not too long after Germany announced a new republic, Josef Hoffmann started selling and trading technical equipment in Munich, carefully observing the market and augmenting the product line according to customers’ needs When Josef’s son, Franz Hoffmann, joined the business in 1936, he made the most simple, focussed and useful tool for any tradesman of that time, an in-house catalogue of product listings from different manufacturers which would become the inspiration for the Hoffmann catalogue. Now, the company assists its customers with almost 38,000 tools under the GARANT brand which started in 1973. GARANT, as the company puts it, reflects Hoffman Group’s manufacturing competence in machining technology, clamping technology, metrology, grinding and cutting, hand tools, as well as workstations and storage equipment. Apart from this mainstay in the company’s product portfolio, the company also carries its HOLEX brand and 500 other industrial quality brands. “We just find the right product to adapt to our local customer needs,” Borries Schüler, chief product management & engineering officer at Hoffmann, said during an interview with

Singapore Business Review. Hoffmann Group has three hubs in Asia, not to mention the other subsidiaries scattered across Europe and the Americas. For Southeast Asia, Hoffmann Group has its headquarters in Singapore, Shanghai for its Chinese market and Pune for its India operations. One of the reasons why the company has grown in Asia can be attributed to its customers. “In Asia, we figure out what products or services can help our customer get better,” Schüler noted. This personal attention to customers is complemented by Hoffmann Group’s motto “ever better,” which explains the importance it gives to high quality. “We are never happy about the situation, we improve the situation, every market in Europe and also in Asia,” said Martin Reichenecker, chief sales and marketing officer and spokesman of the board at Hoffmann, describing a typical European behaviour.

Providing expertise As part of its end-to-end service, the company also focuses on providing expert and technical advice to its customers. “As long as something is produced with metals or is maintained in the company, we can give added value and we help

Martin Reichenecker Member and Spokesman of the Executive Board Chief Sales and Marketing Officer

our customers to improve the situation all in the tools and to become even more successful,” Reichenecker added. Meanwhile, Schüler explained that the Singapore headquarters is serving as an incubator for other ASEAN markets and may very well serve as a blueprint for its European counterparts which are still in the nascent stages of a digital shift. “It’s good to be forced stronger into digitalisation here, then take what we learn and take it back to Europe or America as well,” he added. As part of its commitment to provide fast delivery of products, Hoffmann Group recently revealed its newest 21.5-hectare facility building project in Nuremberg, named LogisticCity, which is currently under construction and set to be launched in 2021. “Best delivery performance ensures our customers that they don’t have to put so many tools on stock. We are able to deliver worldwide very fast and therefore we need a new logistic hub,” Reichenecker commented. Putting the customer first in any decision, and complementing this with precise attention to high quality, is what makes Hoffmann Group a step ahead, a quality tool master and expert partner in the 4.0 era, and maybe the next 100 years.

“We are never happy about the situation; we improve the situation for every market in Europe and in Asia.” SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

STARTUPS

Fashion startup BlinQ banks on AR tech to revolutionise retail

ingapore-based luxury fashion startup BlinQ assures that it’s not your run-of-the-mill shopping platform as it banks on its app’s augmented reality (AR) feature to allow customers to try on outfits virtually. The AR feature, however, is just one key component of BlinQ’s value proposition, the other being mobile commerce. It introduces options to rent or buy the product and provides a curated package providing them with various options to choose from a subscription model. BlinQ also enhances its logistics and warehousing

capabilities to store the luxury products for sale or rent on its platform on a centralised location. Such products are usually fulfilled from Europe and shipped throughout Southeast Asia. “The final pillar of which BlinQ heavily relies on is automated logistics and warehousing. This important backend function allows for our products and stock keeping units (SKUs) to get to the right customers at the right time in order to create a superior user experience,” CEO and founder Bob Chua told Singapore Business Review. This function would also ensure that a wider range of products can be delivered at a shorter period of time. In March, BlinQ successfully bagged US$2m from its private investors, and Chua added that they are planning another funding round. “We have assembled a solid founding team which comprise of the best minds in tech, eCommerce, fashion and consultancy. We have also invested heavily in the development of our platform so BlinQ 2.0, which will be a next generation of features based on our current research and development,” Chua said.

Geniebook raises $1.5m in pre-series A round Geniebook CEO and co-founder Neo Zhizhong commented, “Through attempting worksheets targeting their weaker concepts, we realised that our students showed a significant improvement compared to repeated practice using general assessment papers. This led to the creation of the Geniebook platform, which curates targeted Local edtech startup Geniebook raised worksheets based on each individual $1.5m in its pre-series A funding round. This round of funding was led by Apricot student’s strengths and weaknesses.” The platform has expanded its services Capital. Funding from this pre-series to include a Home Edition Package, where A round will be used to expand and parents can use the app to track their child’s strengthen Geniebook’s data science progress and assign worksheets. and curriculum team to improve upon “With more than 80,000 questions the learning platform for its users. The in our question bank developed by funding will also be used in research our in-house curriculum team, and and development of the platform’s AI technology in order to further develop the the ability to track and personalise progress, the platform will help to roadmap of Geniebook’s capabilities. Established in 2016, Geniebook offers identify each student’s strengths and weaknesses to promote mastery of their students a personalised experience that weaker concepts,” said Alicia Cheong, specifically targets their weak areas for revision, and generates reports based on Geniebook’s chief revenue officer and co-founder. each student’s progress.

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

Services marketplace Ovvy scores $600,000 in seed funding

hen former professional football player, Thomas Beattie, came to Singapore, he often found himself connecting his expat friends who were in need of plumbing and handyman services to vendors he knew around the area. After observing significant market demand and no homegrown solution, Beattie tied up with fashion designer and entrepreneur, Mia Gigandet, to launch Ovvy, a domestic service marketplace that aims to execute what he was once doing manually. Since its launch in June 2018, Ovvy has generated over $100,000 in revenue by connecting users in need of painting, plumbing, electrical work, handyman, aircon maintenance, cleaning and moving services with vendors on its mobile platform. In May 2019, the startup raised $600,000 in a seed funding round led by angel investor Rapzo Capital as it aims to expand the offerings of its domestic service marketplace and penetrate the B2B space. “You’re never going to have a lack of people needing things doing. On the other hand, we felt there was a lot of talent and skills within the service provider sector,” Beattie told Singapore Business Review. “Ovvy was trying to link up those two demographics in Singapore which we felt didn’t really connect and wasn’t really executed efficiently.” Unlike similar apps that automatically assign a service provider to a customer, users have the freedom to pick from an extensive list of vendors vetted by a TripAdvisor-like review system. Through its integration with Facebook, users can browse reviews posted by friends or family members. “We wanted the customer to have the freedom to choose who comes to their home, who fulfils that job and who’s the right person for them,” he added. The mobile app also features a rewards system that doles out points to service providers for carrying out quality work, which can then be redeemed for cash. Customers can also unlock Ovvy points for credit that can then be used on the platform for subsequent transactions. With Ovvy, consumers do not pay vendors directly as payments are transferred into an escrow account and funds are only released when the job is marked as complete. However, the monetisation opportunity in the B2C space is minimal as the app takes only 10% surcharge from each transaction, according to Beattie, who seeks to achieve the next stage of growth for Ovvy in the B2B segment. “We don’t really use the B2C platform as a way to monetise. For us, it’s really a way to create value and validate the product in the market and allow us to identify the best service providers in each subcategory,” he said.

CO-PUBLISHED CORPORATE PROFILE

Fira Barcelona looks at the future of retail at first-ever RBEWC The inaugural event was graced by more than 200 speakers from over 100 companies.

during the Retail & Brand Experience the appearance of new concepts both in rands and retailers all over the world World Congress in Barcelona last May. business and technology. are undergoing a transformation Oyper won in the disruptive technology This tenet is what gathered more than that is changing not only how category with their intelligent shopping 200 speakers from different companies companies sell their products and assistant, whilst Aura Vision was and 5,500 visitors around the world services but also how consumers recognised for a digital initiative utilising at the event in Barcelona. During the go through their buying experience. a camera that detects the busiest three-day event, 120 sessions were Highlighting the digital shift happening areas of stores and the age range of held around six themes: customer in the global retail landscape, data from their visitors. These technologies have experience; omnichannel and digital; i-SCOOP revealed that 90% of people use helped the two companies improve real estate sector; retail technologies; their smartphones in stores while shopping their customer relations by providing personalisation; and new models and mainly to compare prices, look up product an omnipresent and omniscient entity trends. Delegates information, and to assist customers in their shopping, check reviews “We have seen great interest and speakers also whilst being able to better target talked about the online. in the transformation that their human resources to address the eight sectors in But retailers brands and businesses immediate needs of their target market the retail industry and brands are in their physical stores. that are undergoing now going beyond must face at a key moment of change in the digital Meanwhile, Localoo won the best heavy digital just providing environment and in the way transformation, digital brand award with an application information and that makes it possible to manage opening up online customers buy and consume.” including fashion, and enhance the web visibility and mass consumption, purchase options the location of stores in the global department stores and shopping centres, to their customers in their quest for positioning system or GPS, allowing beauty products, electronics, online full digitalisation by utilising various companies and brands to have more shopping, furniture, and banking. innovative technologies, including accurate visibility and exposure whilst Some of the speakers were executives artificial intelligence, virtual assistants, helping consumers find these stores and from world-leading companies like Ikea, and augmented reality, amongst others, brands using their mobile phones. Purina Petcare, British Airways, Google, to provide a whole new retail experience The second edition of the Retail & Carrefour, Hoff, Mvideo, Renova, Value for its clients. And for participants and Brand Experience World Congress will Retail, Levi’s, Via Emilia, El Corte Ingles, delegates at the inaugural Retail & take place on 19 to 21 May 2020 at Fira Casa Ametller, and Muji. Brand Experience World Congress held in de Barcelona, and it’s expected to attract Startup companies which employ Barcelona last May, there’s only one way hundreds of brands and retailers and innovative technologies in their efforts to go for the sector—and that is digital. thousands of visitors and participants. to digitalise were also recognised “In this first edition, we have been able to see the great interest in the transformation that brands and businesses must face at a key moment of change in the digital environment and in the way customers buy and consume,” said Alba Batiste, director of the Retail & Brand Experience World Congress. This focus on digitalisation in the retail sector is largely based on the changing needs of consumers and the embeddedness of technology in the way people live their lives, particularly in purchasing commodities. For instance, the International Data Corporation presented an outlook, noting that at least 55% of all organisations globally will go digital or have some digital component in their operations by 2020, which will Retail & Brand Experience World Congress hosted by Fira Barcelona transform markets and industries with

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

FINANCIAL INSIGHT: IPO

REITs to the rescue for IPO launches

The sector accounted for almost half of the US$36.16b total of proceeds that have been raised since 2009.

he pipeline of initial public offerings (IPOs) on the Singapore bourse is expected to rebound from the lacklustre performance recorded in 2018 as the real estate investment trust (REIT), business trust (BT) and healthcare sectors could help map the bourse’s turnaround story. The 2019 IPO performance YTD has so far been encouraging and exceeding the number of offerings and listing proceeds seen during the same period in 2018, according to Tay Hwee Ling, Deloitte Southeast Asia and Singapore’s global IFRS and offerings services leader. “There have been seven IPOs which raised $1.53b in 2019’s five-month period, which is close to almost triple that of 2018’s five-month performance, and more than six times that of the funds raised during the same period in 2017,” she told Singapore Business Review. Amongst these offerings was an IPO launched by ARA US Hospitality Trust in May, the first listed US hospitality trust on the Singapore Exchange (SGX), which priced its 379.78 million stapled securities at US$0.88 apiece. Its proceeds are expected to hit US$498m. The positive sentiment was shared by Tham Tuck Seng, capital markets leader at PwC Singapore, who added that international investors’ familiarity with the local bourse is expected to boost listing activity in the months to come. “It is the most international exchange amongst the major exchanges in the world. PwC conducted a global survey to ask respondents which exchanges the issuers will

There have been seven IPOs which raised $1.53b in 2019’s fivemonth period, which is close to almost triple that of 2018’s five-month performance.

All of the $422m injected into the REITs and BTs sector in 2018 was reportedly raised by Sasseur REIT.

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

consider beyond their home exchange in 2030 for an IPO, and 11% cited the SGX,” he noted. Tham acknowledged that the factors that prompted increased volatility at the end of 2018, and continued caution in 2019, have not disappeared. IPOs take a hit in 2018 Singapore was not spared from heightened market volatility after IPO proceeds crashed to $730m across 15 offerings in 2018 compared to the $4.7b reached across 20 IPOs in 2017, according to PwC’s Equity Capital Markets Watch report. Globally, the IPO market felt the consequences of trade and geopolitical tensions as the number of IPOs decreased from 1,081 to 870 for YTD 30 September. A separate report by Deloitte saw the city’s IPO fund market dethroned by Vietnam and Thailand, which dominated with three blockbuster listings in 2018. Vietnam’s IPO funds made up more than half or $6.2b of the total $12b raised across Southeast Asia, whilst the SGX raised a mere $715m as of November 2018, 85% lower than the $4.6b raised for the full year in 2017. In fact, delayed IPOs have generally been piling up in Singapore, with firms either struggling to get deals done or piling into equity offerings in nearby, and regional IPO destination frontrunner, Vietnam. In April 2018, Bangladesh firm Summit Power International revealed to its investors that it would shelve a share sale targeting to raise US$260m. The news

FINANCIAL INSIGHT: IPO US REIT Singapore IPO was 6.7 times oversubscribed, raising $273m. Of the 34.09 million units initially available to the general public, the firm received 9,064 applications for 227.76 million units, whilst the placement tranche of 228.68 million units available to investors outside the US was also oversubscribed. A wholly-owned subsidiary of Keppel Capital also entered into a subscription agreement with KBS US Prime Property Management to subscribe for 6.765% of the units in the REIT. Meanwhile, Singapore Press Holdings’ (SPH) unit Time Properties Private entered into a call option agreement with REIT sponsor KBS Asia Partners to acquire a 20% interest in KBS US Prime Property Management for $19.77m (US$14.6m). Both Keppel Capital and SPH have each committed $74.48m (US$55m), whilst AT Investments committed $88.02m (US$65m) for an 8% stake. Despite its less than stellar take-up, Eagle Hospitality REIT’s IPO managed to raise approximately $792m (US$566m), which accounted for more than 50% of the total amount raised in the first five months of 2019 on SGX of $1.53b.

IPO amount raised by industry, 2016-2019

Source: Deloitte

came less than two weeks after Malaysian clinic operator Qualitas Medical delayed its own IPO, looking to raise $100m. Almost six years prior, Dynasty REIT pulled back on what could have been the city’s largest IPO in 2012 as investor sentiment soured on the back of worsening market conditions. Even regional peer Hong Kong was not spared. Logistics property platform ESR Cayman postponed what would have been the country’s largest IPO in 2019 YTD after citing volatile market conditions. The firm was set to offer 560.7 million shares through its Hong Kong IPO on 6 June, of which 94.4% would be placed for international placing whilst the rest were for Hong Kong public offer. Assuming the over-allotment option was not exercised, and the offer price is HK$16.80, the net proceeds from the offering would have been approximately HK$9.12b. “The uncertainty of the trade row between US and China, and its impact on economic growth, and the uncertainty surrounding Brexit may drive the IPO market into a cautionary stance. This means investors will still remain more selective,” Tham noted. It is for these reasons, according to Tay, which may have led to Eagle Hospitality REIT’s IPO falling flat despite being the largest Singapore float to date. The firm saw less than half of its 580.56 million stapled securities, offered at US$0.78 apiece, subscribed under the public offer, prompting joint bookrunners and underwriters to pick up the slack and take up the bulk of the undersubscribed securities. This dismal performance, however, did not spook a third US REIT from listing. In late June, KBS Realty Advisors priced the IPO of Prime US REIT at US$0.88 apiece to deliver a forecasted dividend yield of 7.4% in 2019. Prime US REIT will have an investment strategy of principally investing, directly or indirectly, in stabilised income-producing office assets and real estate-related assets in the US. The IPO portfolio will consist of 11 office assets which will be injected into Prime US REIT by KBS Real Estate Investment Trust III, Inc. The total offering was lowered to $828.74m (US$612m) from $828.74m (US$705m) previously. The offering comprises 360 million cornerstone units and 335 million units for public allocation and placement. KBS Realty Advisors had been mulling a second REIT listing in Singapore since 2018. In 2017, the Keppel-KBS

Tay Hwee Ling

Tham Tuck Seng

Oriano Lizza

Are REITs enough? According to Tham, REITs and BTs are likely to continue to be the stars of the local bourse. Data from Dealogic noted that REIT IPOs made up 42 out of the overall 230 Singapore-listed offerings over the last 10 years. They also accounted for almost half or US$17.63b of the US$36.16b clinched since 2009. The REIT sector was followed by the construction and building industry which saw 33 IPOs and the professional services segment with 18 offerings. Singapore’s REIT market ranks as the sixth largest in the world and third in Asia with a market cap of US$53b as of February 2018, according to boutique real estate fund manager Q Investment Partners. Meanwhile, the market value of the S-REIT sector has expanded by more than 200% over the past 10 years, data from SGX Research show. Although S-REITs have trailed behind the benchmark Straits Times Index at the start of 2018, the sector rallied and caught up in Q4 2018 as the Fed assumed a more dovish stance. In November and December 2018, S-REITs were amongst the best-performing sectors in SGX registering total returns of 2.3% and 0.3%, respectively, data from SGX show, with most of those gains extending into 2019. All of the $422m injected into the REITs and BTs sector in 2018 was reportedly raised by Sasseur REIT, which offers investors exposure to the Chinese retail outlet mall sector through its portfolio of four malls in China. The firm then revealed the completion of its first acquisition since its March 2018 IPO, buying additional shop units with existing tenancies at the annex block of Sasseur Hefei Outlets from third-party vendors for a purchase consideration of $19.62m. A report from the local bourse also noted that in 2019 YTD, 34 REITs and five stapled trusts hit average total returns of 13.6% and dividend yields of 6.5%, SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

FINANCIAL INSIGHT: IPO underpinned by a number of strategic acquisitions. In May, five REITS either announced or completed property acquisitions for their portfolios that are all yield accretive in nature or will, boosting the overall distribution yield of their respective portfolios. “REIT popularity in Singapore is exemplified in multiple ways - they make up one-tenth of the STI stocks, all of the STI Reserve List stocks, approximately one-tenth of the total market capitalisation of stocks listed on SGX, and a quarter of the top 20 stocks by turnover on a day-to-day basis,” the bourse highlighted. Meanwhile, Maybank Kim Eng (Maybank KE) analysts Chua Hak Bin and Lee Ju Ye noted in a report that an airport REIT secured on the rental income of the first three Changi terminals could also help revive what had been a moribund period for the SGX. “An airport REIT will help broaden and complement the current diversity of REIT and business trusts offered on the Singapore exchange. This could help catalyse Singapore’s efforts to be an infrastructure financing hub,” Chua and Lee noted, adding that such a REIT may help satisfy yield-hungry institutional and retail investors. According to Maybank KE REIT analyst Chua Su Tye, the retail portion could support conservatively a capital value of $4,500 psf, implying a valuation of $4.4b. This compares against other large destination malls such as Causeway Point (416,000 sqft at $2,930 psf), VivoCity (1,080,000 sqft at $2,810 psf) and Northpoint City North Wing (230,000 sqft at $3,520 psf). “There could also be profit-sharing element in the rental contracts. Airport stocks moreover command a high priceearnings multiple, including those in Thailand and Malaysia,

REIT popularity in Singapore is exemplified in multiple ways - they make up one-tenth of the STI stocks, all of the STI Reserve List stocks, approximately one-tenth of the total market capitalisation of stocks listed on SGX.

because of their monopoly position,” the analysts highlighted. Looking beyond REITs Tham added that the city could also bank on more healthcare and tech listings over the following months. In 2018, the Singapore bourse recorded 11 healthcare companies’ IPOs performing at an average 17% share price in the past five years. Tay also observed a variety of interesting sector listings on the SGX, including mining, industrial products and a theme park developer. A report from PwC expects SGX to outpace the Johannesburg and Deutsche bourse to rank as the ninth most preferred listing destination by 2030, with 15% of issuers considering the possibility of a Singapore listing eleven years from now, up from the current 11%. “SGX is a market leader and can be the gateway for issuers to tap on multiple markets outside of the region. For instance, they now have partnerships with NASDAQ and Tel-Aviv Stock Exchange, which paves the way for more technology and healthcare companies to dual-list,” Tay said. A separate report from EY covering Q1 2019 considered Singapore as the leading cross-border country with four IPOs amidst a backdrop of volatile global trade tensions thanks to its relationships with NASDAQ ad Tel Aviv stock exchanges. “This is in line with the wider Asia Pacific region, which registered itself as the most active region with eight out of the top 10 exchanges in deal numbers, and should continue into Q2,” CMC Markets sales trader, Oriano Lizza, noted. By Arianna Danganan

HONG KONG VIEW

Can Hong Kong retain the global IPO crown as US rivals step up game?

n 2018, the Hong Kong stock exchange reclaimed its spot as the top IPO market globally, edging out rival New York, although momentum seems to be dissipating as listing activity has slowed save for a few bright spots in sectors such as biotechnology. A slow trickle of deals so far in 2019 could herald bad news for Hong Kong if it slides down a couple of notches in the global IPO leaderboard by end-2019 as traditional rivals and emerging ones such as Shanghai gather strength. In 2018, total deal value of IPOs in the Hong Kong stock exchange jumped to US$33.42b across 196 deals, from US$14.29b across 156 deals in 2017, Dealogic data showed. However, as of May 28, total deal value of IPOs in the Hong Kong exchange has only reached about 14% of the full-year 2018 total or US$4.63b across 52 deals. Whilst the number of listings in Q1 2019 was dismal compared to the previous year, Hong Kong’s weaker performance was not an isolated case as other bourses also saw slowdowns, according to Edward Au, partner – audit, national public offering group at Deloitte. In particular, large deals were scant in the first quarter of 2019 as companies chose to sit in the sidelines and hoped for the US-China negotiations to pick up in the

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

latter half of 2019. The strong flow of biotech deals seen in 2018 and early 2019 following the relaxation of rules should continue in the coming months, according to Au. Since the introduction of the new listing regime, there were 9 biotech listings on the HKEX Main Board raising a combined US$4.1b, according to the HKEX’s first biotech newsletter published in May. Top IPO destinations as of May 2019

Source: Dealogic

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NUMBERS M&A TRENDS IN SINGAPORE

INVESTMENT BANKING VOLUMES DIPPED IN H1 INVESTMENT BANKING FEES BY ASSET CLASS

INVESTMENT BANKING FEES VOLUMES YTD Fees

BONDS

Rest of Year Fees

900 800 600

US$ Million

700

500 400 300 200

100 0

500 450 400 350 300 250 200 150 100 50 0

EQUITY

LOANS

M&A ACTIVITY UP IN H1 ANY INVOLVEMENT M&A VOLUMES & NUMBER OF DEALS 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0

Rest of Year Volumes

TARGET M&A VOLUMES & NUMBER OF DEALS

#Deals

YTD Volumes

300

500

50,000

250

400

40,000

200

200 100 10

#Deals

60,000

300

Rest of Year Volumes

600

US$ Million

YTD Volumes

30,000

150

20,000

100

10,000

EQUITY CAPITAL MARKET PROCEEDS REMAINED FLAT PROCEEDS

ECM PROCEEDS BY ISSUE TYPE Rest of Year Proceed s

IPO

18,000

10,000

16,000

9,000

14,000

8,000

10,000 8,000

6,000 4,000

Convertible

6,000 5,000

4,000 3,000 2,000

2,000

Follow-On

7,000

12,000

US$ Million

YTD Proceeds

1,000 09

DEBT CAPITAL MARKET PROCEEDS SLUMPED DCM PROCEEDS BY ISSUE TYPE

DCM PROCEEDS

Agency, Supranational, Sovereign

Investment Grade Corporate

MBS

ABS

Federal Credit Agency

High Yield Corporate

YTD Proceed s 35,000

30,000 US$ Million

US$ Million

20,000 15,000 10,000

20,000 15,000

5,000

Source: Singapore Investment Banking Review First Half 2019, Refinitiv Deals Intelligence

25,000

10,000

5,000 0

Rest of Year Proceed s

40,000

25,000

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

INDUSTRY INSIGHT: AUCTION LISTINGS

Auctions fail to take off despite rise in property-crazed homeowners’ listings Auctions reflected a success rate of 1.35% in Q1, representing a drop of 45.4% in just a year.

omeowners sick of waiting for their dwellings to sell via an agent have resorted to putting them up for auction, in the hopes that an actual sale date will get them a deal that has eluded them through conventional listings. Unfortunately, the evidence is now in, and despite a record number of property auctions in Singapore, the total value of properties selling this way is actually falling and was down 26.1% over Q1 to just $11.57m. Buyers pinning their hopes on the auction market to dispose of their properties against the weakening sentiment saw record auction listings; however, this failed to translate into sales. In Q1 2019, the number of auction listings more than doubled to 362 compared to Q1 2018, data from Knight Frank show. A separate report from Colliers put the number of auction listings at 370, up 98.9% YoY from 186 listings in 2018.

Unfortunately for the auctioneers, almost 99 in 100 auctions failed to achieve a sale. According to Colliers International’s head of research for Singapore, Tricia Song, these auctions only reflected a success rate of 1.35% in Q1, which represents a year-on-year drop of 45.4%. Hector Tan, head of marketing & communications at Huttons, suggested that the low take-up rate is connected to how property-obsessed Singaporeans have become more particular about the properties in their portfolio. “Buyers are becoming increasingly selective and savvy in the type of property they want to own,” he told Singapore Business Review. “The demand for choice, niche properties that offer a mix of lifestyle luxury and unique identity, will remain strong in the auction market”. Auctions are currently seen as a popular method to market properties as resale market owners face stiff

Homeowners see auctions as a popular method to market their property resales.

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

The low take-up rate is connected to how propertyobsessed Singaporeans have become more particular about the properties in their portfolio.

competition from the supply of new launches, according to Huttons’ Tan. “Given this situation, auctions are a great way for owners from the resale segment to get exposure for their listings,” he said. Steven Tan, director for capital markets & investment services at Colliers International, added that sellers think of auctions as the most transparent mode of sale, believing that prospects will be competitive with buyers calling for the highest bid. Furthermore, Savills’ executive director for research & consultancy, Alan Cheong, mentioned that there were also cases where sellers are putting out their properties via auctions to test the waters. Cheong said, “Although properties sold at auctions are few and far in between, the exposure may lead to private negotiated settlement behind the scenes, i.e., after the auction.” However, buyers also tend to

INDUSTRY INSIGHT: AUCTION LISTINGS possess the wrong perception about auction dynamics, believing that these properties can still be sold at a discount or still be negotiated to obtain a better deal. “That is not necessarily true. In fact, there were times whereby the properties were sold at higher price during private treaty as more parties came forward and offered higher price after the auction,” said Colliers’ Tan. He added another reason why properties under auction sales may not be seen as an attractive buy. “We do not see a recovery in the success rate over the coming months, because the residential market will continue to stay flat or dip further.” According to Song, they have only seen a few big-ticket listings so far in 2019. “One penthouse condominium unit in District 9 had an opening price of $20m whilst one mixed-use property in District 10 and one landed industrial property in Woodlands had their price tags at $30m,” she said. Mortgagee listings rise Data from Knight Frank show that most auction listings fall under mortgagee sales which surged 112% YoY to 159 listings in Q1. The increase of such sales, Colliers’ Tan explained, is also expected to rise due to pressures from cooling measures and taxes. Investors would also not be able to service the mortgage, especially if the unit is either left vacant for a long period or rent is too low to service the loan. “We expect the rise in mortgagee sales will likely continue in the coming months. There are many new development units in the market that remained unsold, and should prices continue to fall, it could depress the residential market further,” he noted. Edmund Tie & Company’s head of auction and sales, Joy Tan, said that younger buyers or investors looking at second properties may be inclined to explore mortgagee sale units since they are more price sensitive. However, Cheong noted that this does not automatically mean that most properties that go on auction are sold at forced sales values. “Those who list at auction

Non-landed residential listings under mortgagee sale and 3M SIBOR

Tricia Song

Source: Knight Frank

Hector Tan

Steven Tan

Alan Cheong

Joy Tan

can be mortgagees, but that does not imply that they have to sell at all costs because it may open up the possibility of future lawsuits if the property is sold at ridiculously low prices,” Cheong explained. The rise of listings will not easily translate into sales for hopeful sellers, if the previous months are any indication, according to Tan of Colliers. “We expect auction listings to continue to increase especially mortgagees’ sale. However, the success rate will likely remain low as buyers will be selective and continue to shop for good buy. It’s a buyers market now.” Edmund Tie & Company’s Tan also commented that the buyers’ and sellers’ expectations clearly have a gap. “Buyers are now overwhelmed with choices in both the primary & secondary markets. Buyers now have a wait-and-see attitude and hoping the price will be corrected by 2nd half of this year 2019 or 1st half of next year 2020,” Edmund Tie & Company’s Tan added. “Unless mortgagee listing has an attractive price tag to ‘make up’ for ABSD, etc.” Commercial property auction Unlike the residential market, the commercial property segment is likely to be luckier with auctions. Song stated that 25.8% of mortgagee listings involve industrial properties, 18.5% are retail listings, whilst office listings accounted for 2.3%. “The commercial property segment may be more promising because it is not affected by the cooling measures. However,

purchasers are selective in acquiring commercial properties. Generally, they will consider the location, rental return and perhaps any en bloc potential,” Colliers’ Tan said. However, retail properties, in particular, are facing difficulties in finding tenants as businesses continue to adapt their business models online, brought on by e-commerce and digital disruption. “The sizable number of industrial listings located in the Jurong district that were put up for auction could have been triggered by the geopolitical complexities of the western region over the past year,” Hutton’s Tan added. Luxury segment Auctioning is also seeing positive momentum in the luxury segment. JLL revealed that one in four properties for auction during the first ten months of 2018 is a posh asset, being valued at $5m and above. Good class bungalows (GCBs) at Chestnut Drive went under the hammer for $11.4m in 2017, marking one of the priciest auctions in recent years. According to JLL Singapore, properties were sealed at 13-26% above their respective opening bids. The firm said, “As seen in Singapore, there is a growing trend of owners of high-end properties turning towards auction as a form of sale. It is hoped that as the negative light of auction properties begin to dim, more buyers will turn to it as a possible means of acquiring assets in Singapore.” By Nathanielle Punay SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

HOTTEST STARTUPS 2019

Deeptech dominates startup landscape

Venture capitalists are looking to inject more funding into deeptech as the government strengthens its support system amidst a global tech shift, but fintech startups and their growing markets are still in focus.

Saleswhale

n the eighth edition of Singapore Business Review’s Hottest Startups list, automotive marketplace Carro made it to the top after completing its $81.3m (US$60m) series B round in May 2018. This is followed by biotech startup RWDC, which raised $17.6m (US$13m) and $29.8m (US$22m) last October 2018 and April 2019, respectively, as well as artificial intelligence (AI) solutions provider AnyMind, which bagged $21.4m in March. Deeptech startups covering AI, biotech, healthtech, and Internet of Things (IoT) also dominated the list. Other startups that joined the ranks are RedDoorz ($14.9m or US$11m), Holmusk ($13.2m or US$9.75m), umitron ($11.1m or US$8.2m and $2.7m or US$2m), Oxfordcaps ($10.8m or US$8m), Silot ($10.8m or US$8m), Beam ($8.7m or US$6.4m), and KaHa ($8.4m or US$6.2m). Overall, the 20 hottest startups collected an average of about $14.9m (US$11m) in funding, which skyrocketed by 184.9% from the average funding last year at $5.23m. According to e27’s Southeast Asia Startup Ecosystem report, startups in Singapore hauled US$7.5b via funding in 2018 after seeing 189 deals. Companies were included on the list based on funding size followed by channel checks with leading venture capital firms to ensure they were indeed hot enough. Whilst not an exhaustive compendium, the list does provide a good flavour of the types of firms being funded in Singapore. “Other notable startups that people are talking about include the fintechs Rate, SpherePay, Finaxar, Xen.net and Vouch Insurtech, as well as card payments platform CardUp, influencer marketing platform Affable, machine learning engine Anapi, HRtech firm Snaphunt, software firm Horangi, healthtech startup botMD, and business travel platform TravelStop.” Ramesh Raghavan, vice chairman of Business Angel Network of Southeast Asia (BANSEA), concurred and

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

Deeptech startups covering AI, biotech, healthtech, and Internet of Things (IoT) also dominated the list.

said that healthcare startups show a huge opportunity. Aside from these verticals, there are other sectors which VCs think are underserved. Soh said that there is an upcoming focus in the insurtech area, which is usually classified together with fintech. “I would like to see more funding go to startups centred on healthtech, food, agritech, and hardware,” he said. Golden Gate Ventures principal Justin Hall cited that the logistics vertical also has “enormous potential,” due to the confluence of increasing commercial activity across the region, amount of investment required to improve and digitise existing logistics solutions, as well as the amount of institutional capital still pouring into the Southeast Asian ecosystem. Russ Neu, venture partner at Impact Quest Ventures, said that their firm has been tracking and investing in childtech startups, even when the vertical is below the radar of investors. However, Raghavan noted that fintech still remains a huge focus for Singaporean investors, as expected from a financial hub. e27’s report revealed that of the 189 funding rounds conducted in 2018, fintech accounted for 62 of it, or 32.8%, making it the core driver in Singapore. Fintech still in focus “I don’t think VCs are biased to fintechs. It’s just that financial inclusion is one of the biggest opportunities in Asia and a massive addressable market and anything that solves friction in this space is an exit opportunity in the long term,” Raghavan commented. Neu also said that VCs are not always keen to tap into this sector. “Different VCs have different mandates so whilst there are VCs that specialise in fintech, there are certainly VCs who avoid this sector,” Neu said. Furthermore, the continued focus on fintech firms is being driven by government support. In particular, SGInnovate launched a financing scheme that will invest up to $80m over four years into tech-related verticals, in partnership with co-investment partners such as Golden Gate Ventures, Monk’s Hill Ventures, and Wavemaker Partners. The Monetary Authority of Singapore (MAS) also granted five virtual bank licenses to non-banks. Growing funding gap Despite the rising numbers of startups and sizes of their financing rounds, Neu stated that Singapore has a funding gap beyond series B rounds. “In 2018, there were people complaining about a seed funding gap as most of the seed investors have moved a stage later to look at Series A and B investments, but now there are new funds coming into the seed stage space such as Sequoia, which is investing in many seed stage companies at one go,” said Wayne Soh, investment director for Singapore/APAC at Plug and Play Tech Center.

HOTTEST STARTUPS 2019 1.Carro

2. RWDC

Founder(s): Aaron Tan Funding: Carro bagged $81.3m through a series A funding round last June 2018. It was led by SoftBank Ventures, Insignia Ventures Partners and B Capital Group. Start of operations: 2015

Founder(s): Roland Wee and Daniel Carraway Funding: RWDC secured $29.8m in October 2018 and $17.6m in a financing round dated April 2019 and was led by Vickers Venture Partners and US-based Eversource Retirement Plan Master Trust. Start of operations: 2015

Carro is an online platform for buying and selling cars. It uses a proprietary pricing algorithm to determine prices. Apart from being an automotive marketplace, it also offers in-house repairs and maintenance, roadside assistance services, as well as after-sales services such as a warranty that covers direct owner purchases. Another service they introduced is dubbed as “Carro Express,” which allows deals to be completed within an hour. Carro’s sister company, Genie Financial, provides in-house financing solutions and is said to have over US$135.6m worth of loan transactions in 2017.

3. AnyMind Group

Founder(s): Kosuke Sogo and Otohiko Kozutsumi Funding: AnyMind Group raised $29m in a series B funding last March, led by Thai offline-to-online solutions provider VGI Global Media Plc (VGI) and Japanese financial services company Tokyo Century Corporation. Start of operations: 2016 AI-powered adtech firm AnyMind Group owns AdAsia, CastingAsia and TalentMind. AdAsia is a one-stop platform for digital advertising across video, native and display means, including strategy consultation, implementation and execution of online advertising activities. CastingAsia handles influencer marketing. It’s a platform that is said to have access to over 35,000 influencers in Asia, allowing clients to compare, analyse and discover influencers across Facebook, Instagram, YouTube and Twitter. Lastly, TalentMind is a an AI-driven recruiting software platform that helps employers in screening, analysing and matching prospects to their businesses.

Biotech firm RWDC manufactures biodegradable bioplastic to make straws, cup lids, cutlery, food and beverage packaging. It features the use of medium-chain-length polyhydroxyalkanoate (mcl-PHA) biopolymers harvested from the outputs of microbial fermentation using plantbased oils and claimed to be fully biodegradable in soil, water and marine conditions. These can fully dissolve within a few weeks, leaving no toxic residue. RWDC is based in both Singapore and the United States.

4. RedDoorz Founder(s): Amit Saberwal and Kunwar Asheesh Saxena Funding: RedDoorz snagged $14.9m in its series B funding round from Asia Investment Fund, International Finance Corporation, Temasek Holdingsbacked InnoVen Capital and Jungle Ventures. Start of operations: 2015 RedDoorz is a budgethotel business with over 1,000 properties across 50 cities in Singapore, Indonesia, and the Philippines. It has an online platform that allows access to hotel management services where hotel owners can streamline their business. It has an AI-based engine for predicting demand in a particular area and will add more RedDoorz properties in this area until the demand is saturated. Moreover, it brands its deliverables, such as signage, branding, toiletries, and WiFi hotspots, as RedDoorz. The company is also working on the integration of other services into their rooms such as movie streaming, self-check-in doors, and vending machines. It has now over 200 employees across five countries. SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

HOTTEST STARTUPS 2019 5. Holmusk

6. Umitron

Founder(s): Nawal Roy Funding: Holmusk secured $13.2m during a pre-series A funding from Heritas Venture Fund, along with undisclosed new and existing investors last September 2018. Start of operations: 2015

Founder(s): Ken Fujiwara, Masahiko Yamada, and Takuma Okamoto Funding: Umitron bagged $11.1m in June 2018 in an equity financing round from Innovation Network Corporation of Japan, as well as $2.7m funding from the Inter-American Development Bank Group (IDB) in December 2018. Start of operations: 2016

Healthtech startup Holmusk offers a Real-World Evidence (RWE) platform. RWE uses real-world data, which is derived from the different outcomes of patients. It uses in-house analytical tools to recognise disease progression and articulate personalised intervention strategies; a Speciality Electronic Health Record (EHR) system and database for neuroscience disorders to aid in decision making in mental health practices; and AI-powered digital intervention tools that promote behaviour change.

Singapore- and Japan-based aquatech startup Umitron builds data platforms for aquaculture by using IoT, satellite remote sensing, and AI. This is said to helps farmers improve farm efficiency, manage environmental risks, and increase business revenues. Its first product UmiGarden is a remote feeding management system that offers fish feeding and monitoring services by utilising IoT technology .

7. Oxfordcaps

8. Silot

Founder(s): Annu Talreja and Priyanka Gera Funding: Oxfordcaps received over $10.8m in funding led by India-based Times Internet, as well as from its returning investors Kalaari Capital and 500 Startups. Start of operations: 2017

Founder(s): Andy Li Funding: Silot raised $10.8m in series A funding led by SBI Investment. Start of operations: 2017

Student housing platform Oxfordcaps manages 500 beds for students in universities, including National University of Singapore, INSEAD Business School and Singapore Management University. Upon launching in India, it offered 200 beds across 3 locations and has now grown by 50 times to about 10,000 beds with a goal of providing over 200,000 beds in the next three years. The company said their student housing features services for full-service residences like exclusive laundry services and professional housekeeping. 30

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

Fintech firm Silot provides an intelligent banking engine that uses AI and knowledge graphs to streamline banking operations and enhance decision-making processes. It targets primary bottlenecks, such as poor connectivity as well as siloed data and systems, allowing banking systems to formulate AI-assisted decisions. Its Silot Intelligent Platform helps to connect the processes of payments, marketing, loan underwriting, Know Your Customer (KYC), and compliance, turning data into knowledge which can then be derived into intelligent decisions using AI.

HOTTEST STARTUPS 2019 9. Beam

10. KaHaÂ

Founder(s): Deb Gangopadhyay and Alan Jiang Funding: Beam secured $8.7m in a seed funding round led by Sequoia India, Founders Fund, ZhenFund and Class 5 Global in October 2018. Start of operations: 2018

Founder(s): Pawan Gandhi Funding: KaHa snagged $8.4m in a series B funding led by ICT Fund last May 2019. Start of operations: 2015

Beam is an online scooter rental platform where customers can locate and unlock a scooter through its mobile app for an initial rate of $1 and an additional $0.15 a minute. The e-scooters were made by Segway Ninebot and supported by smartphone maker Xiaomi Corp. It is also the first in the micromobility sharing services sector to offer personal accident insurance coverage in Singapore, Australia, New Zealand and Malaysia, subject to local regulations and jurisdiction. It plans to expand its insurance services to South Korea and Taiwan as well.

Smart wearables startup KaHa spans across high-end luxury, financial services, digital payment, smart automotive, jewelleries and accessories, health and wellness, OEM and smart apparel. Its registered brand COVE is a patented end-to-end IoT SMART wearables platform and a one-stop solution for brands to bring smart wearables to their customers, whose verticals include Safety, Sports & Fitness, and Health & Wellness. The platform includes electronics design, printed circuit board assembly, application framework for iOS and Android, cloud services, data analytics and smart after-sales service tools.

11. UCARE.AI

12. BasisAI

Founder(s): Christina Teo and Neal Liu Funding: UCARE.AI secured $8.02m (US$6m) worth of Series A funding in 2018, thanks to investors such as VC firm Walden International, Great Eastern, Singaporean investor Peter Lim, and WPGrowth Ventures, a startup initiative by law firm WongPartnership. Start of operations: 2016

Founder(s): Linus Lee, Liu Feng-Yuan, and Silvanus Lee Funding: In January, BasisAI secured $8.2m (US$6m) in seed funding from Temasek and Sequoia India. The deal is reportedly notable as Temasek usually invests in later-stage companies and not on startups that are just freshly coming up. Start of operations: 2018

Armed with a suite of proprietary deep learning and neural network algorithms built on existing healthcare data, UCARE.AI utilises a predictive engine to help prioritise healthcare resources and reduce preventable hospitalisation. It also boasts of a highly accurate predictive capability by correctly identifying the risk of rehospitalisation for Singaporeans.

BasisAI is funded by topnotch data scientists who have worked for Twitter, Uber, and Dropbox, and Government Digital Services. The platform enables organisations, specifically fintechs and internet firms, to deploy models seamlessly and securely, to track the history of data and its origin, to monitor algorithmic integrity and ensure AI explainability in the hopes of helping companies to lure customers, boost user experience and mitigate fraud. SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

HOTTEST STARTUPS 2019 13. Saleswhale

Founder(s): Gabriel Lim, Le Duc Toan Ethan, and Venus Wong Funding: Saleswhale raised $7.2m (US$5.3m) of series A funding in April backed by SEA-focused Monk’s Hill Ventures and with participation from existing backers GREE Ventures, Wavemaker Partners and Y Combinator. Start of operations: 2016 Saleswhale is a conversational email marketing platform which utilises AI-powered bots to handle email, making it easier to arrange meetings and coordination and even take part in the more proactive side of engaging existing leads. Its target customers include startups, mid-market and enterprise firms and the company has already secured over a hundred customers.

Zeemart’s platform allows buyers, which include food suppliers, restaurants and catering services to check out supplier catalogues and place their order online. Suppliers can then manage their orders and deliveries through the app. Apart from this, services also include procurement financing.

15. Nutrition Innovation

16. Shiok Meats

Founder(s): David Kannar Funding: Nutrition Innovation clinched $6.78m (US$5m) series A funding led by food tech-related VC VisVires New Protein (VVNP). The funding round was also joined by commodity trading firm Enerfo and an undisclosed UK-based family office. Start of operations: 2017

Founder(s): Sandhya Sriram and Ka Yi Ling Funding: Shiok Meats raised $6.24m (US$4.6m) worth of seed funding in April 2019 led by CEO Henry Soesanto of Philippine-based food company Monde Nissin together with other investors, such as Y Combinator, AiiM Partners, Big Idea Ventures, Aera VC, Beyond Impact Advisors, Boom Capital and Entrepreneur First, amongst others. Start of operations: 2018

Nutrition Innovation is focused on sugar reduction, replacement, and innovation. The startup is working to find the alternative sweetener for food and drink that is cost-effective and not a highly refined sugar or alternative sweetener. It is also working to push global sugar companies to produce Nucane, a range of healthier, naturally low glycemic sugars designed for both sugar replacement and sugar reduction by up to 70%. These technologies can be licensed to the industry to be rapidly and efficiently produced at industrial scale for all major food and beverage brands around the world. 32

14. Zeemart Founder(s): Keith Tan and Neeraj Sundarajoo Funding: Zeemart raised $7m (US$5.2m) in a March 2019 funding round led by Indonesian investment firm Kresna Graha Investama. Also participating in the round is Prem Pillay, who is an angel investor interested in healthcare startups and joint investments with Jungle Ventures. Start of operations: 2017

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

Started by two stem cell scientists who ditched their government posts to build their own company, Shiok Meats is focused on creating cell-based crustacean seafood, including shrimp, crab, and lobster, marking a fresh move made by meat replacement firms focused on red meat. The founders are eyeing to make their products within the reach of the APAC market in the next three to five years, starting from Singapore.

HOTTEST STARTUPS 2019 17. igloohome Founder(s): Anthony Chow Funding: In 2018, igloohome clinched a $5.42m (US$4m) series A funding led by Insignia Ventures Partners. Prior investor Wavemaker Partners also joined the funding, as well as Phillip Private Equity, X Capital Ventures, Kuok Meng Xiong of K3 Ventures and angel investor Koh Boon Hwee. Start of operations: 2015 igloohome utilises IoT technology to offer smart locks and lockboxes for homes, which are integrated with a mobile app. Its products are used in over 80 countries and are available through 30 distributors globally, with a focus across Asia and the Americas. The startup has inked a partnership with Airbnb, allowing it to integrate the generation of PIN codes with an Airbnb host’s calendar. The startup’s products can be used without Internet connection and involves synchronisation and encryption, similar to that in the internet banking token.

18. ZUZU Hospitality

Founder(s): Dan Lynn and Vikram Malhi Funding: ZUZU Hospitality raised $5.01m (US$3.7m) in a series A funding led by Wavemaker Partners, which the startup eyes to use for its expansion plans to Thailand, Malaysia, and Australia. Start of Operations: 2015 ZUZU Hospitality Solutions caters to independent hotels by providing an outsourced yield management. It couples a proprietary hotel operating system with a system model delivered by specialist revenue managers to deliver an average uplift of 30% in online revenue. The startup is eyeing independent hoteliers as its market, of which more than 90% do not possess any revenue management software to support their business.

19. ObvioHealth

20. SESTO Robotics

Founder(s): Bryan Silverman Funding: ObvioHealth secured a $4.07m (US$3m) series A funding in 2018 led by TKS I, a healthcare-focused venture fund founded by Tikehau Investment Management and SPRIM’s venture capital (VC) arm SPRIM Ventures. Start of operations: 2015

Founders: Jeff Tang, Peter Ho, Michael Leong, and NgKiangLoong Funding: In 2018, SESTO Robotics secured $4m worth of series A funding, thanks to Singtel Innov8 and Temasek-owned investment firm Heliconia Capital Management. SESTO will utilise to develop new robots and expand beyond Singapore and China. Start of Operations: 2017

With operations in 19 countries and over 500 professionals, ObvioHealth is a global leader for health-centric innovation. Based in Singapore and Orlando, ObvioHealth is a full-service contract research organisation (CRO) that looks to develop clinical trials through digitisation, making them faster and more effective. Meanwhile, its proprietary software ClaimIt supports observational and interventional studies and also allows integration with smartphones, connected devices, and real-time interactions with subjects.

SESTO Robotics completed its spinoff from parent firm HOPE Technik. As a Singapore homegrown firm, it is developing Autonomous Mobile Robot (AMR) technology and Automated Guided Vehicles (AGVs) to automate traditionally labour-intensive material handling processes in factories, including transporting work-in-progress materials between workstations to movement of bulk materials in warehouses. SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

EXCLUSIVE: SPACE WATCH

The office has 4,400 sqft of space.

Meeting rooms feature designs with kinetic lines.

Rooms are fitted with motion sensor lighting.

The office hosts ISG’s 60 employees.

Meeting rooms can be converted into a town hall space.

Air conditioning is switched off at 6 p.m.

Check out ISG’s new Haw Par Centre space

ffice fit out firm ISG’s new 4,400-sqft office on the first floor of Haw Par Centre hosts its 60 employees and includes two six-person meeting rooms which can be converted into a town hall space. Apart from the walls of its meeting rooms, ISG decided to tear down a majority of its walls to provide an agile, open-plan environment for their employees to choose where and how they work. This was also part of its initiative to break free from its previously disconnected and traditional workplace.

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

Emblazoned across the glass partitions of each meeting room are kinetic lines which are said to reflect the dynamic nature of ISG’s business.

Emblazoned across the glass partitions of each meeting room are kinetic lines which are said to reflect the dynamic nature of ISG’s business, said Steve Ramsden, ISG’s managing director for Southeast Asia and Middle East. Furnishings are coloured with earthy tones and designed with plants and natural elements, presenting a stark contrast to the industrial palette of black and grey. The walls across the office are also filled with large lines of inspirational text. According to Ramsden, the office’s focal point may well be the three

wall-mounted panels exhibiting imagery of its construction projects in its reception area. Adjacent to this is a vibrant, attention-grabbing orange wall inscribed with ISG’s vision. “It provides an instant insight to the nature of our business,” Ramsden explained. The office has its design fitted its meeting rooms with motion-sensor lighting, and recycling bins stationed at its utilities area. “Air conditioning is automatically switched off at 6 p.m., which also encourages staff to leave work on time for their wellbeing,” Ramsden added.

SALARY SURVEY 2019

Firms lose out to tech companies despite the extra 5-10% pay they are willing to offer.

Flextime, unlimited vacation days on the cards amidst sluggish salary growth

Technology firms are scrambling to upgrade their perks programmes to include parental leaves, free meals, and hiring package upgrades, consequently becoming companies of choice for half of candidates.

rom unlimited off days to flexible working hours, free meals and increased parental leave, employees can have their pick of perks as companies scramble to create the most attractive hiring packages. “Non-financial benefits have become increasingly important for Singaporean professionals. The most popular perks revolve around work-life balance with flexible working hours and the option to work from home gaining in popularity. Besides flexible working arrangements, professional development opportunities, parental leave, and social activities have become increasingly popular with Singapore employees,” said Matthieu Imbert-Bouchard, managing director of Robert Half Singapore. A good example is Netflix, which started offering unlimited off days since it launched its local office in 2015. Other companies, such as homegrown e-commerce platform Carousell, also offer catered lunches and free coffee. Other cool perks include free massage treatments offered by shopping platform Shopee. “There are companies which offer free meals and transport for their staff, whilst some provide their staff with unlimited annual leave, such as Netflix,” explained Linda Teo, country manager, ManpowerGroup Singapore. “Some companies are also introducing family-friendly

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

Besides flexible working arrangements, professional development opportunities, parental leave, and social activities have become increasingly popular with Singapore employees.

policies, such as providing parental leave that is higher than the government-stipulated entitlement to support employees’ demand for work-life balance. Diageo and Spotify are some companies that have generous parental leave policies.” Data from Robert Walters showed that on average, candidates can expect increments of 7-15% when moving jobs. However, not all employees can expect such generous non-monetary perks. Large pay hikes are generally reserved for highly sought-after IT professionals, whilst workers in traditional industries such as manufacturing and supply chain and procurement may face redundancies and layoffs. “Technology companies are the trendsetters here and are naturally becoming employers of choice. 50% of the candidates who are not currently associated with the sector have expressed desire to move over to such firms, leaving comfortable roles even in top FMCG brands. In most cases, companies with competing offers against such companies lose out despite the extra 5-10% pay they might be willing to offer,” noted Anurag Garg, associate director, Michael Page Singapore. He added that when switching jobs of similar industries, employees in digital, financial services, legal, customer success and IT can expect the largest salary

SALARY SURVEY 2019 Proportion of employees expecting salary changes in 2019

Source: Hays Salary Guide

increases. “Finance and accounting, healthcare and life sciences, procurement and supply chain also will see market average increases though there has been a marked increase in redundancies in these functions across traditional industries such as manufacturing. Candidates from industries such as consumer electronics should expect near-flat salary increases due to an imbalance in demand & supply of such talent,” he noted. Niche skills, premium pay Data scientists, cybersecurity specialists, and user experience (UX) designers are highly in demand by employers across various industries. A survey by Robert Half showed that a staggering 87% of chief information officers are finding it more challenging to source qualified IT professionals compared to five years ago, reflecting the increased demand for tech talent. “Tech professionals with skill sets and experience related to analytics, applications, data science, the Internet of Things (IoT), private cloud and UI/UX design will be in high demand. Cyber security professionals are also in demand, as companies look to strengthen their security after a recent chain of high-profile cyber attacks within the country,” noted Rob Bryson, managing director, Robert Walters Singapore. Imbert-Bouchard added that the increased demand for cyber-security and technology risk management professionals, leaves candidates in a good position to negotiate an above-average salary. “There is a growing trend towards enhancing ‘cyber-hygiene’ within Singapore’s financial services institutions. This has resulted in greater demand in the fields of cyber-security, technology risk and RegTech (Regulatory Technology) to comply with regulations,” he noted. On average, a data scientist can expect an annual salary of at least $120,000, whilst a network engineer can expect annual pay of at least $90,000. Meanwhile, a chief information officer (CIO) can command an average annual salary of $300,000, whilst an IT Director can expect at least $205,000 a year. A cybersecurity specialist can expect an annual salary ranging from $78,000 to $150,000 per annum, whilst an IT Risk Manager can expect yearly pay ranging from $120,000 to $180,000. Roles in emerging technologies such as machine learning can expect annual pay ranging from $120,000 to $250,000, an increase from $100,000 to

Matthieu ImbertBouchard

Linda Teo

$220,000 last year. Tech professionals can command higher salaries not only in IT-related fields but also in other sectors such as financial services and the legal sector. “In the finance industry, professionals with technology-based skillsets are expected to be rewarded with substantial salary increments as finance roles with a higher dependency on robotics and automation continue to make a powerful impact on company growth,” Imbert-Bouchard noted. In the financial services sector, a CIO can command annual pay ranging from $250,000 to $500,000, whilst a developer can command an annual salary ranging from $90,000 to $180,000 per year. “Within the Fintech industry there’s increased demand for technology professionals, especially as there’s a growing need for companies to attract professionals who can help understand consumer behavior and attract customers, making skills such as analytics and BI in high demand,” Imbert-Bouchard added. Focus on finance and compliance For financial services, tightened compliance and governance requirements are imminent in 2020 due to a series of new regulations and reforms introduced by the Monetary Authority of Singapore (MAS). Known as the largest regulatory reporting transformation for Singaporean banks in recent history, companies will face mounting pressure from evolving regulatory complexities and compliance requirements. “In response to these new regulations, talented fund accountants, particularly those with hedge fund or private equity experience, are able to command higher salaries due to their regulatory experience,” ImbertBouchard noted. He added that there are certain jobs in the banking sector—mostly transactional roles—that are being replaced due to automation. At the same time, many new roles are being created that are more strategic in nature. “In finance and accounting, internal auditors and financial analysts are amongst the roles within the sector that are impacted by AI and robotics, as the internal audit and analysis process can be enhanced by AI-based software such as Computer Assisted Audit Techniques (CAAT). This is spurring an increase in hiring plans for finance and accounting professionals to help implement AI and/or data analytics programs, with 30% and 25% of CFOs in Singapore indicating intention to recruit permanent and temporary positions of this nature respectively,” he said. A report by Robert Half added that the spread of private banks across Asia has also pushed up demand for private bankers, relationship managers and support staff that are able to come on board with existing business as well. Financial organisations are willing to pay competitively to entice individuals to change jobs and bring with them existing business. This presents potential challenges for banks at a time when large organisations are trying to reduce costs. “There will be a continued shift towards highly technical and niche roles such as tax, treasury and technical accounting as many transactional finance roles have been offshored. The continued introduction of new regulations across markets means that employers will be looking SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

SALARY SURVEY 2019 Employees with salary changes in the last 12 months

Source: Hays Salary Guide

for candidates with a strong technical understanding and familiarity of rules and regulations set by MAS. The increased need for finance professionals to work with the business has also seen hiring managers place greater emphasis on stakeholder engagement and management skills when interviewing candidates,” Bryson said. As a result, a financial analyst can expect annual pay ranging from $70,000 to $90,000, a notch higher compared to starting pay of $65,000 last year. Meanwhile, a senior auditor can command annual pay ranging from $75,000 to $110,000, slightly higher compared to $70,000 to $100,000 last year. “Overall, candidates can expect average salary increments of 10-20% when moving jobs. Candidates with in-demand skill sets may be able to negotiate higher salaries,” Bryson noted. Over in the legal sector, lawyers who speak Mandarin and have experience working in China are in high demand due to the growth of the financial services market in Greater China and Chinese institutions setting up a presence in Singapore. “In particular, there is a shortage of mid-level talent with experience advising on International Swaps and Derivatives Association (ISDA) documentation. We also saw organisations turn to contractors to help handle the increase in volume of negotiations whilst waiting for headcount to be freed up. Salaries in 2019 will remain relatively stable, with a maximum average salary increment of 15% anticipated when moving jobs,” Bryson said. Gig economy on the rise As employers continue to grapple with a growing shortage for workers with niche skills, more firms are adopting a flexible staffing approach. A report by Robert Half showed that three-quarters or 76% of CFOs within financial services said hiring an experienced interim or contract professional would help in their digital transformation efforts, whilst 9% believe that having a combination of permanent, interim and temporary employees is most successful to implement digital transformation initiatives within their organisation. Contract workers provide companies with more agile workforces that respond more quickly to changing demand. A temporary workforce generally results in increased productivity, and improved and faster services for clients. Other benefits include lower staffing costs and immediate access to a wider talent pool of professionals skilled in niche areas such as blockchain, AI, and cybersecurity. 38

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

Rob Bryson

Anurag Garg

“We expect high demand for skilled contracting financial services professionals. Whilst this is partly in response to challenging internal situations such as headcount limitations, organisations are also recognising the benefits of a flexible workforce given the shortage of skilled talent in certain areas. Overall, candidates can expect average salary increments of 10-20% when moving jobs. Candidates with in-demand skill sets may be able to negotiate higher salaries,” Bryson noted. Meanwhile, the demand for short-term HR contractors was driven by the growth of startups, many of which were looking for help to manage internal hiring during peak periods. “Larger organisations also continued to hire experienced HR project and change management professionals to drive transformation and implementations. We expect these trends to continue into 2019,” he added. As for finance, data from Robert Walters showed that the demand for experienced accounting and finance professionals for contract roles has increased by approximately 15% as compared to 2017. “Aside from interim cover and project-based roles, employers are looking to hire on contract basis to assess a candidate’s performance and cultural fit before making a permanent commitment. This has, in part, led to contracts lasting a longer duration of one to two years,” Bryson noted. “Employers are encouraged to consider offering a higher salary package and extend similar benefits as those given to permanent employees to attract top accounting and finance talent for contract and interim roles.” Income from contract work is nothing to sneeze at. For instance, a temporary systems engineer can expect monthly pay ranging from $6,000 to $11,000, whilst a temporary chief information officer can command a monthly paycheck ranging from $25,000 to $40,000. A software architect in the financial services sector can expect a salary per month ranging from $12,000 to $25,000, whilst a cybersecurity specialist with six to 10 years’ experience can expect monthly pay ranging from $10,000 to $17,000. For finance roles, a temporary stint as a chief financial officer can yield monthly salaries exceeding $22,000, whilst an interim role as a price or bid manager can result in a monthly paycheck ranging from $10,000 to $12,000. A contractual position as a group accountant can offer a monthly salary ranging from $7,000 to $9,000, whilst a temporary position as an accounts executive can offer monthly pay ranging from $3,500 to $4,500. Startups are famous for their headline-grabbing perks, but experts caution that free food and colourful playrooms aren’t everything. “Whilst some startups offer higher pay than traditional companies for certain roles, overall, it is hard to compare which side has a better compensation package as both have their own set of perks. For instance, startups may offer candidates a higher salary but no bonuses, whereas MNCs may pay less but the total compensation package includes bonuses and other benefits,” ManpowerGroup’s Teo said. Michael Page’s Garg agreed. “Series A-C startups pay

lower than market average fixed salaries and sometimes, make up for the gap with equity. Series D and above companies tend to pay competitively. In many cases, well backed startups pay better total compensation than traditional companies,” he noted. Startups vs multinationals: who wins? Startups also tend to demand more from their employees as compared with MNCs and other more mature businesses. “Whilst multinational companies are typically able to offer higher salaries than startups, smaller, less regimented companies can get a competitive edge over those organisations by offering non-financial perks. The less structured and agile nature of startups can also entail more responsibility and learning opportunities than a traditional MNC who tend to have long-established work hierarchies and teams that have clear-cut roles and responsibilities. Startups therefore tend to attract candidates who are agile and flexible as they are generally expected to be able to wear many hats whilst on the job,” Imbert-Bouchard said. Because startups generally have smaller teams, a potential hire’s cultural fit can often be as important as the right background and skillset. “Besides technical skills, startups generally look out for candidates who are flexible and have an entrepreneur spirit. Due to the nature of working in a startup environment, they want people who are open to multiple job scopes and do not require a process-oriented environment to thrive,” Teo noted. When it comes to recruitment, a key edge that startups have over multinational companies is their fast and personalised hiring processes. “The hiring process in startups is considerably shorter and incorporates the use of technology at a more effective pace. Recently, Michael Page partnered with an Asian headquartered unicorn to hire a few leadership roles and the hiring period from start to finish was less than three weeks, compared to twenty weeks on average for mature businesses,” said Garg. “The hiring process for startups is more flexible than MNCs. Unlike MNCs, most startups have less structured recruitment processes. Startups also tend to be more open to try new online recruitment platforms which offer companies more creative ways to reach out to talents,” Teo added. Battling redundancy through upskilling Whilst the labour market remains tilted in favour of jobseekers, employees should ensure that their skills are suited to changing employer demand. “Job opportunities in areas such as fintech, digital and healthcare remain good, but require specific skill sets that require proper training,” Garg said. “Understanding market trends and making an active effort to acquire these skills will definitely be key.” “Trends that show up across the board are the consistent and increasing demand for the relevant and right industry certifications and qualifications, such as the Chartered Accountant qualification in finance & accounting, or CISM, CISA, CISSP or CRISC certification in IT services,” ImbertBouchard noted. A way to explore professional upskilling is by taking advantage of government initiatives such as the TechSkills Accelerator (TeSA) programme as well as SkillsFuture initiatives.

Startups are famous for their headlinegrabbing perks, but experts caution that free food and colourful playrooms aren’t everything.

HK JOBHOPPERS DEMAND PAY RISES It still pays to job hop in search of a pay rise, according to recruiters interviewed by Hong Kong Business for our annual survey, with job movers on average able to demand a 10-15 % pay rise, said Matthew Bennett, Managing Director, Greater China at Robert Walters. But if you’re one of the lucky ones with niche skills such as programmers and regulatory specialists, you could command pay rises of 30% or more when moving roles. Other industries which can expect steep pay hikes are e-commerce, artificial intelligence (AI), digital marketing, blockchain, web development and machine learning. Job stayers can expect modest overall salary raise at 3% to 6%, according to a report from Hays, with education and engineering roles experiencing the highest increases at 6.9% and 6.1%, respectively. In contrast, hiring activity by international banks may be static in the coming year. Despite the attractive compensation packages in the tech and finance industries, Dean Stallard, managing director at Hays Greater Bay Area, noted that salary growth has stagnated across most industries. So far, 2019 has proved a slightly worse year for employees than last year, with 45% of employers willing to increase salaries by up to 6%, compared with 50% in 2018. Still, about three in five or 64% of employees interviewed stated that they were ‘satisfied’ with their current remuneration packages. However, only 4% of respondents claimed to be ‘very satisfied’. “More Hong Kong employees are asking for raises with two in five of those who do proving successful, the highest number in Asia,” Stallard said. Meanwhile, fintech jobs are creating a surge in demand for data scientists and engineers, expected to last through 2020, with a focus on machine learning, predictive analysis and NLP, including openings for fresh graduates and junior level employees, explained Cayan Tsim, operations director at Morgan McKinley Hong Kong. A developer skilled in Java, C++ and .NET seeking a permanent entry-level position can expect an annual salary of $390,000 to $540,000. Developers with five to eight years of experience can command salaries of up to $880,000 in 2019 compared to just $840,000 in 2018. From Hong Kong Business

Average salary increment per year vs number of job changes

Source: JobsDB

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

LEGAL BRIEFING

Bitcoin bother puts crypto platform on trial Singapore International Commercial Court decided that cryptocurrencies are properties traded with trust.

ryptocurrencies can now be considered as property, according to Singapore’s courts, after a landmark ruling by the Singapore International Commercial Court’s (SICC) with regard to Quoine, a currency exchange platform which was involved in a case with one of its traders. Due to a software glitch, seven trades of Ethereum for Bitcoin were mistakenly placed by trader B2C2 with its counterparties at 250 times the prevailing rate or 1 ETH to 10 BTC. When Quoine realised the glitch the following morning, it cancelled the seven trades and reversed the debit card transactions. T h is triggered B2C2 to commence action against Quoine, alleging that by unilaterally reversing the seven trades, Quoine was in breach of the terms and conditions governing their trade. The trader also claimed that by unilaterally withdrawing the proceeds credited to B2C2’s account, Quoine was in breach of trust. Can a trust be created over cryptocurrencies? Q. “To create a trust, there must be certainty of intention, certainty of subject matter and certainty of objects. For certainty of subject matter, the SICC held that cryptocurrencies have the fundamental characteristic of intangible property and can be the subject matter of a trust,” said Joy Tan, joint head - commercial & corporate disputes practice, WongPartnership.

The dispute on this issue centred on the requirement of certainty of intention to create a trust. She added that regarding certainty of objects, the intended beneficiaries must be identifiable. In this case, the beneficiaries were identifiable from the individual accounts of each user held by Quoine. The dispute on this issue centred on the requirement of certainty of intention to create a trust, said Rajah & Tann in a legal note. “Quoine contended that there was no such intention, on the basis that there was no provision to that effect in the Terms and Conditions, and further on the basis that certain statements were made to the effect that assets deposited by customers were not deposited in a separate account with a trust bank.” Q. How can a breach of trust occur in cryptocurrency deals? The SICC found that there was an intention to create a trust, Tan noted. This meant that if Quoine was not entitled to reverse the trades, the unilateral removal by Quoine of Bitcoin from B2C2’s account held with Quoine was a breach of trust. SICC held that the decisive factor, in this case, was that the assets were held separately as customers’ assets, rather 40

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

Seven trades were placed at 250 times the prevailing rate, 1 ETH to 10 BTC.

Joy Tan

than as part of the Quoine’s trading assets. According to Ong, this was “a clear indication that Quoine claimed no title to them and intended to hold them on trust for the customers.” In the premises, given that Quoine had no entitlement to reverse the trades, SICC held that Quoine’s actions in unilaterally removing the BTC sales proceeds from the B2C2’s account was in breach of trust, he added. Can trade orders be reversed on the basis of terms Q. being implied into the governing contract? What is meant when a contract states that fulfilled trade orders are “irreversible”? A term could be implied into a contract if it does not contradict an express term of the contract, and is necessary to give business efficacy to that contract and to give effect to the intention of the parties. Tan noted that one of the terms and conditions between Quoine and users of the Platform expressly provides that “once an order is filled, you are notified via the Platform and such an action is irreversible”. “Quoine sought to rely on certain implied terms including one which would enable it to reverse any trades executed at an abnormal rate or price as a result of any technical or system failure or error affecting the Platform. Quoine also argued that the word ‘irreversible’ was meant for the contracting parties who traded on the Platform but did not preclude Quoine from reversing trades,” Tan said. She added that the SICC disagreed and held that the word “irreversible” was not qualified in any way, and when read in its context, extended to all parties (including Quoine) so as to ensure certainty for all parties. “The SICC also held that the terms sought to be implied by Quoine would contradict an express clause of the Agreement and cannot be implied. Further, there was no necessity for such terms to be implied to give business efficacy to the Agreement or to give effect to the intention of the parties,” she concluded.

CO-PUBLISHED CORPORATE PROFILE

Akribis: Made in Singapore, made for the world It surpassed brands from US, Germany, China and Japan in the linear motor market.

Israel and China. Akribis started its China leading company in the motion operations in Shanghai, in 2010. Since control business, Akribis Systems then, it has also opened up offices in designs and manufactures Suzhou, Shenzhen, Beijing, Tianjin, Wuhan, direct drive motors and high precision Hangzhou and Guangzhou. It also has systems that are used in automation manufacturing facilities in Singapore and equipment. These capabilities of Shanghai. In 2018, the company reached automation equipment are used to a sales revenue of $64 million or close to make semiconductors, hard disks, smart US$48 million. phones, robotics, electric car batteries, biomedical products, machine tools, Market leader in linear motors television display panels, and so forth. The core products of Akribis include Akribis can potentially serve any industry direct drive motors and high precision that requires precision motion control up stages that are the best in class in the to the micron or submicron levels. manufacturing and automation industry. From its humble beginnings in 2004 These direct drive when it was motors include linear set up by four “Akribis’ direct drive motors motors, torque motors Singaporean founders, the and high precision stages and voice coil motors. company now are the best in class in the Customers choose Akribis’ products employs more automation industry.” because this type of than 560 people direct drive motor worldwide. technology is in itself a revolution in the manufacturing and World-class customisation automation industry. What sets Akribis apart is how it can By driving the loads directly, a linear customise products to fit its clients’ motor replaces conventional rotary needs. Much like the human body, motor technologies that use transmission each part is created with the perfect mechanisms, such as ball screws. Direct design and the utmost precision. The drive technology enables higher precision legs and hands won’t move without the and higher speed in motion control, brain telling the muscles to compress resulting in greater productivity and and contract, the same way the motor accuracy in manufacturing processes. components of stages or modules of This allows more product units in a lesser a machine will not function properly without controllers and drives. All of these parts need to work hand in hand and must be modified down to the smallest component to guarantee optimal performance, making sure that everything is in place down to the most minute detail. Akribis develops its own technology, owns all the intellectual property and sells the products under its own Singapore brand. The company at present owns 34 patents worldwide, including those in the United States, Europe, China, Japan, Korea, Israel, and Singapore. It has also grown from one company in Singapore to become a multinational with headquarters in Singapore, and offices in the United States, Germany, Direct drive motors and high precision stages Japan, Korea, Taiwan, Thailand, Malaysia,

amount of time, translating to fewer machines and resulting in economies of scale. Akribis is currently the market leader of linear motors in China, surpassing other brands from the United States, Germany, China and Japan. As specialists in the design and manufacture of direct drive motors and high precision systems utilised in automation equipment, the Singapore-based brand has been a benchmark in any industry that requires precision motion control, with more than 500 customers in China and more than 800 customers worldwide. Customers who use Akribis’ direct drive motors have the enhanced capability of making faster and more precise automation machines, giving them an optimal advantage over competitors who use traditional or conventional – or worse, obsolete – technologies. Being a “Made in Singapore” brand, Akribis Systems has established a list of products that can be used not only by local firms but also by companies all over the world. As Akribis takes strong strides towards the future, the company promises to continue investing in R&D, manufacturing and overseas sales network. With these objectives in place, Akribis Systems is expected to grow at a faster rate in the coming years, due to growth in industrial automation and precision requirements.

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

INDUSTRY INSIGHT: BANKS wealth management services. “The talent pool that Singapore has managed to develop during its expansion phase is also a lure for fintech firms. In addition, the favourable business conditions in terms of startup costs and lower taxation aid exponential growth opportunities,” said Oriano Lizza, sales trader at CMC Markets.

The city’s regulatory landscape is encouraging fintechs.

ASEAN fintechs’ invasion of Singapore has no end in sight 43% of fintechs in Southeast Asia choose Singapore as their home as growth prospects for blockchain, online lending, and AI in the city strengthen.

ingapore is attracting the largest share of fintech investments amongst Southeast Asian countries, as the fintech industry in the region is expanding not only in scale but also in scope. The city is branching out to areas such as wealth management, insurance and remittance services from digital payments and mobile wallets. With robust economic growth and a young, fast-growing population, the number of fintech ventures in Singapore increased by about 60% to 756 at the end of October 2018 from 479 at the end of 2017, according to a report by Moody’s Investors Service. By end-October 2018, Singapore accounted for the largest number of fintechs amongst ASEAN countries, home to 43% of those companies in the region, up from 39% at the end of 2017. Equity investments in fintechs, including mergers and acquisitions (M&As), almost doubled in value to about $474.11m (US$350m) from 2016 to 2018. Whilst fintech-related investments and M&As in Singapore in 2018 were less than 2% of the total in the Asia Pacific, Singapore continued to be the top ASEAN

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

The number of fintech ventures in Singapore increased by about 60% to 756 at the end of October 2018 from 479 at the end of 2017.

nation in attracting new investments and entrants, and its fintech industry has grown more diverse. Prior to 2017, fintech investments in ASEAN were primarily for digital payments and mobile wallets as companies sought to take advantage of strong demand for such services amongst consumers with easy access to smartphones and the internet. Kenny Liew, ICT analyst at Fitch Solutions, said that the payments market is currently saturated and interoperability remains a key issue. “A lot of mobile wallets and payment systems are engaged in cannibalising each other’s market share. This is beneficial for consumers, but continues to be loss-making for the payment operators,” he said. As the payments market matures, new fintech investments are increasingly flowing into emerging areas such as blockchain, online lending platforms, investment technology, robo advisory and artificial intelligence. Particularly, more than 30% of fintech funding in Singapore in 2018 was for technology development related to financing for small and medium-sized enterprises (SMEs) and

Regulators’ welcoming approach Whilst regulatory requirements have been a key obstacle to fintech development globally, Moody’s said that Singapore knows the fine line between support and restriction, as fintechs have been regulated from expanding into key banking businesses. “The supportive regulatory environment, along with other financial incentives and programmes introduced by the government, has led many fintech companies with regional expansion plans to choose Singapore as the location of their headquarters,” Moody’s said. Fintechs have had success in areas with relatively light regulatory requirements, such as payments, whilst some new entrants are circumventing regulatory barriers through partnerships with banks, according to the report. Regulators are also working on sandboxes to spur innovation in financial services and actively engaging with banks to test new technologies. They are also expanding oversight of fintech companies. Under the Payment Services Act implemented in February 2019, regulators have expanded their regulatory oversight to all service providers using payment systems. Importantly, fintech companies offering electronic wallets are prohibited from using wallet funds to make loans without a banking license. Previously, electronic wallets, payment account issuance, domestic money transfers and merchant acquisition services were not regulated. Singapore’s regulatory sandbox has since led to the creation of numerous fintech companies. Further, in November 2018, the Monetary Authority of Singapore (MAS) held a public consultation on the establishment of a pre-defined sandbox, dubbed “Sandbox Express,”

INDUSTRY INSIGHT: BANKS which will allow fintech firms to start experiments more quickly, without going through the application and approval process under the current sandbox programme. Lizza mentioned that two firms that have graduated through the sandbox initiative are PolicyPal, an insurance company which utilises AI to manage and optimise customers insurance portfolios, and Istox, which through the integration of blockchain have established a capital market to open up opportunities for young firms to gain access to capital and private investments. Amongst other various initiatives, Singapore is working towards enabling interoperability of payment systems, and both banks and fintech companies will soon be able to provide real-time fund transfers to any payment accounts in Singapore. In September 2018, Singapore launched the Singapore Quick Response Code (SGQR) to consolidate multiple payment QR code platforms used by more than 27 operators of mobile payment services into a single system. This simplified the use of QR codes for payments and encouraged more consumers and merchants to adopt mobile payments. “Singapore is amongst the most advanced in the world in terms of implementing open banking, which uses application programming interface (API) technology to enable the sharing of banks’ customer data with third-party companies, which will help banks work with fintechs to develop new digital products and services. Other government efforts include developing blockchain

Penetration of financial services is still low in ASEAN

Kenny Liew

Source: The World Bank, Moody’s Investors Service

Oriano Lizza

Fintech businesses in ASEAN are increasingly diverse

Source: UOB

applications and improving cybersecurity. The government has also introduced initiatives to encourage private sector companies to develop their digital capabilities, whilst the MAS has signed partnerships with more than 29 regulators globally to promote crossborder collaboration in developing the fintech industry,” Moody’s said. Foreign financial institutions also seek to take advantage of Singapore’s vibrant fintech scene and welldeveloped regulatory framework. Notably, banks like Standard Chartered Bank, Bank of China, Deutsche Bank and Westpac Banking Corporation, as well as insurers and payment service operators, have established innovation labs or hubs in Singapore. Better returns from digital Whilst digitisation has helped banks improve efficiency and lower customer acquisition and transaction costs, Moody’s noted that efficiency gains from digitisation have been insignificant as the banks are channelling cost savings back to technology investments. In the case of DBS and OCBC Bank, digital retail and SME customers, on average, generate twice or three times as much in revenue as traditional customers. Compared to a branch customer, each digital customer at the two banks holds more products, maintains a larger deposit, loan or investment balance, and makes transactions more frequently. “Digital customers make up most of the revenues from the retail and SME businesses at DBS and OCBC,

compared to traditional customers. In DBS’ wealth management and private banking business in Singapore and Hong Kong, a subset of the bank’s retail business, although digital customers made up 43% of total segment customers as of the end of June 2017, they contributed 53% of income in the first half of 2017,” Moody’s added. Local banking groups have set up teams dedicated to creating convenient, innovative products. “Singaporean banks have also recognised that increasing smartphone penetration in emerging markets with young populations, such as ASEAN countries and India, will create a need for branchless banking, leading to the launch of their own digital banks in the region,” Moody’s said. Singapore’s big three banks, which account for more than 60% of domestic deposits, have ample financial resources to invest in the development of digital capabilities and integrate them into their business models. The incumbent banks have been seeking to improve efficiency through digitisation. According to Moody’s, digital customers are more profitable than traditional branch users because, on a per-customer basis, they generate more revenue through closer engagement with their banks. The three largest banks’ key retail and small and medium-sized enterprise businesses have grown substantially in recent years, and their profitability has improved, helped by digitisation. By Luz Wendy Noble SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

ANALYSIS: ASIA PACIFIC BANKS

Banks miss US$100m yearly by failing to tap into wealth, SME lending segments Wealth management and SME lending have pent-up demand in underserved markets, argued McKinsey.

hilst Asia-Pacific banking could appear that it is strong and growing, closer scrutiny reveals that tapering growth is the most obvious sign of a weakening environment for Asia-Pacific banking. Notably, in 2018, banking in Asia Pacific generated revenues of approximately US$1.6t. The region’s profits (before taxes) topped US$700b in 2018, representing 37% of global banking profit pools. However, whilst the region’s banks enjoyed double-digit annual growth from 2010 to 2014, from 2014 to 2018, annual revenue growth shrank 5%, and growth in profit pools slowed down to 3%. Whilst there was a slight recovery in banking profit pools in certain markets from 2017 to 2018, the longer trend of slowing GDP growth in China and India, Asia Pacific’s two largest emerging economies, has weakened economic expansion for the entire region and dampened

demand for banking services. The average risk cost provision for the Asia-Pacific market was approximately 0.30% in 2018. This is the highest level of loan losses for the region since 2002, when the average risk cost provision for emerging and developed Asia-Pacific markets hit approximately 0.31%. Four business lines With new competitors entering the field even as growth is slowing, banks must act promptly to capture the US$100b annual opportunity for new revenue. This opportunity is spread across four business lines—wealth management, retail lending, SME lending, and transaction banking— each buoyed by pent-up demand in underserved markets. To pursue these opportunities, banks must beat the attackers at their own game—establishing robust digital-first delivery and servicing platforms and developing advanced

To win in wealth management, banks need to strike the right balance between self-guided digital tools and high-touch consultation, according to the distinct needs of each segment.

US$100b of revenue can be unlocked via wealth management, retail lending, SME lending, and transaction banking.

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

analytical decision engines to track real-time changes in the needs of individual customers. To win in wealth management, banks need to strike the right balance between self-guided digital tools and high-touch consultation, according to the distinct needs of each segment. Personal financial assets (PFA) in Asia Pacific are expected to total US$69t by 2025. Growth in the region’s PFA is driven primarily by the increase in retirement assets in developed markets (as the population ages) and the expansion of the entrepreneurial class (especially mass affluent and high-net-worth segments) in emerging markets. Wealth management opportunities At the current annual growth rate of 9%, Asia Pacific will account for three-quarters of global PFA within six years. At present, however, this is a largely untapped market—an estimated 80% of Asia Pacific’s

ANALYSIS: ASIA PACIFIC BANKS personal financial assets is not actively managed by third-party professional managers. Investors in China will likely seek new onshore products as regulators tighten limitations on shadow banking, and the recent introduction of majority ownership in joint ventures and wholly owned foreign entity (WOFE) licenses broadens opportunities for foreign investment managers in China. Partnerships and acquisitions provide an effective means to deliver sophisticated investment options to local markets. For example, Siam Commercial Bank (SCB) and Julius Baer announced in 2018 an agreement to combine SCB’s expertise and large customer base in Thailand with Julius Baer’s global wealth management capabilities and product suite.

SMEs contribute 54% of GDP in Asia but generate only 25% of total banking revenues before risk costs.

Retail lending Partnerships are an increasingly important means for extending market reach not only in wealth management but in practically all banking businesses. In retail lending, which is expected to grow from a total of US$12.8t in 2018 to US$21.2t in 2025, many banks are discovering that by partnering with a strong digital company— e.g., an e-commerce site, a telecommunications company—they can reach new customers and collect richer data. This enables banks to generate highly reliable risk scores for the region’s fast-growing middle class, which is expected to expand from 40% of all Asia-Pacific households in 2018 to more than 60% in 2025. Kotak Bank, for example, has partnered with telecommunications ROAE in developed markets by market share

Source: McKinsey

Return on average equity (ROAE) for Asia Pacific’s developed markets

Source: McKinsey

company Bharti Airtel, not only reducing the costs of new customer acquisition and service delivery but also gaining access to Airtel’s network of 250,000 retail stores in India. In 2016, it extended further into the mass market of lower-income consumers through its acquisition of BSS Microfinance (217,000 customers and 78 branches). Various types of secured and unsecured consumer lending represent a big opportunity for AsiaPacific banks. However, in order to keep risk costs low whilst extending loans to consumers with limited or no credit history, banks will need to develop powerful diagnostic models not only to assess risk accurately but also to identify precisely the type of credit product best suited to individual users. It is particularly important to restrict customised credit offers to segments where product penetration is low relative to GDP, as regulators are keen to reduce debt levels in overpenetrated segments. Banks should also prioritise “asset light” credit products in order to optimise the amount of capital they must set aside to meet Basel III capital requirements. Bank lending to small and medium-size businesses accounts for more than a third of all bank loans in Asia Pacific, and the SME portfolio is expected to grow 9.1% annually to US$23t in 2025. Whilst the SME segment accounts for the biggest share of Asia-Pacific lending, banks are still missing the better part of the opportunity. SMEs contribute 54% of GDP in Asia but generate only 25% of total banking revenues before risk

costs. The vast majority of SMEs in Asia Pacific turn to non-bank sources to finance working capital. SME lending loopholes The challenge for most banks is that they lack the information they need to assess the creditworthiness of SMEs accurately and often make bad lending decisions. As a result, banks’ risk costs for the SME segment in Asia Pacific are double those for the large corporate segment. Lending to SMEs is potentially a highly profitable business for banks that can leverage digital channels to reach the mass market of SMEs and use advanced analytics to identify qualified borrowers for both secured and unsecured lending. CMB, for example, has built a fully digitised SME services platform, through which they offer a streamlined loan application process. The automated review is completed within minutes, and customers can access funds immediately upon approval. Third parties provide additional services by linking to the platform through APIs, helping to increase activity on the platform. In 2018, CMB’s NPL ratio was 1.36%, compared to an average of 1.8% for China. Banks can tailor platform solutions for SMEs and use them both to acquire new customers and deepen existing relationships. CBA’s Wiise, for example, is a cloud-based business management platform designed especially for SMEs. Services on the platform, which integrates seamlessly with CBA’s invoicing platform, include accounting, payroll and banking, human resources, and SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

ANALYSIS: ASIA PACIFIC BANKS Market share split across Asia-Pacific suggests varying potential for consolidation across markets.

Source: McKinsey

inventory management In addition to helping banks reduce loan losses among SMEs, the vast and diverse types of customer data generated on an SME platform can enable banks to craft timely offers for investing excess cash, payroll management, accounting and reconciliation processes, and more. Growth in transaction banking Not only does transaction banking account for approximately a third of all banking revenues in the Asia Pacific, but the region also captures more than half of transaction banking revenues globally. During a decade of lacklustre growth in other regions (5% in the Americas and 2% in EMEA), transaction banking in Asia Pacific has grown 17% annually. Finally, supply chain finance (SCF), which is expected to grow 14% annually, not only enables a bank to embed use cases (e.g., sourcing, financing, invoicing, reconciliation) within corporate treasury and trade operations, but also to strengthen relationships with corporate clients’ suppliers, many of which are SMEs. There are various initiatives to establish SCF platforms using distributed ledger technology. These include IBM’s partnerships with logistics and shipping companies, as well as government-led industry consortia, such as the Global Trade Connectivity Network (GTCN), led jointly by the Monetary Authorities in Hong Kong and Singapore. Industry consolidation incoming? Given the competitive advantages that come with scale and being fast to market, some banks are finding that mergers and acquisitions—along 46

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

with strategic partnerships—are an efficient way to enhance their customer propositions. Findings show that 79% of leading banks have partnered with a fintech to foster innovation in payments, lending, investment, or other areas. Thailand’s Kasikornbank and Grab have teamed up to launch GrabPay by KBank, a mobile wallet. BRI has partnered with Alipay to expand point-of-sale acceptance of mobile payments for Chinese tourists visiting Indonesia. OCBC Bank has joined forces with personal finance portal MoneySmart to offer low-rate mortgages. UOB has partnered with OurCrowd, which enables consumers to invest small amounts in startups. Acting as an orchestrator or as one of several lead partners, a bank may establish a platform or digital ecosystem, developing APIs that enable third parties to link to the platform and introduce relevant services. Banks should also improve the way they develop and deliver solutions by implementing the latest DevOps tools and methods across the development pipeline, which can speed up time-to-market by 80%, reduce time spent on diagnostics by 75%, and cut FTE by 75%. At Macquarie, for example, application development teams interface with a self-service development platform, moving rapidly through live-testing and application enhancements to full launch. Many banks have adopted a “federated” governance framework (controls and responsibility shared among business units, domain owners and stewards, and CDO/

Banks should also improve the way they develop and deliver solutions by implementing the latest DevOps tools and methods across the development pipeline, which can speed up time-to-market by 80%, reduce time spent on diagnostics by 75%, and cut FTE by 75%.

data management centre) as the most effective approach. In addition, it is crucial to determine who owns the data and how to limit access to protected data. Managing metadata—how data sets are organised and labeled—also falls within the scope of governance. For certain types of data, partnerships can reduce storage costs and help banks comply with data privacy and security requirements. For example, ANZ, NAB, and Westpac have each invested in Australian start-up Data Republic, a data hub through which organisations can store, exchange, and collaborate on aggregated data projects in a secure environment. Amping up competitiveness A special push is required to go the last mile and embed analytics in the everyday work of tens of thousands of employees. Breakaway analytics firms generally devote at least 50% of analytics investments to developing visualisation tools and training frontline staff, product managers, and others on the use of analytics insights in customer interactions Moreover, 50% of banking jobs could see half of their activities automated by 2030. Investing in leaders is another critical element in building the workforce for a digitalfirst, data-driven organization Top digital talent is scarce, and companies from all industries are competing to fill fast-growing needs. Demand for digital capabilities is estimated to outstrip supply by a factor of four, and demand for big data talent is expected to be between 50 and 60% greater than the projected supply over the next three to five years.

Asia Pacific banks with larger scale perform better

Source: McKinsey

ANALYSIS: ASIA PACIFIC BANKS

How banks in Asia Pacific can survive in an age of declining profitability Cutting down branches and migrating banking services to online and mobile channels are key to keeping costs down.

here was no way it could have lasted forever. After enjoying double-digit annual revenue growth from 2010-2014, banks in Asia Pacific are starting to witness tapering growth trends with annual revenue growth slowing to 5% in 2014-2018 and growth in profit pools easing to 3% over the same period, according to McKinsey’s annual banking review. The average return on equity for Asia Pacific fell from 12.4% in 2010 to 10.1% in 2018, signalling what some argue to be the end to the Asian miracle, although the region’s profitability still ranks above the global average of 9.5%. The negative trend can be observed across developed and emerging markets in the region with only lenders in Singapore, South Korea and Vietnam turning the tide and posting improved ROAEs in 2014-2018. Joydeep Sengupta, Asia–Pacific banking practice leader at McKinsey and one of the primary authors of the report, highlights best practices for banks in the region to survive the fintech threat as well as the four growth areas that banks can embrace to shift the narrative in their favour. The conversation has been shifting towards cost efficiency and brand rationalisation with Japanese banks shutting down branch after another and Chinese ATMs gathering dust amidst the popularity of AliPay and WeChat. How do you see this trend developing? If you look at a return on equity, and the pressure on return, this has come largely from declining margins across most product categories virtually across all markets. The other factor has been deteriorating risk environment, where the risk costs have systematically gone up across many markets. Even though we’ve seen a lot of effort made by banks that have been in part successful in containing costs, in aggregate, the cost efficiency gains have not been sufficient to overcome the declining margins and the increasing risk costs - which is why we’ve seen this kind of decline. Although the situation for Asia is fragmented, what’s their regulatory situation like and how do they weigh in on earnings outlook for banks across the region? By and large, regulators have been largely very progressive, meaning there is a lot of encouragement for innovation. You’ve seen a lot of regulatory interfaces, open banking, changes in payment systems and the creation of regulatory sandboxes. At the same time, we are also seeing regulators beginning to worry about systemic risk given the world that

Joydeep Sengupta

these players are creating and the disruption they bring. They’re worried about data privacy and cyber security. The regulatory environment, whilst being progressive, will see more debate on how to ensure that institutions are allowed to provide the best deal for the customer whilst making sure that the system itself is stable. That is the fine line which many regulators are beginning to walk. Fintech and bigtech have proven their merit in targeted areas although they have yet to fully capture the fulllending cycle. How do you see this landscape developing, especially when the conversation is shifting towards competition and cooperation? Fintechs and bigtechs have had a profound impact on the market and the consumers. They have very strong analytical tools and capabilities and use data more intelligently and profusely in their lending models than many of the banks. As a consequence, they have been driving digital lending into retail and the small business segment, but at the same time, putting a tremendous amount of pressure on bank margins, because their cost of acquisition is much lower than traditional banking models. However, the quality of the loans need to be tested through a down cycle. Unlike the traditional banking model, which has gone through many up and down cycles over decades, I think this is a relatively new phenomenon that hasn’t been tested in an economic down cycle. We’re not saying that they won’t hold true or they won’t be solid but to confidently declare victory of fintechs, they need to be tested through a down cycle. From a banking point of view, their ability to claim a segment will depend a bit on the partnerships with fintechs, bigtechs, or other ecosystem players with whom it can access customers, and information at a much lower cost. We will certainly see some element of coexistence between the two. Do you believe bank branches will remain relevant? If you go back historically, the role of the branches, to a large extent had been threefold. One is really acquiring customers, a second is enabling and helping the transactions that customers do and a third is offering advice and cross selling other products. What’s happening with the whole digital plays is that a large part of the transaction business is disappearing. Most banks are seeing a sharp drop in transaction volume happening at their branches so many banks are trying to find a way of moving the transactions out to a call centre, to digital channels or even to the ATM. For many banks, today, 95-98% of transactions are done outside of branches. In more mature markets, banks are also reorienting branches to focus on customer acquisition since there aren’t that many new customers to acquire but are shifting towards advisory. This means that the look and role of the branch is shifting from an acquisition and a transaction point to advisory point. The role of the branches are changing and the kind of people that need those branches also change. That’s the dynamic which we will see happen, as opposed to just a blind a shot at cutting the branches. SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

EVENT COVERAGE: SBR TEA AWARDS

Singapore Business Review honours 36 innovative firms

ingapore Business Review awarded the most outstanding companies at the inaugural SBR Technology Excellence Awards held at Conrad Centennial Singapore last 30 May. The SBR Technology Excellence Awards recognises companies in Singapore with groundbreaking products and solutions that have successfully served the changing needs of customers and internal processes. Winners of the Technology Excellence Awards come from industries that have remarkably contributed to transforming businesses through technology. This yearâ&#x20AC;&#x2122;s nominations were deliberated by an elite panel that includes Cheang Wai Keat, Head of Advisory, Ernst & Young LLP; Darwin Thio, Director, Cybersecurity & Technology Services, Nexia TS; Daryl Pereira, Head of Cybersecurity, KPMG; Evelyn Lim, Executive Director, Tax Advisory, BDO LLP; and Jonathan Kok, Co-Head of Technology, Media & Communications Industry Group, RHTLaw Taylor Wessing LLP.

SBR TEA Podium

Affle International Pte Ltd

AIA Singapore

Singapore Business Review congratulates the following winners: Acronis Asia Pte Ltd - Back-up - Computer Software Acronis Asia Pte Ltd - Cloud - Computer Software Affle International Pte Ltd - Mobile - Advertising AIA Singapore - Information Management - Life Insurance AP Media Pte Ltd - Digital - Media & Entertainment Automation Anywhere - AI - Business Services Cashwagon Pte Ltd - Digital - Financial Services Changi Travel Services Pte Ltd - Connectivity - Retail Equinix - Cloud - Data Center EverComm Uni-Tech Singapore Pte Ltd - IoT - Hospitality & Leisure Feigin Electric Singapore Pte Ltd - IoT - Energy Here Technologies - IoT - Location Services Huawei International Pte Ltd - Network and Broadband - Data Center Huawei International Pte Ltd - Network and Broadband - IT Services IPC Systems - Connectivity - Financial Services IPC Systems - Infrastructure Technology - Financial Services Kaspersky Lab - Cybersecurity - IT Services Knowledge Navigator Pte Ltd - AI - Real Estate Lantone Systems Pte Ltd - ICT - Business Services LINFINITY Pte Ltd - Blockchain - IT Services LogRhythm - Cybersecurity - Computer Software NetFoundry Inc. - Connectivity - Life Insurance Netpluz Asia Pte Ltd - Network and Broadband Telecommunications Novade Solutions Pte Ltd - Digital - Real Estate NTUC Income Insurance Co-operative Limited - Digital - Personal Insurance Oxfordcaps Pte Ltd - Digital - Hospitality & Leisure Park Place Technologies - Infrastructure Technology - IT Services Persistent Systems Pte Ltd - AI - Financial Services RedDoorz - Big Data - Hospitality & Leisure SolarWinds Software Asia Pte Ltd - Virtualization - IT Services SP Telecommunications Pte Ltd - IoT - Telecommunications Subex - Analytics - Telecommunications Suites Digital Pte Ltd - Enterprise Software - Business Services Tagit - Digital - Banking The Great Eastern Life Assurance Co. Ltd. - Digital - Life Insurance The Great Eastern Life Assurance Co. Ltd. - Mobile - Life Insurance Tookitaki Holding Pte Ltd - AI - Banking Turnkey Lender - FinTech - Financial Services VIAVI Solutions - Infrastructure Technology -Telecommunications YOTEL Singapore Orchard - Robotics - Hospitality & Leisure 48

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

AIA Singapore

AP Media Pte Ltd

Cashwagon Pte Ltd

Technology Excellence Awards 2019

EverComm Uni-Tech Singapore Pte Ltd HERE Technologies

Equinix

IPC Systems

Kaspersky Lab

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CO-PUBLISHED CORPORATE PROFILE include Raffles, Orient Express, Banyan Tree, Delano, Fairmont, SO, Sofitel, The House of Originals, SLS, Mondrian, Mantis, Pullman, Hyde, Pullman, Swissotel and Movenpick.

Accor’s new lifestyle loyalty programme, ALL – Accor Live Limitless – will allow members to live, work and play without limits.

How Accor is creating new possibilities to live, work and play The hotel group is set to launch a revitalised loyalty programme for its most loyal customers.

he world is changing fast, which requires companies to constantly evolve and keep up with their customers’ changing needs. In this regard, the hospitality world is no exception, with the huge amount of disruption brought about by Airbnb and other online travel agents in the hospitality space over the past few years. Accor, the largest hotel operator in Europe, Asia Pacific, South America and the Middle East, is redefining hospitality with this year’s launch of ALL or Accor Live Limitless—a completely revitalised loyalty lifestyle programme that enables members to get the most out of their travels and everyday lives through unique itineraries and experiences. Thanks to Accor’s transformation, the group expanded into new travel verticals to enrich the lives of its guests every day. Accor offers a broad range of brands and services, and an even wider geographical spread, describing its role as far more than just a hotelier. New experiences to enrich lives By designing new experiences for people’s travel and daily lives, Accor aims to answer tomorrow’s lifestyle needs today. The newly transformed Accor provides a holistic ecosystem of services to meet the needs of its guests, whether in work, life or play. With numerous acquisitions and investments in lifestyle, luxury, concierge,

co-working spaces, dining, restaurants, nightclubs and digital booking platforms, the group allows its guests a chance to live without limits. Accor houses 38 hotel brands to choose from, 26 in the luxury and premium space and 12 in midscale and economy, with over 4,800 hotels and resorts globally—so no matter where people go, they can find the right place to stay regardless of budget or reason for travelling.

Luxury with a French touch and local roots As one of the largest operators of luxury hotels in the world, with over 600 globally, Accor is the only French player amongst the biggest hotel groups. Everyone knows that when it comes to luxury, the French do it best—think Hermès, Christian Dior, Chanel, Louis Vuitton and Louboutin as some of the benchmarks of French luxury. Accor is bringing that same sense of quality and elegance to ensure that guests feel welcome anywhere in the world they choose to stay, delivering a unique savoir faire to elevate the hotel experience. Amongst a fast-growing portfolio of iconic names, their luxury and premium brands

Caring for the planet and its people Accor contributes to making the world a better place by making sure that the benefits of tourism go beyond each guest. The group’s CSR programme is committed to environmental advocacies and the highest ethical standards through its sustainability goals, which are all about empowering local communities via building education centres, giving back to the disadvantaged through hospitality training for the youth, as well as reducing its environmental imprint for the health and future of the planet by sourcing local, organic and ethical products and planting sustainable crops. With these initiatives towards sustainability and corporate responsibility, the group is connected to the changing world, leading the way in defining the future of hospitality for upcoming generations through different verticals and services outside the traditional hotel experience.

Accor promises a warm welcome and human connection wherever guests travel.

“Accor is bringing that same sense of quality and elegance to ensure that guests feel welcome anywhere in the world they choose to stay.”

Technology Excellence Awards 2019

DIGITAL - PERSONAL INSURANCE

Income spearheads next phase of insurance growth through new value propositions It recently launched lifestyle insurance products Droplet and Pinfare for the modern Singaporean.

TUC Income (“Income”) was established in 1970 to provide affordable insurance for workers in Singapore. Today, one third of Singapore’s population looks to Income for trusted advice and solutions when making their most important financial decisions. As the largest composite homegrown insurer in Singapore, Income puts its customers at the core of its digital transformation. Peter Tay, Income’s Chief Operating Officer, commented, “At Income, we recognise technology to be a core enabler in transforming insurance. We are committed to digitalise our business while exploring new opportunities concurrently to enhance customers’ experience with insurance.” To cater to the lifestyle of the modern Singaporean, Income recently launched two lifestyle insurance products, Droplet and Pinfare. Droplet is a lifestyle-inspired insurance that protects users against surge pricing on ride-hailing platforms like Grab, Ryde or Go-Jek on rainy days by paying back 60% of ride fares. Pinfare, on the other hand, addresses one of the most common traveller’s pain points – the pressure to purchase a desired flight itinerary on-thespot, or be subjected to unpredictable price fluctuations and a higher airfare later.

With 20% of Droplet policy purchases coming from returning customers, it is proof that customers today are taking to everyday, parametric insurance. A frontrunner in innovation Through a three-pronged approach, Income’s digital innovation arm, the Digital Transformation Office (DTO), brings innovation to life through developing the company’s internal capabilities, harnessing strategic partnerships with industry players and connecting with startups in the global ecosystem. Building internal capabilities In the span of two years, DTO has built up the company’s capacity internally, giving its new digital business and digital transformation team the space to reimagine and transform insurance. To enable agile delivery of projects, DTO is staffed with launchers, designers and growth hackers who have a diversity of professional experiences that range from law and banking to technology and consultancy. With a mandate to function like a startup to explore new opportunities, Droplet and Pinfare were launched with great speed in the last eight months. With new lifestyles that centre on digital

“We aim to be future-ready to meet the digital lifestyle needs of tomorrow by disrupting insurance today.”

From left to right: Poh Chen Wei, Peter Tay, Tan Wei Chyin, Max Tiong and Kong Ming Jie

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

behaviours, Income is set on identifying new opportunities to bring value to customers via insurance products and services across its key business lines which include life, health and general insurance. Developing strategic partnerships with industry leaders To bring innovative insurance offerings to the market quicker and more efficiently, Income entered a strategic partnership with ZhongAn in April 2019. Harnessing ZhongAn’s deep technological expertise and ecosystem partners, Income will test-bed digital innovations via ZhongAn’s technology platform to bring new products to the market with speed. “Recognising that digital disruptions have cultivated new consumer behaviour, we aim to be future-ready to meet the digital lifestyle needs of tomorrow by disrupting insurance today,” Tay added. Connecting with the global startup ecosystem Income’s insurtech accelerator, Future Starter, has been collaborating with the startup community to advance ideas and redefine standards for the insurance industry. Some of the successful innovations launched thus far include Jiffy Jane, a travel insurance chatbot on Facebook Messenger, and Accident Reporting, which empowers distressed and time-pressed motorists to submit accident reports remotely within 24 hours of an accident. Maintaining the lead as a digital insurer All Income staff are enrolled into a two-day design-thinking workshop. This equips each employee with an agile mindset and the right skillset to better ideate and innovate new customer-centric solutions in the digital era. “Digitalisation and innovation are on an infinite continuum. Possibilities are also limitless. Hence, it is important we leverage our biggest asset in the company – our people – to ensure that we have a constant pipeline of talent with sharp skillset and the right mindset to lead and break new grounds in reimagining insurance,” Tay added.

Technology Excellence Awards 2019

IOT - TELECOMMUNICATIONS

SP Telecom wins Technology Excellence Award for pay-per-use IoT service platform

Their innovative service lowers the barriers of entry to IoT deployment and decreases upfront investment.

hen Oneberry Technologies, a provider of remote surveillance solutions in Singapore, wanted to upgrade their video surveillance cameras with analytics capabilities, they needed to invest in enhanced IP cameras that cost up to four times more than basic IP cameras. SP Telecom, an ST Engineering and SP Group joint venture, was able to provide a solution with IoT as a Service (IoT-a-a-S) . Oneberry Technologies was able to enjoy cost savings and quick deployment by leveraging on the IoT-a-a-S platform and its subscription-based model. There is also no capital cost incurred as they could continue to use their existing cameras. Best of all, they could future proof their business by having the option to include new analytics protocols when needed which would not have been possible even with the more expensive, enhanced IP cameras. A first in Singapore, SP Telecoms’ IoTa-a-S platform provides a cost-effective alternative for businesses that want to leapfrog the competition and go to market faster because customers won’t be starting their IoT deployment from scratch. A robust one-stop IoT partner SP Telecom’s IoT-a-a-S platform is developed to be a single orchestrator to enable IoT deployment, from access coverage and bandwidth to device management and edge computing. The service comes with a dashboard to manage IoT devices, analytics and can be programmed with cyber security to defend against critical vulnerabilities such as tampering, rogue devices and DDoS attacks. Companies will receive assistance with site acquisition and radio planning when installing their IoT gateways, as well as a benefit from the support of an ultra-low latency network with scalable bandwidth and diverse connectivity to a cloud platform. A distinct advantage of SP Telecoms’ IoT-a-a-S solution is their multiedge cloud computing capability. For companies to set this up on their own they

would need to work with third parties to lease space, set up their own edge computing equipment and pull in fibre connectivity to the location. SP Telecom removes all this hassle with their access to pervasive hubs around the nation that come with truly diverse network connectivity to enable edge computing for low latency data processing, especially for video analytics, closer to industries, events and people. Current subscriptions start as low as $2 per month per connected device, with no data caps for devices, proving especially useful when analysing large files like video. The service model also does away with the traditional multi-year contracts, ensuring greater financial and strategic flexibility for companies. Finally, the SP Telecom platform has an open Application Programming Interface (API) that allows users with existing systems to integrate easily. According to Lok Kien Cheong, senior manager at Ascendas-Singbridge, “SP Telecom’s IoT-a-a-S provides a very convenient platform where data are aggregated and managed centrally. Having been on the platform for more than 3 months, I am also pleasantly impressed with the coverage of the LoRaWAN solution and its stability as compared to the SIM-based solutions that I have used in the past.” What’s next for SP Telecom? Companies subscribing to IoT-a-a-S will benefit from SP Telecom’s investment in an alternative, intelligent future network which will be rolled out in 2020. The new Software-Defined Network with Network Functions Virtualization (SDN-NFV) will enable users to have holistic network management that provides greater control, visibility and on-demand services such as scalable bandwidth and cyber security for their network. Leveraging artificial intelligence, it can predict and prevent network congestion and will come

in-built with cyber security capabilities for greater network resiliency and secured IoT device performance. Customers can look forward to endto-end network services automation for an improved experience with real-time quotations, provisioning of network services within minutes and a central dashboard to view, manage and optimize their network operations.

Singapore Business Review celebrates SP Telecom as a leader in innovative solutions for IoT “We want to recognise businesses that are bringing uniqueness and innovation to create effective solutions that make an impact. As the only digital services provider in Singapore that can string together so many services to smoothen IoT deployment under one platform, all while offering the service on a pay as you use model, SP Telecom is pioneering a new age for IoT technologies by lowering the barriers to entry. It is a well-deserved win and we look forward to seeing how they will be taking this further with their intelligent future network in 2020,” said Tim Charlton, editor in chief at Singapore Business Review. To find out more about SP Telecom’s IoT-a-a-S platform, visit www.sptel.com/iot-a-a-s/. For more on their intelligent future network, visit www.sptel.com/futurenetwork/.

CONTACT

Company Name : SP Telecom Address : 3 Ang Mo Kio Electronics Park Road, #03-02 Singapore 567714 Email: enquiry@sptel.com Phone number : (65) 6602 8228 Website : http://www.sptel.com/

“A distinct advantage of SP Telecoms’ IoT-a-a-S solution is their multi-edge cloud computing capability.” SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

Technology Excellence Awards 2019

DIGITAL - LIFE INSURANCE

Great Eastern ushers new age of insurance with innovative technology and customer experience

Its new digital platform equips its representatives with a knowledge tool and a 24/7 chatbot for queries.

ith the onset of digital technology and a current demand and growing trend for experiential marketing, insurance companies need to keep up with the times and work towards building more engaging relationships with their customers. Boasting innovative customer experience, Great Eastern is changing the game by challenging customers’ perspective on insurance and redesigning the customers’ financial journey. In the first half of 2019, Great Eastern rolled out its Great Digital Advantage (GDA), a platform that is composed of a suite of mobile applications, a micro learning tool and an efficient chatbot named GERICA. For the customers Providing insurance to over a million people for over a century, the company’s primary focus remains promoting customers’ financial security and well-being. This inspired them to create GreatAdvice, a mobile application that helps customers identify financial gaps and seamlessly implement insurance solutions. GreatAdvice turns complex calculations into simpler ones, thanks to its built-in algorithms. To boost engagement, customers are able to co-create a financial plan with a Life

Storyboard, allowing them to envision their financial future by simulating various life events together with their impact towards the customers’ financial cash flow. This move sparks a deeper discussion between customers and financial representatives, putting the latter in a better position to give more value-added guidance to the latter. “I found the user interface for GreatAdvice interesting and attractive. This made the advisory process with my financial representative more interactive and engaging,” shared Great Eastern customer Darryl Koh. “We were able to create my Life Storyboard together which enabled me to make more informed decisions to plug the gaps regarding my protection and financial needs,” he added. For financial representatives The GDA also created the GreatPlanner app, which provides financial representatives information at the palm of their hands. With the application, financial representatives can access their sales performance at a glance, allowing them to actively monitor their potential sales and closely track their sales performance. The app has a customisable dashboard showing key activities and critical information

“GDA enables our representatives to transform the way they work and serve our customers into the digital future.”

GDA Overview

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

within the main screen to increase efficiency and boost financial representatives’ professionalism. Meanwhile, financial representatives can use the GreatPortfolio app to build customers’ insurance portfolios by individually consolidating and summarising their existing financial policies for easy viewing. The GreatPorfolio app also allows customers to view a sound summary of their insurance portfolio, which they can update, thus paving way for both parties to note gaps in the insurance coverage. The GDA also challenges the limitations of classroom-based learning for its financial representatives with its micro learning tool. Since financial representatives are often out of the office to meet and interact with their customers, physically attending supplementary trainings has become inconvenient and at times, impossible. The micro learning tool solves this by providing bite-sized learnings at any time and any place. When it comes to inquiries, GDA introduced GERICA, an intelligent chatbot available round-the-clock to respond to queries from financial representatives. Since its launch in January, GDA has been receiving positive feedback from customers and financial representatives alike. The new age of insurance Recently, the company was awarded the Digital Award for life insurance at the Singapore Business Review Technology Excellence Awards. “With our GDA, end-to-end, we now enjoy the distinction of being the most ‘digitised’ insurer,” Great Eastern said in a statement. With GDA, Great Eastern can further advance and lead its satisfied customers and potential clients into the new age of obtaining stability and securing their future. “The interactions between our financial representatives and the customers are amongst the most important touchpoints in our business. We hope to see the GDA digital platform enable our representatives to transform the way they work and serve our customers into the digital future,” Ryan Cheong, managing director of Digital for Business, commented.

Technology Excellence Awards 2019

MOBILE - LIFE INSURANCE

GETGREAT gets Singaporeans back on the wellness track

Version 2.0 has a mood check feature and a 1-minute deep breathing segment for user practice.

ith stress affecting most working Singaporeans based on recent surveys and the World Health Organization officially classifying burnout as a medical diagnosis, fitness apps in Singapore are focusing as much on the emotional wellness of working professionals as much as their physical fitness. GETGREAT, for example, has been offering a more structured programme to guide users in their wellness journeys. They can enrol to a 7-day programme which consists of six different components, including steps and five different stretching exercises. “GETGREAT has taken on a more holistic approach to include not only steps and fitness goals but also activities to reduce stress, relieve tension and promote overall well-being,” said Clement Lim, Senior Vice President, Digital for Business, Great Eastern. The push for wellness has been gathering momentum amidst a greater recognition of the work-related stress across the island and in modern life. According to the 2019 Cigna 360 Well-Being Survey released in March,

90% of working Singaporeans say they feel stressed, which is higher than the global average of 84%. The same percentage agreed that stress had a significant impact on the workplace, such as employee attrition. Meanwhile, the World Health Organization updated its handbook, a reference tome for medical practitioners when diagnosing diseases, to include burnout as a problem related to employment or unemployment. The WHO said symptoms of burnout include feelings of exhaustion and negativism related to one’s job. Recognising the need for stress reduction, the newest version of the GETGREAT app has a mood check feature and a 1-minute deep breathing segment that users can practice at any time of the day. The company said this feature is great for users looking for a quick emotional pick-me-up when they feel overwhelmed. GETGREAT version 2 was released in May 2019 and has recorded nearly 14,000 registered users within 2 weeks, an update to the first version launched in April 2018. GETGREAT version 2 rose to rank 1 in both mobile app stores. The company said the app is attracting its intended target audience: the 20s and 30s cohorts. The app’s digital approach is designed to appeal to the younger set of working

Singaporeans. To further assist users achieve their fitness and wellness targets, the app provides recommendations on the types of fitness activities that may be better suited for the user based on the user’s vitals and other information it gathers. This is delivered through a digital personality it created - GERI, the fitness e-buddy. Gamification is also a key component to the app’s efforts to motivate users. Fitness efforts are tracked with a gamification element where experience points, or XP, are awarded for completing certain activities or milestones. Experience points or XP can be used to redeem rewards in the related but separate UPGREAT loyalty platform, in the form of e-vouchers. “The app was built with the objective to reward customers and the community to live healthier and better,” said Clement. The app also partnered with True Fitness, apparel brand Calvin Klein Performance, tech giant Samsung and beverage maker Boost Juice. For its social component, GETGREAT enables users to form social groups to participate in wellness challenges with the idea that they can motivate one another reach their goals. The company said it is planning to roll out more functionalities in the future to make it a day-to-day app for users, but did not provide more details.

“GETGREAT was built with the objective to reward customers and the community to live healthier and better.”

FEEL GOOD. LOOK GREAT. LIVE BETTER . Get going. Stay on track on your GETGREAT journey with Great Eastern’s wellness platform.

Go GETGREAT Now The Great Eastern Life Assurance Company Limited (Reg. No. 1908 00011G), 1 Pickering Street, #01-01 Great Eastern Centre, Singapore 048659 The Great Eastern Life Assurance Company Limited (Reg. No. 1908 00011G), 1 Pickering Street, #01-01 Great Eastern Centre, Singapore 048659

GETGREAT version 2 includes fitness, steps and activities to reduce stress and tension.

Level up, get your friends, form your groups, and earn XP and STARS in the new GETGREAT.

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

EVENT COVERAGE: ITF 2019

Safety and infrastructure should be prioritised as governments adopt autonomous vehicles.

Germany, South Korea rev up autonomous vehicle adoption

Their key projects include an intelligent transport system and test beds.

he rise of autonomous vehicles (AV) is expected to eliminate the risk of human errors in vehicles, which has caused 94% of vehicular accidents, according to the US secretary of transport Elaine Chao. At the opening plenary of the International Transport Forum (ITF) held in Leipzig, Germany, she said that the promise of an automated vehicle system is being driven by two constituent markets: the elderly and persons with disabilities. “AVs can return freedom to these groups and give them back their mobility.” As a consequence, the US is prioritising safety and infrastructure, providing ample opportunities for the private sector to grow in the industry, and is encouraging countries to do the same. Germany and South Korea, with some of the world’s leading transport systems, also discussed their initiatives to hasten the adoption of AVs whilst ensuring safety and improved mobility. The city of Hamburg in Germany laid out the Intelligent Transport System (ITS) Strategy, a framework for transport that will serve as preparation for the ITS World Congress in 2021, in which it will be the host city. A key project is an 56

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

The promise of an automated vehicle system is being driven by two constituent markets: the elderly and persons with disabilities.

inner city test track spanning nine kilometres that is being funded by the Federal Ministry of Transport and Digital Infrastructure. Hamburg’s transport framework Other projects include The Volkswagen Group Research’s fleet of five e-Golf units, equipped with laser scanners, cameras, ultrasonic sensors and radars, which are driving along a three-kilometre section of the test track. The research group is testing autonomous driving to Level 4 or High Automation, which requires minimal attention for safety, under certain conditions and at a real driving condition. Hamburg is also looking to embrace autonomous vehicles in their public transport by 2021 with the launch of the Hamburg Electric Autonomous Transportation (HEAT) in 2019 that will create a circle route for a public transport e-mini bus with a maximum speed of 50 kilometres per hour. It is being funded by the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Additionally, Hamburg also unveiled a driverless new underground train line, Line 5, which

will run through the city centre and connect densely populated districts with over 150,000 people. Line 5, running from Bramfeld to City-Nord, is expected to span 5.8 kilometres. However, as Hamburg builds more transport infrastructure, more ethical questions arise over a fully driverless transport scheme, including who will be to blame in the case of an accident as vehicles come across a wide range of external factors such as snow and rain, said Dr. Britta Oehlrich, head of business development from Hamburger Hochbahn, the operator of mass transport systems including trains and a large part of the bus systems in the city. “To this day, the topic has sparked discussion from lawyers and psychologists.” South Korea’s K City This year’s ITF President, South Korea, also showcased its effort toward the development of AVs in a test bed area called K City located in Gyeonggi, which is an hour away from Seoul. Features include school zones with children’s crossings that send signals to cars and automatically limits speed to 30 kilometres per hour as a road safety precaution as well as roads that are ‘under construction’ which can signal AVs to reroute. “By 2020, we want to make the environment Level Three in automation,” representatives from the Korea Transport Safety Authority (KTSA) said. Level 3 automation allows the driver to take their hands off the steering wheel when manoeuvring the car. K-City’s data sharing centre for automated vehicle and weather environment facility are also targeting to reach Level Four of the autonomous technology. KTSA is collaborating with Singapore’s Centre of Excellence for Testing & Research of AVs - NTU (CETRAN), a government-led initiative focused on the development of testing requirements for selfdriving vehicles in the 1.8-hectare CETRAN Test Circuit at CleanTech, Singapore’s first eco-business park. Luz Wendy Noble attended the International Transport Forum (ITF) 2019. The event was held on 22-24 May at Leipzig, Germany under the Korea Presidency.

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