Singapore Business Review (June-July 2016) by Charlton Media Group

Issue No. 71

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the art issue

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Asiaâ&#x20AC;&#x2122;s art paradox Asian deals exceeded US$500m despite dampened art market

Why are so many SGX firms privatising? Private hospitals sick as med tourism tumbles How Paktor and Deliveroo are succeeding in Singapore startups rake in millions as vc deals surge

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

rankings Top MBA providers and programmes

FROM THE EDITOR About Us

We are proud to bring you our annual Art Report, where we discovered that demand from deep-pocketed Asian collectors was undented by recent global economic volatility. In fact, data show that although global art sales have tumbled, the number of Asian buyers continued to increase, in tandem with an uptick in spending. We talked to industry players and found that demand from Asian buyers was still robust in art fairs held early in 2016.

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The Singapore Business Review is the highest circulating and best read business magazine in Singapore. Our online readership is an average of 215,000 unique viewers according to Google Analytics. 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 production editor Marianne Estioco art director Bryan Barrameda

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Meanwhile, we also looked into the venture capital scene in Singapore and saw that startups in the city-state continue to draw strong investor interest. Our channel checks show that Singapore will likely escape the global drop in venture capital deals, as investors are attracted by the growing focus of local startups to expand in the lucrative Southeast Asian region. In this issue, we also investigated the surprising rise in luxury home sales and explored whether or not contactless payment will continue to gain traction in Singapore. We also bring you the city’s most outstanding solution providers in the inaugural Business Case Studies Awards—start flipping through the pages to discover what makes their innovative business solutions a cut above the rest. Enjoy the issue!

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SINGAPORE BUSINESS REVIEW | JULY 2016 1

CONTENTS

COVER STORY Art dealers find safe haven in robust asian demand

FIRST

financial insight bright future ahead for Venture capital

ANALYST CALL ARE GENTING’S TROUBLES FINALLY OVER?

CASE STUDIES

REGULAR

08 Luxury home sales sizzle

22 Financial Insight

32 SMEs meet the cloud

09 Solar SMEs face funding woes

26 Sector Report

34 Transforming retail logistics

10 No one’s buying savings bonds 12 Privatisations on the rise

RANKINGS

14 Regulators zoom in on

40 Top MBA providers and

crowdfunding

programmes

36 Bringing pre-schools to the workplace

38 The future of driving, today

16 Top entrepreneurs under 40

Published Bi-monthly on the Second week of the Month by Charlton Media Group 101 Cecil St. #17-09 Tong Eng Building 2 Singapore SINGAPORE BUSINESS REVIEW | JULY 2016 069533

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News from sbr.com.sg Daily news from Singapore most read

economy

Economy under threat from high leverage, rising redundancies: IMF The International Monetary Fund warned that external economic risks might be magnified by domestic vulnerabilities stemming from elevated leverage levels. GDP growth is expected to slow further to 1.8% this year as the full impact of the slowdown in global trade and capital outflows experienced in 2015 are felt and private investment is held back by the uncertainties on the horizon.

HR & EDUCATION

commercial property

Here’s solid proof that Singapore is a better workplace than Hong Kong If you’re one of the countless Singaporeans who stay long hours in the office and even bring work home, then you might want to take some comfort in the fact that Singapore is still better in terms of work-life balance compared to its regional rival, Hong Kong. The Compass Index shows that 8% of Hong Kongers work more than 11 hours, compared to 6% for Singaporeans.

More industrial properties sitting empty as large manufacturers exit The number of vacant industrial properties is expected to rise in coming quarters as more multinational manufacturers relocate or consolidate their operations in a single location, according to a report by CBRE. Among the manufacturers which have chosen to shut down operations in Singapore over the past year are Teijin, Tate & Lyle and KTL Global.

What is the future of Singapore’s shipping and offshore sectors? BY JUNE HO It is very easy to predict the end of the world. Given a stage and a microphone, there are and will continue to be plenty of headlines predicting the demise of Singapore shipping and offshore (SO). While the future might not be quite what we thought, in many ways the Singapore maritime sector is in a far better position to advance and adapt than it is, generally, being given credit for.

Growing beyond national borders in a challenging economy BY JEETU MAHTANI Singapore businesses simply can’t afford to keep their sights solely focused on the local market. Luckily, the answer resides close to home. With 60 percent of millennials slated to reside in Asia by 2020, Asia Pacific (APAC) is lying in wait for a surge in growth. We’ve put together what Singapore organisations can keep top-of-mind as they plan for growth in APAC and beyond.

MOST READ COMMENTARY Will Manulife’s $470 million IPO turn the tide? BY ISTVAN LOH Manulife, Canada’s biggest life insurer, is making its second foray into the Singapore stock exchange. This is the biggest offering by far in recent times. In November, BHG Retail REIT raised US$194 million, a substantially smaller sum. The success of Manulife’s IPO may serve to revitalise the Singapore stock market and give it a much-needed boost. Investors will be keeping a close watch on the performance of the trust.

The cities of Asia are increasingly defined by iconic architecture. From stadiums that mark a nation’s initiation onto the world stage to statuesque financial towers, we design and engineer drainage solutions that blend with these bold visions. It’s more than work. It’s an art form that we have mastered.

Fast Flow Singapore Pte Ltd No.1 Fifth Avenue, #04-04/05 Guthrie House, Singapore 268802 www.fastflowgroup.com

Fast Flow Malaysia Sdn Bhd 16, Jalan 15/22 Taman Perindustrian Tiong Nam, 40200 Shah Alam, Selangor, Malaysia

Fast Flow (Thailand) Co. Ltd Nutri Building, 3rd Floor, 46 Soi Pattanakarn, 20 Suan Luang, Bangkok Thailand 10250

1. Singapore Sports Hub | 2. Sky Habitat | 3. Connexion | 4. CapitaGreen (photo by CapitaLand)

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FIRST form of rental demand in the form of medical tourists who need to stay in Singapore for an extended period of time,” he adds. Alice Tan, director and head of consultancy & research at Knight Frank Singapore, notes that the recovery of high-end home prices indicates higher interest for the luxury segment as bargain opportunities increase. “The price recovery is mainly supported by a return in interest for high-end properties given the rising value proposition with lower prices compared to three years ago and the enduring location attributes of CCR with strong transport connectivity, proximity to renowned schools and a wide range of amenities,” Tan says.

Wanted: Women

Singapore trails behind less developed Asian nations when it comes to boosting diversity in the boardroom. A report by advisory firm Korn Ferry and the National University of Singapore showed that Singapore is among the region’s bottom three when it comes to gender diversity, with women making up only 7.7% of board members among SGXlisted firms. Japan and South Korea are also at the bottom of the rankings at 2.6% and 3.3%, respectively. Regionally, women make up 10.2% of all directors, an improvement from 9.4% in 2013 and 8.0% in 2012. The lack of women in boardrooms might be disadvantageous for local firms. The study showed that firms with at least 10% of female board members delivered a 14.9% return on equity (ROE) in 2014, compared to just 12.6% for those without. Structured programs are key Meanwhile, a report by EY showed that only 13% of C-suite executives worldwide expect a significant increase to the number of women in leadership roles in the next five years. Only 44% of companies have metrics in place to track women as they move along their career path, while only 18% have structured programs to identify and develop women in their organizations. “There are proven, direct links between a company’s gender diversity and its business performance. Achieving gender diversity is a business imperative. Yet the biggest companies across seven major industries are far from realizing the benefits of gender diversity. Businesses need to put gender parity on the agenda,” says Max Loh, ASEAN and Singapore Managing Partner, EY.

8 SINGAPORE BUSINESS REVIEW | JULY 2016

xxx homes are in demand Trophy

Luxury home sales sizzle as investors flock back

he long drought in Singapore’s prime property market is finally drawing to a close. Deep-pocketed investors are again on the prowl for relatively cheap luxury homes in the city state, where prime home prices have softened by about 9% since 2013. Integrated development Cairnhill Nine is the current poster child of the segment’s nascent recovery. The project off Orchard Road sold 66% of its units within a month of its launch in March, with buyers snapping up 177 condominiums at an average price of $2,441 per square feet. Since then, it has sold over 80% of its total units. As a result of its strong sales, home prices in the Core Central Region rose by 0.3% in the first quarter, snapping nine consecutive quarters of consistent price declines. Bargains emerge “At Cairnhill Nine, prices for a one-bedder started from $1.35m. For buyers, this presents a fantastic opportunity to own a trophy Orchard Road property,” says Eugene Lim, Key Executive Officer of ERA Realty. “Buyers tend to be investors who are looking to rent out their property. [It] is located within a short walking distance to Mount Elizabeth Hospital, which would provide some

Marketing efforts have been stepped up, including bringing projects to overseas buyers.

Prices reach equilibrium The slight uptick in prices indicates that prime home prices have finally reached an equilibrium, especially after the government reiterated its stance that it will not ease cooling measures in the near future. “The increase in the price index for CCR could be a precursor to stability. Interest in prime market homes has increased and marketing efforts have been stepped up, including bringing projects to overseas buyers,” says Tay Huey Ying, head of research at JLL. However, the slight price growth in the first quarter does not mean that luxury home costs and sales will be on a continued upward path in coming months. “Amidst the prevailing economic uncertainties and muted market sentiment, prospective investors are expected to remain cautious while maintaining their interest to secure high-end homes,” says Tan.

Future supply in core central region

Source: URA, CBRE Research

FIRST Solar deployment by type

Source: National Solar Repository of Singapore

The future’s not so sunny

Solar SMEs hit by funding woes

hen Sun Electric approaches bankers for loans, the solar energy generation company has to come equipped with a detailed explanation about its business model. The company, which connects rooftop owners with clean energy customers, could face higher financing costs compared to traditional energy players because banks are often unfamiliar with smaller solar companies, and are less keen to lend to solar PV SMEs. “Our model requires explanation and understanding on the part of the financial institutions. In

addition, there is a relatively low supply of capital toward new innovations which are riskier but of higher return,” explains Matthew Peloso, CEO of Sun Electric. Jacqueline Tao, Energy Analyst at the Energy Studies Institute (ESI), says that conventional power generation players have a debt-toequity ratio of 50/50, much lower compared with 70/30 for solar PV SMEs. Meanwhile, the cost of equity for traditional players is just 6%, while that for SMEs ranges from 9% to 15%. Banks also charge an interest rate of 4% for conventional players with a credit rating of Baa,

There is a relatively low supply of capital toward new innovations which are riskier but of higher return.

but SMEs need to grapple with interest rates as high as 5.6%. Larger firms can also tap bond markets, which are off-limits to solar PV SMEs due to size restrictions. Camillus Yang, vice president, corporate development and finance at Sunseap, a local solar energy provider, notes that there is a need for a more sustainable financial ecosystem for solar SMEs. “The main challenge for solar financing is the familiarity of some financial institutions to the solar PV renewable business model and with that unfamiliarity tends to heighten the risk aversion and less competitive financing terms,” he says. “What we see is that solar players are at a financial disadvantage. They have to compete around the same tariff, but their cost of funding is so much higher. There has to be some way to reduce the financing costs,” Tao says.

The Chartist: Banks can’t shake off O&G default fears Singapore’s largest lenders cannot escape the threat posed by their oil and gas loans even if commodity prices recover, analysts warn. A report by Morgan Stanley notes that Singapore banks are disproportionately exposed to energy loans. DBS, OCBC and UOB are amongst the world’s most exposed to the embattled sector, with O&G loans making up over 5% of the banks’ loan books. “Fears over the risks from oil and gas defaults have eased somewhat as the price of crude has risen; however, given the nature of Singapore bank exposures to the support services sector, we believe risks remain. . After all, one of the reasons crude prices have risen is an expected drop in supply – this will continue to affect support services, in our view,” the report states.

Banks maintain large exposures to oil and gas commodity borrowers

Singapore banks and oil prices

Source: Moody’s

Source: Datastream, Morgan Stanley Research

SINGAPORE BUSINESS REVIEW | JULY 2016 9

FIRST

No one’s buying savings bonds

Survey

Surveyors get scared

hen Singapore Savings Bonds (SSBs) were first launched in 2015, the bonds received great acclaim from analysts and enjoyed robust interest from investors. Fast forward to June 2016, however, and demand appears to have simply fizzled out. The Monetary Authority of Singapore (MAS) received only $22.3 million in applications for the SSB issue in June, a measly sum compared to the $300 million maximum amount on offer. This is also a far cry from the strong investor demand seen for the maiden issue in September last year, for which the central bank received $413.1 million in applications. Maybank Kim Eng analyst Ng Li Hiang notes that the weak appetite for savings bonds is due to sinking bond yields for Singapore Government Securities (SGS), coupled with competitive fixed deposit rates offered by local banks. “Rates for SSBs are determined by the average SGS yields. Yields have been coming down for the past five issuances, thereby making SSBs unappealing,” Ng notes. She adds that savings bonds may be unappealing to individuals who are only looking to make short-term deposits. “SSBs are positioned as

Fixed deposits are more appealing

safe and long-term saving products for individuals. Early withdrawal will result in lower rates compared to banks’ promotional rates for FDs. As a result, individuals opt for FDs instead,” she notes. UOB analyst Victor Yong echoes this sentiment. “Yield sensitive investors will likely forgo the SSBs’ redemption flexibility in favour of higher-paying fixed deposit promotional rates, particularly if their investment horizon is shorter than 10 years,” he states. SSBs have a maximum tenure of 10 years and a yield that steps up to match starting SGS every year.

Yields have been coming down for the past five issuances, thereby making SSBs unappealing.

Mobile App Watch

get4x lets you find the cheapest forex rates in real-time Being unable to find the cheapest exchange rates in a foreign country was one of Julien Labruyere’s biggest frustrations as a frequent business traveller. The French entrepreneur was well aware that buying money at airports could end up costing 15-20% more compared to buying cash at licensed money changers. This drove him to develop get4x, a locationbased exchange rate aggregator that allows users to compare the best rates offered by licensed money changers. “get4x is unique as it provides live ‘retail’ rates from money changers directly, instead of the mid-market rates used by banks. It fills a much needed market gap by seeking to bring transparency to the foreign currency exchange market,” Labruyere said. The app has also seen a major redesign, moving away from merely listing money changers to pinpointing their locations and offered exchange rates on city maps. 10 SINGAPORE BUSINESS REVIEW | JULY 2016

A sharp decline in occupier demand has taken its toll on commercial property investment activity in Singapore, as foreign buyers increasingly look beyond the city-state for better returns. Investment enquiries from potential foreign buyers of commercial properties fell for the third consecutive quarter in Q1, according to data compiled by the Royal Institution of Chartered Surveyors (RICS). The report showed that tenant demand for commercial property has fallen at its fastest pace in Q1 2016 since the depths of the financial crisis in 2009. The majority or 65% of respondents expect the downward trend to continue into next year. Respondents expect rental values to fall by 5.8% over the next 12 months. Landlords get crafty In response to a sharp decline in demand, landlords have increased rent-free periods to incentivize tenants. Meanwhile, developers are putting the brakes on development projects, particularly for retail and industrial properties. In the office sector, only 20% of respondents reported an increase in project starts. “The softening Singapore commercial market reflects, in part, some of the ongoing macroeconomic challenges facing the country and the wider region. In the immediate future, property professionals remain pessimistic about the market rebounding. Ongoing cooling measures, compounded with rising interest rates, suggest that improvements, if any, are likely to be both slow and small,” said RICS ASEAN Director Dexter See.

SINGAPORE BUSINESS REVIEW | JULY 2016 11

FIRST

Tumbling valuations force more firms to bid SGX goodbye

everal companies—including homegrown names like OSIM and Eu Yan Sang—have made a beeline for privatisation in recent months, sparking concern that Singapore is losing its edge as a regional listing hub. Experts say that low valuations and high listing costs may have prompted the wave of delistings in the local bourse, but note that the market’s long-term fundamentals remain intact despite current sluggish conditions. “There are various factors to take into consideration when a company considers privatisation. Companies that seek to privatise generally face illiquidity and compliance costs associated with maintaining a listing,” says Pong Chen Yih, Principal, Baker & McKenzie.Wong & Leow. Pong adds that being subject to listing rules also restricts a company’s ability to execute deals and clinch funding for corporate actions, which may weigh against the benefits of staying publicly listed. Perfect timing “With the current economic environment, prices of certain stocks may be viewed as undervalued, and major stakeholders may feel that it is an appropriate time to privatise based on the above reasons,” Pong adds. Both OSIM and Eu Yan Sang blame

challenging market conditions for their decision to delist. “Considering the low trading liquidity of the shares, the offer provides shareholders with more certainty, through an exit opportunity to realise their investment at a premium,” says Danny Koh of Tower Capital, the consortium behind the privatisation bid for Eu Yan Sang. In a report, OCBC Investment Research noted that unjustifiably low valuations in the local bourse have made certain companies prime targets for opportunistic bargain hunters. “Given how much share prices have declined and how attractive valuations are for certain companies out there, it is not surprising that bargain hunters are once again on the prowl for good deals,” says the report. OCBC’s report shows that of the 700 companies listed on the SGX, 431 are trading below 1.0 times their book value, while 193 companies are trading under 0.5 times their book value. Meanwhile, potential acquirers are buoyed by low capital costs and have extremely strong cash buffers. “Corporates, especially the stronger ones, are generally cashed up or have low net debt to equity ratios as they have been holding back on investments due to the uncertain economic outlook, and a world flush with

OFFICE WATCH

Childcare and co-working merge at Trehaus Singapore’s first co-working space for working parents, equipped with adjoining child-minding and learning facility, recently opened its doors at Orchard Road. “We offer the option of bringing your children to work at a conducive workspace, complete with child-minding assistance and play-based learning activities – so that while you build your career, your little ones can build their minds too,” says Trehaus cofounder Rachel Teo. Trehaus spans a total area of 4000 square feet and is divided into two areas - the workspace and the Kids’ Atelier. The space is also divided into adult only zones and common zones such as the pantry where parents and children co-exist in harmony. Trehaus offers the real flexibility to be near to or even right next to your little ones while you work, Teo says.

12 SINGAPORE BUSINESS REVIEW | JULY 2016

Trehaus Kids’ Atelier

Recent privatisation offers on the SGX Company

Valuation

China Merchants Holdings

$1.8 billion

Tiger Airways*

$1.13 billion

OSIM International

$980 million

Interplex Holdings**

$450 million

Eu Yan Sang International

$269 million

*-completed on May 11, 2016 **-completed on June 8, 2016

liquidity means that they are still able to borrow at low interest rates. Rich individuals, meanwhile, have been bemoaning the lack of investment opportunities, and we see both ready to pounce when valuations are low enough,” OCBC says. However, the flurry of deal activity does not mean that Singapore is losing its attractiveness as a fund-raising destination. “I do not think the situation is unique to the SGX. You also see Chinese companies delisting from the US, largely based on the same reasons as well,” Pong notes.

co-published Corporate profile

Investorist streamlines property investment with an innovative trading platform Investorist banks on efficiency and transparency to revolutionise the way properties are bought and sold worldwide.

Investorist offers unparalleled depth of information

Gain access to over 5,500 professionals

trailblazing property start-up is making waves in markets across the globe. Investorist, the world’s first business-to-business trading platform for off the plan property, is bringing its innovative software to developers and agents in Australia, China, Singapore, Hong Kong, the UK, and the USA. Jon Ellis, who founded Investorist in August 2013, has been working in the property market for over ten years. Having worked on hundreds of property development projects, he continued to encounter the same problem: developers wanted to meet more agents to market their stock, while agents wanted to meet more developers to access more projects. The sector was also bogged down by paperwork and frequent mismatch in terms of schedule and unit availability. “I thought there has to be a better way,” said Ellis. “There was no one central repository of information. With Investorist, businesses looking to buy property investments for their clients just come along and discover everything they need to know in one platform. It’s a bit like Expedia for the property development sector,” he says.

without any extra charges. Members also have the option to take out Investorist’s software products for an additional fee. “There is no other platform where developers can get access to over 5,500 property professionals that are actively seeking new developments to sell to their clients. With Investorist, developers have an enormous untapped resource to sell their projects,” Ellis says. He notes that their members are particularly impressed with the depth of information that Investorist offers. “For all projects, members will be able to download the brochure, the agents’ agreement, the contract of sale, every single floor plan on the development, all of the renders, there’s so much information there. It allows developers to manage their inventory and talk to their agents in a way that they’ve never been able to do before. I think any property professional who understands the value of efficiency and transparency should be using Investorist,” he adds.

Perth. In Asia, its offices are located in Singapore, Beijing, Shanghai, and Guangzhou. It also has an office in the UK. In April 2016, it opened a branch in Miami, its first office in the United States. In terms of expanding its services, Ellis shares that the company is looking to widen its operations in Singapore, from which the company plans to extend its reach in Southeast Asia. Since it opened its Singapore office last year, investor response has been incredibly robust, and the company intends to boost its local headcount to cater to strong demand.` Interestingly, Ellis shares that their Singapore operations have not been impacted by the city-state’s stringent cooling measures. “Our business model does well in both rising and falling markets. When a market is cooling, then developers and agents are always looking for more opportunities, and we provide a world of opportunities for property professionals. We really thrive in a cooling market. When a market is taking off again, we also do very well because we’ve Boosting its Singapore presence got our inventory management tools, and Investorist has enjoyed immense success we open up many other opportunities for since it was first launched. Among agents and developers,” he says. Investorist’s notable clients are major Ellis adds that Investorist views its international project marketing brands The foundation of success Singapore members as hugely important As the first platform of its kind, Ellis shares such as Knight Frank and JLL. Some of the to the company’s future growth. world’s largest developers and property that a key factor behind Investorist’s “Singaproeans have had a wonderful agencies also use Investorist’s platform. success is its policy of transparency history of outbound investment, they’re Investorist now has central offices and its dedication to always putting its great investors into property in Australia, members first. Investorist does not charge in all major Australian cities, including in the UK; they’re one of the top markets a commission for successful transactions; Melbourne, Sydney, Brisbane, and for outbound investment,” he says. instead, it charges members an upfront “With Investorist, developers have an enormous fee and simply facilitates transactions untapped resource to sell their projects.” between developers and members SINGAPORE BUSINESS REVIEW | JULY 2016 13

FIRST NUMBERS

sustainable investing rises Sustainable I

sustainability is one of the fastest-growing investment areas in the world SUSTAINABILITY IS ONE OF THE F

US$21.4 TRILLION

Sustainable

US$13.3

Sustainable Investing Is G

SUSTAINABILITY IS ONE OF THE %

61 THE growth in Investors are u SUSTAINABILITY IS ONE OF FASTEST GROWING I sustainable investments to make dec

US$21.4 TRILLION

Fintech firms are being watched

US$21.4 TRILLION

from 2012 to 2014

and manage

Sustainable Investing Is Regulators zoom in on crowdfunding US$13.3 US$13.3

new kind of crowdfunding is on the rise in Singapore. Unlike purely debt-based or donation-based platforms which can operate without regulatory supervision, equitybased crowdfunding platforms require a Capital Markets Service (CMS) licence before they can commence operations. For Leo Shimada, CEO and founder of of the provisionally-licensed equity and debt crowdfunding platform Crowdo, increased regulatory supervision helps level the playing field between alternative funding sources and traditional financial institutions. “This pedigree gives businesses and investors alike reassurance that we are operating at the highest of professional standards. I believe the whole crowdfunding scene is long overdue for a professional upgrade,” Shimada says. Mitigating risks Michael Tee, CEO of the country’s first fully-licensed equity and debt crowdfunding platform FundedHere, notes that regulatory supervision helps mitigate the inherent risks in crowdfunding. “There will always be an element of risk in crowdfunding. Having said that, this can be mitigated by effective oversight on the

part of regulators and licensed crowdfunding operators,” he says. Under FundedHere’s model, only accredited investors (AIs) can buy equity from a shortlisted pool of startups. Tee shares that over 200 startups submitted pitches to the platform, but only four were selected for the first crowdfunding campaign. Over a dozen individual AIs participated in the maiden round, with venture capitalist fund, Midana Capital, leading as anchor investor in two of the campaigns. As a result of increased regulation, Yamada says that many smaller operators are likely to close down or merge with bigger players. “I think there will be rapid professionalisation and consolidation within the industry. Many grey or amateur operators will fall through the cracks,” he says.

and PR SUSTAINABILITY IS ONE OF THECSR FASTEST GROWIN

99%

MORE COMPANIES ARE LOOKING AT INTEGRATING SUSTAINABLE INVESTMENTS ARE MOST POPULAR IN

SUSTAINABLE INVESTMENTS IncreasingAR government CSR and PR Sustainable Investing Is Gaining Global Momentum beneﬁts SUSTAINABILITY IS ONE OF THE FASTEST GROWING INVESTMENT AREAS IN THE WORLD US$21.4 TRILLION

Chloros Solutions, FTMS Global and two other startups

$1,000,000

The Parenthood

$900,000

US$12.9

%32

ESG

increase in Asia’s

sustainable investme of% global sustainable assets87assets from 2012 to investment 61 30.2 are from US, Canada MORE COMPANIES ARE LOOKING AT INTEGRATING SUSTAINABILITY INTO THEIR PRACTICES and Europe

US$13.3

Notable equity crowdfunding deals Funds raised

Accounts for 3

Investors are using it % 61 growth in to make decisions

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14 SINGAPORE BUSINESS REVIEW | JULY 2016

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co-published Corporate profile

The EASB East Asia Institute of Management: On the go, the way to go

An EASB education is the perfect fit for postgrad-seeking professionals.

Eric Lim, Director, EASB School of Postgraduate Studies

ith schedules and everyday lives getting more jam-packed, professionals nowadays are searching for the essential yet flexible MBA programmes. East Asia Institute of Management (EASB) offers just that with the MBA programme awarded by Edinburgh Business School(EBS), Heriot Watt University.“EBS programmes are portable, flexible, and caters to the lifestyle of busy professionals as well as aspiring full-time students,” says Eric Lim, Director of the EASB School for Postgraduate Studies. “Programmes can be ‘classroom on-the-go.’” As flexible as they are, EBS programmes still provide the same top calibre education traditional institutions do. The school makes use of the CESIM Business Management Simulation, an online platform that reconstructs and reflects real-world challenges and results with accuracy, in order to help students test their classroom knowledge and practically apply their skills in managing corporations. “While undertaking a Master’s programme with Edinburgh Business School, students are acquainted with knowledge on the business environment and the influences that shape the industries. We provide a wide coverage of key management disciplines, such

as people skills, economics, marketing, accounting and more,” says Lim. Classes are taught by qualified lecturers from the industry, and the programme content is regularly reviewed by industry practitioners to ensure that students can keep up with current business trends and relevant issues. An Approved Learning Partner of Edinburgh Business School, Heriot-Watt University, where 40% of Fortune 500 companies have students take their Masters in Business Administration, EASB also provides the Masters programme through EBS in the Chinese Language too, to help cater to a wider range of prospective students. More than textbook knowledge, the EBS programme provides students with avenues for making connections and expanding their networks. The school’s diverse mix of international students from Denmark, Switzerland, Mongolia, Chile, UK, New Zealand, China, Vietnam, India, Indonesia, Myanmar, Malaysia and Singapore, is perfect for acquiring and establishing important global business connections.

“EASB programmes are flexible, and able to cater to the lifestyle of busy professionals.”

Several student successes are proof of this. One student, Pamela Ardana, leveraged her vast network to expand her business, No Faux Official, a bag retail company. In just six months, the company already has appointed retail representatives in China, Thailand, Hong Kong and Indonesia, and she will be looking to expand the business into the Middle East, to countries such as the United Arab Emirates and Kuwait. Miss Ardana credited the lecturers and her fellow school mates for sharing their knowledge and experiences with her, which turned out to be helpful information when she kick started her business. “We have another student from China, Guo Saiwei who has teamed up with fellow classmates to establish a Chinese ‘Groupon’ equivalent portal called http:// huayutuan.com/,” recounts Mr. Eric Lim. “Saiwei has also started his unique mineral water business, ‘Bello,’ and has leveraged on the knowledge he gained from the programme and his network of his Indonesian and Malaysian classmates to venture into the Indonesia and Malaysia market,” he adds. The EBS MBA programme, is also available in a few specialisms, including Strategic Planning, Human Resource Management, Marketing and Finance. For more information, visit www.easb.edu.sg or email enquiries@easb.edu.sg.

"The MBA Programme awarded by Edinburgh Business School prepares students for a professional and business life. It hones critical thinking skills and entrepreneurship to help students excel at a managerial level." Pamela Orlanda Ardana

, student of MBA, Edinburgh Business School (Heriot-Watt University, UK) Owner of No Faux Official Pte Ltd and Luwak Coffee Global Pte Ltd

SINGAPORE BUSINESS REVIEW | JULY 2016 15

FIRST Brad is also a mentor to start-ups throughout the region.

Singapore’s top entrepreneurs to watch aged 40 and under

hese six young leaders who made the cut in Singapore Business Review’s inaugural list of outstanding entrepreneurs aged 40 and under can serve as fine examples for entrepreneurs striving to make it big in Singapore. The members of this year’s list demonstrate a strong entrepreneurial spirit and exemplify innovation in their respective fields. They also boast a sound financial track record. They are arranged from youngest to oldest. 1 Justin Fulcher, 24 Justin founded RingMD when he was 20. RingMD is a Singapore-based telemedicine start-up that connects patients and medical professionals for online video consultations. It started operations in 2011. RingMD was built to bring access to quality and affordable healthcare to everyone. The company is now present in over 10 countries and is about to announce a seven-figure pre-series A funding round. Ring.MD connects patients to doctors whether local or across borders. Through the use of cutting¬edge technology, RingMD provides patients with instant access to a global community of the world’s leading physicians. The system avoids the shortcomings and delays of the current health system and instead provides an efficient, interactive experience designed

16 SINGAPORE BUSINESS REVIEW | JULY 2016

to please doctors and patients alike. 2 Arthur Brejon, 31 Arthur is the co-founder and chief operating officer (COO) of Lazada Singapore, roles which he assumed in March 2014. As co-founder, he is the driving force for Lazada Singapore’s business and is responsible for the platform’s overall operations, which include supply chain and logistics, product management and customer service. He is also a tech and entrepreneurship enthusiast who likes helping startups during his free time. Prior to joining Rocket Internet and Lazada, Arthur began his career at BNP Paribas’s Investment Banking division working closely with corporate, institutional and hedge funds clients in the capital markets division. Arthur graduated with a Master’s degree in Banking & Finance from the University of Paris Dauphine and holds an MBA from the University of Pantheon-Assas in Paris. 3 Brad Robinson, 36 Brad has been based in Singapore for eight years now. Originally from Oklahoma, Brad spent the bulk of his career operating in the security and surveillance field. Now, driven by his passion for health and fitness, Brad has developed the awardwinning Ritual Gym brand, which is now one of the most recognisable and trusted names in the fitness industry.

4 Paul Tenney, 36 Paul Tenney founded Ematic Solutions in order to address the fundamental challenges associated with digital marketing in Southeast Asia, namely access to sophisticated marketing strategies that can be nimbly and inexpensively deployed. After graduating from Stanford University in 2002, he joined one of the premier enterprise e-mail marketing firms in Silicon Valley and started a journey that took him around the globe helping Fortune 500 companies like eBay, Hewlett-Packard and Expedia build world-class, high return-on-investment (ROI) email marketing programmes. He landed in Southeast Asia in 2010 and has made Singapore his long term home, and is now a citizen. 5 Eileen Wee, 38 A brand management and PR veteran from the beauty and entertainment industries, Eileen founded Touch Communications in 2007. The agency, which was rebranded as Touch PR & Events Pte Ltd in 2012, started with less than $100K annual turnover in 2007 and crossed the $1 million sales turnover threshold two years ago. Eileen leads the agency with aplomb and ensures that the umbrella of lifestyle accounts—which includes beauty, fashion, entertainment, travel and food—get the polished treatment every time. 6 Lawrence Koh, 39 Lawrence founded iFly Singapore with the vision of making the experience of skydiving available in a safe, affordable and accessible manner. He has over 1000 skydives and holds two current Guinness world records, but found it hard to share the joy and fun of skydiving as it is a very niche sport. He identified this business opportunity and quit his stable and well-paid job in the Singapore Armed Forces’ parachute training school to start this venture. His comprehensive business plan soon caught investors’ eye, and he managed to raise $25m for iFly Singapore. iFly Singapore is located at Siloso beach at Sentosa and was launched in May 2011. The wind tunnel was the first of its kind and gives anyone the opportunity to fly.

co-published Corporate profile

Securing and extending the digital economy with trust and user experience Digital technologies are redefining a new global economy where digital identity, authentication and authorisation are essential pillars for FIs and governments.

hen an Android-based malware affected a number of Singaporean consumers in 2015, it became painfully obvious that regional banks still have a lot to do to ensure the security of their mobile platforms. Banks need innovative methods to stay ahead of the threats plaguing the new digital economy, says Benjamin Mah, CEO and co-founder of secure mobile solutions specialist V-Key. “The latest cybersecurity attacks are all focused on mobile,” Mah says. “The challenge facing digital banks is twofold: as they develop new services, they also have to develop new security measures that will secure those novel services. Old security frameworks won’t work for a bank in the new digital economy.” Transitioning into the new digital economy Mah notes that currently, mobile banking is jeopardized by outdated technology. Although banks are splurging on app development, most financial institutions still rely on old and fundamentally insecure technologies, such as SMS One-Time-PINs. Even newer technologies, including hardware and the latest versions of Android and iOS, are under threat from sophisticated exploits, which can translate to thousands of dollars’ worth of fraud. To address these security issues, Mah says, banks must realise a strategy for the new digital economy, and there are three areas which they should focus on. These are secure authentication, secure payments, and innovative channels of interfacing with the customer. “Security is a threat to digital banking because a lack of it seriously hinders your ability to develop new features. You might develop a novel channel to handle mobile

payments, but if you can’t secure it, there’s no point – no one will use it. V-Key enables a bank to develop and then execute a strategy for the new digital economy by enabling products and services that were previously not feasible,” Mah states. Bulletproof technology V-Key’s technology relies on a tried-and-tested security system—the smart chip – but with a unique twist. V-Key’s globally-patented V-OS platform incorporates the tamper-resistance of a smart chip, but is built entirely in software and is independent of the underlying hardware. Thus, V-OS is the world’s first virtual secure element. Being a virtual solution, app developers are freed from the security constraints imposed by device manufacturers. The V-OS platform ensures that hackers cannot obtain the secret cryptographic keys inside mobile apps, and is cheaper and more convenient to manage for both IT teams and end-users. This rock-solid foundation that is simultaneously remarkably versatile allows V-Key to enable a number of use cases for the new digital economy that are at great risk of cyberattacks. First, it offers a secure data transmission solution that can be used for encrypted communications. Second, it offers a mobile soft token to replace expensive and inconvenient hardware tokens. Third, it has developed a implementation of MasterCard’s cloud-based payment standard, the first in

Asia-Pacific. Fourth, it offers a number of mobile identity solutions designed to make online payment and authentication more convenient. An example of how V-Key enables a strategy for the new digital economy is UOB’s Mighty app – a secure mobile wallet for all UOB debit and credit card holders. Customers with NFC Android phones can make transactions by tapping their phones against the merchants’ payment terminal and entering a PIN. “V-OS is a platform, and security is an enabler in the same way that you consume electricity without knowing how it works. We are very excited for the future that we envision – a future without SMS OTPs or hardware tokens, without physical credit cards, and where we will have unlimited virtual SIMs on numerous devices powering a multitude of apps that we haven’t even dreamed of,” Mah says. “The old world that is rooted in hardware is passing away. Software is now the new hardware.”

Benjamin Mah has spent more than 15 years in cyber and mobile security, and is a proven entrepreneur who has built a distinguished career managing e-Cop (now owned by Temasek) and Encentuate (acquired by IBM). Previously, he has held senior management positions in IBM, Oracle, and CA Technologies. SINGAPORE BUSINESS REVIEW | JULY 2016 17

startups

FlySpaces revolutionises traditional office leasing

lySpaces is a digital marketplace that provides short-term work and meeting space solutions to entrepreneurs, start-ups, SMEs, and mobile professionals. It caters to all kinds of space needs—whether it’s just for an hour, or a day, a week, or even a few months. The startup was founded by Mario Berta and Guillaume Martin in 2015. Berta was a former executive for Rocket Internet, while Martin is a former management and strategy consultant for a boutique European consulting firm focused on financial services. They founded FlySpaces with the vision of modernising

the process of finding and leasing professional workspaces. By aggregating all options and creating an easy-to-use plug-and-playplatform, it breaks off the usual long-term lease contracts which normally involve a 3-year lock in period, a 3-month down payment and also a 3-month advance payment. FlySpaces addresses the need for short-term contracts with flexibility, choice, convenience and transparency. It holds the largest inventory of spaces, including all amenities and prices up front to empower our customers to find the perfect fit themselves. Through the regular newsletters and blog posting, they have created a userbase of nearly 10,000 members. It has secured $500,000 in Series A seed funding. In less than 6 months, it has served 150 clients and generated a total revenue of $136,000 as of March 2016. The startup will expand its operations to Jakarta starting June and will start operations in Bangkok by August. Furthermore, expansion plans are already set for 2017 in other Southeast Asian countries such as Vietnam and Cambodia, among others.

Introducing the hippest multiscreen conversations

his advertising technology startup clinched funding from angel investors soon after it was launched in 2014. EYWAMEDIA enables broadcasters and advertisers to be engaged in real-time with their audiences. It creates contentad strategy and attribution, cross targeting and retargeting revenues using multiscreen technology. EYWAMEDIA co-founders Ramasubramaniam Raja and Anshuman Chaudhary explain that 18 SINGAPORE BUSINESS REVIEW | JULY 2016

their ‘rich’ IP-driven technology leads the space of making a multiscreen engagement truly limitless. They note that their advanced data science uses machine learning and artificial intelligence to define future content and ad strategies for their clients. “This helps in marrying the actual audience intent with the consumption they wish in their journey across screens,” they say. The startup had managed to penetrate the broadcaster ecosytem and is now growing in the advertiser segment. Chaudhary notes that their business is unique since it ensures social targeting, programmatic targeting and cross-device targeting in a single console. EYWAMEDIA’s line of business is happening across Asia, Middle East, North Africa and shortly moving to Australia, Central-Eastern Europe and the USA, among others.

Fitness meets style & affordability

Naked Wear is an online active wear store which designs and sells athletic clothes for women. Their product line is focused on athletes who do cardio-related sports, aerial, and water sports. The apparels are designed with the aim of highlighting the wearer’s personality while ensuring that they are also functional. Naked Wear embodies four traits – “comfort, style, security, affordability.” Jaemi Leong and Elly Phneah co-founded the sports apparel store to take advantage of the rise of high-cost sports wear sales in Singapore. They both have a strong passion for sports and keeping fit, and both share a passion for bringing the latest active wear trends to consumers. Jaemi and Elly say that fitness is rising in importance among Singaporeans as more people recognize the benefits of having a good work-life balance and the importance of health and wellness. As for women , they say that being extremely skinny is no longer in vogue; rather, being strong is the new sexy. But they also stress that being naked is not about being bare and vulnerable . Rather, it is about being absolutely comfortable with what you are and ultimately who you are. “Today, people no longer look for average fitness clothes that you can wear to the gym, but something versatile and well-fitted. Women especially look for fashionable and stylish garbs which are well affordable and durable,” they note. At present, they are looking forward to their upcoming collection which will feature colourful new, trendy sports bra designs. In addition, they’ve been working hard to develop a wide range of fitness apparels such as leggings, lounge shorts, fitness gloves and even tank tops. Last 2015, Naked Wear collaborated with a local gym to promote awareness about breast cancer. Being a homegrown brand, they intend to contribute back to society through Corporate Social Responsibility (CSR) activities. In the near future, they aim to collaborate with leading brands to offer even better benefits to their clients. They believe that the dynamism and fast growth of the start-up can be complemented by stability of a leading brand name. Naked Wear wants to be recognized as a dominant active wear brand in Asia. They believe that good sports apparel can bring confidence while working out, apart from just providng style and comfort.

co-published Corporate profile

Are Singaporean businesses paying too much for their electricity bills?

This question led the RCMA Group to launch iSwitch and provide more affordable electricity plans in combination with more flexible payment options to businesses.

hen the RCMA Group saw Singapore businesses jumping through hoops to cut down a small fraction of their ballooning electricity bills, their immediate thought was: There has to be an easier way that brings better results. This led the firm to launch iSwitch, an electricity retail business that is licensed by the Energy Market Authority (“EMA”) to offer electricity plans at more attractive prices and more flexible payment options. “While a company can adopt energysaving methods to reduce consumption, there are alternative and more competitive pricing options available in the market to reduce cost more effectively,” says David Maher, Managing Director, iSwitch & Managing Director, Energy at the RCMA Group. Substantial savings, flexible payment Leveraging on its experienced team in energy and electricity retail across the region, the RCMA Group sets up iSwitch with a dedicated team that helps businesses review their electricity bills. The consultation process assists businesses to explore various pricing plans and then choose one that will best suit their needs, often resulting in substantial savings on their electricity costs and a noticeable improvement to their operational overheads. iSwitch has spent significant resources building a solid reputation of not only having more attractive plans relative to incumbent players in Singapore, but also providing flexible and customised solutions to consumers who wish to save more on their electricity costs. “We not only help customers to improve their bottom-line, but understand and add value to their cash flow management by offering flexible payment terms,” says Maher. iSwitch’s experienced advisors focus on finding a plan for customers that fits like a glove. “Customer service is our top priority;

David Maher, Managing Director, iSwitch we train our staff to go the extra mile with the personal touch, and to value and treat our customers as business partners,” says Maher. Reliability assured There is a common misconception that since iSwitch is an electricity retailer with no generating assets, its reliability is lower. But iSwitch points out that this is not the case as physical electricity supply is not determined by assets but managed independently by the SP Power Grid. “When these customers express concerns about the reliability and quality of supply, education becomes critical when reaching out to customers as we help them understand that Singapore’s energy transmission system is highly regulated and wholly operated by the Government. This means that when you switch electricity retailers, there will be no change or compromise to your security of supply,” says Maher. Businesses are assured that there will be minimal hassle when shifting to iSwitch since the account transfer will be handled by the iSwitch team, in the same system that is managed by SP Services. “Customers often think that it is difficult to switch from their existing retailer or hesitate to switch from SP Services. At iSwitch, our dedicated team

“There are alternative and more competitive pricing options available in the market to reduce cost.”

of experts makes the process a simple and hassle-free experience.” Gearing up for change iSwitch is gearing up for a big shift in the Singapore electricity retail market in 2018 when the next stage of contestability occurs, expanding the number of potential customers that can take advantage of its lower rates and more flexible plans to include household owners and small businesses. “Not only commercial and industrial consumers, and large or medium businesses, but also household owners and small businesses will be empowered to sign up electricity plans with any retailer like iSwitch to enjoy greater savings and benefits,” says Maher. “iSwitch has been gearing towards building the team’s expertise in preparation for the influx of potential customers as we strive to always be at the forefront in helping these newly contestable consumers enjoy some of the greatest savings,” he adds. iSwitch is backed by the RCMA Group, a global group headquartered in Singapore with offices in 15 countries. Singapore businesses can email their latest monthly electricity bill to sales@iswitch.com.sg and a dedicated team of iSwitch experts will advise on the best offering that helps maximise electricity cost savings. SINGAPORE BUSINESS REVIEW | JULY 2016 19

FIRST The Analysts’ call

Is Genting out of the woods?

The chips are no longer down

Lady Luck finally smiles on Genting

enting Singapore is tightening the purse strings when it comes to lending cash to high-rolling gamblers. Steep impairments brought about by bad VIP loans were the culprit behind the drastic slide in Genting’s profits in 2015, and analysts argue that the group’s new credit collection strategy may prove to be the long-needed antidote which can reverse its flagging fortunes. UOB Kay Hian analysts Vincent Khoo and Yeoh Bit Kun note that Genting has tightened its credit term since March, from

Genting’s efforts at wooing mass market players are finally bearing fruit. 90 days previously to just 30 days. “This, coupled with a relatively more credit-worthy client profile, points to significantly lower provisions in 2H16, although the company acknowledges that recovery is still ongoing. We reckon that the current level of VIP volumes should incur a quarterly run rate of S$30-40m, once the legacy issues blow over,” they say. Apart from an improved debt profile, analysts also note that Genting’s efforts at wooing mass market players are finally bearing fruit. Resorts World Sentosa reported an 11% quarter-on-quarter increase in earnings for the first three months of the year, raking in $201.2m in revenue on back 20 SINGAPORE BUSINESS REVIEW | JULY 2016

of higher gaming volumes for both VIP and premium mass players. In contrast, Marina Bay Sands’ VIP rolling chip volume slipped during the period. MBS’ VIP gross gaming revenue also contributed less that 40% of its total gaming revenue in the quarter, the first time since MBS commenced operations. “Our mass gaming market segment started 2016 on a better note with strong electronic gaming machines performance. We have seen encouraging progress with the implementation of our new marketing strategies to grow the foreign premium mass market. We continue to grow and enhance RWS’s brand identity targeting Asia’s affluent,” a statement by Genting notes. Yin Shao Yang, equity analyst at Maybank Kim Eng, adds that the growth in Genting’s VIP volume and mass market gaming revenue in the first quarter is promising. Its operations grew although industry-wide VIP volume was flat, while mass market gross gaming revenue inched up at a more marginal pace. “Gaming operations also appear to be stabilising, not just at Genting but at the industry level as well,” Yin says. Apart from its improving local operations, the group’s expansion into Jeju, South Korea is also progressing well. It has started selling some units as the construction of the resort’s residential plot is now at an advanced stage, with sales targeted to reach $1 billion. The whole resort is on track for a soft opening at the end of 2017. However, the group has become less sanguine about its prospective expansion into Japan, due to the poor visibility of the casino legalisation timeline.

RHB Research While we acknowledge that the operating environment remains challenging, we continue to believe that the worst is likely over for Genting Singapore, as its VIP gaming segment is showing signs of stabilising. While its bad debt provision unexpectedly jumped in 1Q16, we anticipate stringent credit controls to translate into fewer impairments going forward. We expect to see improvements in the quality of its books for the rest of the year, owing to the group’s more selective credit offerings and with its credit period shortened to 30 days effective from March. Vincent Khoo and Yeoh Bit Kun— UOB Kay Hian The VIP rolling-chip volume recorded the first time quarter-on-quarter improvement since 2Q14 and 1Q16’s total gross gaming revenue market share of 46% was at its highest since 4Q14. While 1Q16 was unexpectedly hit by high provisions again, we note this is a legacy and non-cash flow related issue. We share management’s confidence in how provisions would fall significantly in 2H16. Genting is eyeing better capital management. Yin Shao Yang—Maybank Kim Eng Although this may come at the expense of VIP volume, we expect doubtful debts to moderate from 3Q16 onwards on tighter credit policies (from 90 days to 30 days repayment terms), boosting core net profit in the process. We also understand that Genting has been organising more lucky draws and tournaments to maintain its mass market gross gaming revenue.

abacus

More flexibility for cabbies

SMRT has launched Strides, a private car hire business that offers limousine services, chauffeured services and car rental services. Strides offers limousine services with luxury vehicles such as the Lexus ES Hybrid and Toyota Vellfire Will Noble’s strategy backfire? for its up-market and corporate clientele. SMRT said that strides will also progressively roll out a fleet of 300 brand new Toyota Altis sedans, to provide chauffeured and car rental It wants to keep financing costs low, but doing so services, over the next six months. compromises its financial flexibility, experts say. In a blow to Uber, Strides also sia’s largest commodity trader immediate pressure on the company’s announced an exclusive one-year liquidity. will grapple with reduced partnership with ride-booking “However, the short-term nature financial flexibility as it platform GrabCar. focusses on securing more short-term of these facilities and its sizeable Through this deal, up to 200 maturing debt over the next 1-2 loans from creditors, analysts warn. drivers with Strides can sign on to Noble Group is turning to short-term years mean its liquidity remains take bookings exclusively via the constrained,” adds Morrison. credit in order to keep financing Grab app, and enjoy additional In its first-quarter results, Noble costs low amid a difficult operating performance-related cash incentives highlighted its improved operating environment, illustrated by its from GrabCar each month, starting recent refinancing of US$1 billion of income and margins. However, from April 2016. unsecured committed bank facilities operating cash flow stayed negative Through this partnership, Strides mainly because of reduced availability will be one of GrabCar’s preferred which contains only a one-year tranche compared with multiple-year of term letters of credit from banks. transport partners, providing Just weeks after revealing its tranches in previous years. GrabCar with more drivers and a successful refinancing, the group’s “Noble’s debt structure is shifting brand new fleet to better fulfil an CEO Yusuf Alireza abruptly quit towards shorter term financing to increasing demand. his post, citing family reasons. The complement its asset-light business When asked about whether group also revealed that it will sell its Strides will cannibalize its existing model that focusses on workingsubsidiary, Noble Americas Energy capital management, and to reduce taxi business, SMRT’s management overall finance costs. This will result Solutions. said that the main purpose of Strides “We do not expect any major in a weakening debt maturity profile, is to give its taxi drivers the choice changes in strategy given both which Fitch deems no longer to be to switch to the private hire car consistent with an investment-grade William Randall and Jeff Frase have business, which offers much more rating,” Fitch Ratings said in a report, been with Noble for several years and flexible work hours. Richard Elman remains as Chairman after cutting Noble’s credit rating to However, analysts note that and Executive Director,” says DBS junk. there will be bumps along the way analyst Mervin Song. Meanwhile, Joe Morrison, a for Strides as it enters the alreadyMoody’s vice president and senior saturated market. credit officer, says that the refinancing SMRT takes Uber by the horns, “In our view, with UberX and of the credit facilities and the receipt launches private hire car business GrabCar already in the market, there in March of $750 million in proceeds One of Singapore’s largest taxi may be some difficulty in replacing operators plans to give car booking from the sale of its remaining stake those drivers who switch to drive for apps like Uber a run for its money. in Noble Agri, has alleviated the Strides, and possibly lead to higher

Noble Group under threat as short-term debts mount

Half of sales are from e-commerce

taxi idle rate,” OCBC Investment Research analyst Eugene Chua said in a report. Courts revamps stores to boost productivity by 50% The local retailer is overhauling the interior design of its stores in order to boost productivity and bring down its expenses. Courts has overhauled its store in Causeway Point, and CEO Stan Kim says that the revamped layout will serve as a testbed for the group’s next-generation store model. “Based on our data, 50% of online sales are from Click and Collect, which suggests that shoppers still want to visit physical stores whilst shopping online. The strategy is really about creating a omni-channel approach,” he says. He adds that the store’s productivity is expected to grow by 50% with the launch of new magnetic panels, on which most instore posters will now be attached to. This is not the retailer’s first attempt at using tech to cut costs, according to CIMB analysts Jonathan Seow and Kenneth Ng. “The retail environment is tough, mitigation is that rents have room to be negotiated down and that is happening. Court’s prior investments in supply chain logistics have also helped reduce inventory days, cut down aged inventory and support margins,” they say. They add that while Courts is tackling the rise of e-commerce by driving their own e-channel sales, it remains to be seen whether there are deeper challenges ahead for brickand-mortar retailers. “We feel that these measures, together with a more attentive service team, will go a long way in enhancing the overall shopping experience with Courts,” says Kim. SINGAPORE BUSINESS REVIEW | JULY 2016 21

FINANCIAL INSIGHT: venture capital

Deal #1: GrabTaxi clinched US$350m in funding from China Investment Corporation, Coatue Management, Didi Kuaidi, SOFTBANK and Tiger Global Management

Deal #2: PropertyGuru inked a US$129.5m venture capital deal with Emtek, Square Peg Capital and TPG Capital

Deal #3: Giosis Gmarket received US$82.1m in funding from Brookside Capital, eBay, Oak Investment, Saban Capital, UOB Venture Management and SPH

Singapore’s long venture capital summer Venture capital deals should continue to shine bright in Singapore even as investments around the world are starting to dim.

inter is coming, at least if the first months of 2016 are any indication, with a notable drop in venture capital deals globally, although Singapore will likely escape a protracted withering in deal activity. The country will be resilient relative to the rest of Asia, according to analysts, due to its abundant dry powder, nurturing environment for entrepreneurs and the growing focus of local startups to expand in the lucrative Southeast Asian region. “The increase in both the number and total value of venture capital deals in Asia through 2015 was part of a broader global trend – the same uptick in venture capital activity was recorded across all regions,” says Felice Egidio, head of venture capital products at Preqin. “In particular, the average size of funding rounds increased, suggesting that more sizeable investments are becoming more commonplace.” “In contrast, in 2016 we have seen that trend reversed, with the number of venture capital investments globally declining in the first quarter of 2016 (1Q16),” says Egidio. However, Egidio notes that this decrease is not uniform across all regions and industries. He notes that it is possible that some investors view markets such as Singapore as a relatively safe haven when compared to more volatile markets in Asia. Preqin data reveals Singapore is off to a fantastic start in 1Q16 with the number of venture capital deals in 22 SINGAPORE BUSINESS REVIEW | JULY 2016

Trends suggest that 2016 will be another banner year for Singapore venture capital deals despite signs of a global deceleration.

Singapore rising to 34 with aggregate deal value of US$290 million, up from 28 deals with aggregate deal value of US$111 million in the same period last year. Also, as of April 15, 2016, Singapore captured 17% of total funds closed and 3% of aggregate capital raised in Asia, both higher than its 2015 full-year performance of 8% of total funds closed and 2% of aggregate capital raised. These trends suggest that 2016 will be another banner year for Singapore venture capital deals despite signs of a global deceleration. It helps that the country holds inherent advantages compared to less developed and riskier neighboring Asian markets. “The friendly environment being fostered in the country, combined with the large amount of dry powder available for fund managers to invest, makes it likely that deal volume in Singapore might continue to be high through the rest of the year,” says Egidio. Fuelling ambitious startups The growing strength and ambition of Singapore startups, supported with a swath of government initiatives, will fuel venture capital activity not only in 2016 but for the next few years. “Startups are more regionally focused, better funded, and working on larger, more relevant issues to the vast majority of Southeast Asia consumers,” says Justin Hall, principal at Golden Gate Ventures.

FINANCIAL INSIGHT: VEnture capital Hall notes that venture capital interest is leaning towards financial technology (FinTech), e-commerce, and marketplaces, mirroring the maturing Southeast Asian market. “These are consumer-focused verticals and Southeast Asia as a whole is moving towards the middle income class and more consumers are coming online. Singapore is a good reflection of this,” says Hall. Singapore, which is becoming a home to an increasing number of promising startups, will also benefit from the high amount of dry powder that has accumulated. Hall says 2015 was the year of fund formation with many new funds raising large amounts and existing funds successfully raising new funds, and he expects much of this capital will be ready to be deployed in 2016. “Anything in the consumer space will be at play 2016 onwards. Capital deployment will increase significantly this year, as many funds will be ending their raises this year,” says Hall.

Garena gets $170m in funding

Foreign funds flow in Singapore is also beginning to attract foreign investors that are targeting Series C rounds and above, although not in large numbers yet, says the Asian Venture Capital Journal (AVCJ). This growing interest in Singapore comes with the increase in venture capital players focusing on seed and early stage funding, as well as heavy government investment in boosting the startup ecosystem. “The government’s approach in recent years has been very systematic. First, policies were put in place to support incubators and fundraising by seed-stage investors. Then the focus switched to Series A and Series B, as well as corporate venture capital. By ensuring there is sufficient local capital for start-ups as they move through the seed and early stages, the objective is provide a large enough stream of investment opportunities for foreign investors that target Series C rounds and above,” says AVCJ. “There are all kinds of incentives, but the matching approach – the government matches private sector contributions to a fund – has probably made the greatest impact on VC fundraising,” AVCJ added. “To say that Singapore helped catalyse the venture capital industry would be an understatement,” concurs Hall. “Much of what the venture capital industry is today is in large part a result of the tremendous amount of resources Singapore brought to bear on the issue.”

A report by Golden Gate Ventures highlights that an explosion of new funds in the region has given startups the ability to scale up in recent years. For instance, in 2015 alone, firms including Golden Gate Ventures, Northstar Group, Venturra Capital, Sequoia, and KKR have launched or backed SEA-focused new funds, with a total capitalization of as much as US$2 billion. There has also been an increase in the size and frequency of funding rounds, driving an increase in startup valuations. Apart from these promising trends, private equity firms are increasingly making smaller earlystage investments in SEA startups instead of writing larger growth-stage checks, which is a sure sign that they expect to make Uber- or Facebook-level returns on such deals.

Venture capital deals in Singapore 1Q10-1Q16

Felice Egidio

Source: Preqin

Justin Hall

Southeast Asian boom Singapore is benefiting as well from the booming markets of Southeast Asia, which has drawn the interest of technology startups looking to service the high-growth region “Like China a decade ago, Southeast Asia is now an emerging market on the brink of something big,” the report noted. The report notes that five of the 10 member countries of the Association of Southeast Asian Nations (ASEAN) are among the top 25 countries globally in terms of gross domestic product growth, and that the ASEAN Economic Community (AEC) had a nominal GDP of US$2.4 trillion in 2013, placing it seventh overall in the world. Growth patterns suggest the AEC could rise to the fourth spot by 2050. “The region has already passed an inﬂection point in terms of digital growth; more people are consuming digital content, more people are paying for goods and shopping online, and more people are buying mobile phones,” Golden Gate Ventures adds. With their rising incomes and consumption of digital devices and services, technology startups are flocking to Singapore often to set up a home base for their Southeast Asian expansion. Previously, investors had been wary SINGAPORE BUSINESS REVIEW | JULY 2016 23

FINANCIAL INSIGHT: venture capital Asia- and Singapore-focused venture capital fund raising, 2010-2016

24 SINGAPORE BUSINESS REVIEW | JULY 2016

FinTech fuels Hong Kong’s fire If Hong Kong has a plan to step out of China’s shadow in attracting venture capital deals, its strongest play will likely involve its growing stack of technology startups. The Hong Kong government is pouring large investments into the technology sector, especially in financial technology (FinTech), which has led to a surge in local startups and venture capital interest. Analysts say this government support plus the ongoing industry consolidation paint a rosier outlook for venture capital deals in Hong Kong in 2016 and beyond, especially if Hong Kong comes into its own as the preferred connecting bridge for cross-border deals. “Hong Kong definitely has an eye on FinTech with its biggest deals going into the industry,” says Melissa Guzy, co-chair of HKVCA Venture Committee and managing partner of Arbor Ventures, adding that increased government support will generate more investments from both foreign and China based investors.

Source: Preqin

of targeting Southeast Asia because of the difficulties in servicing the region’s countries with differing market dynamics and regulatory environments. But Golden Gate Ventures says the creation of the AEC and a more cohesive economic environment in Southeast Asia has assisted in facilitating access to the region’s markets. Southeast Asia has also long been overshadowed by China, but the slowing growth of the latter has led foreign investors to start looking into the opportunities in Southeast Asia. AVCJ reckons that venture capital interest in Southeast Asia technology start-ups will continue to rise, especially in the sectors of e-commerce and social networking and gaming. There is also more activity in areas such as ride-hailing and delivery platforms, onlineto-offline services, and FinTech. “It is important to note that Singapore is rarely the sole target market for these companies. Some start in the country with a view to entering other markets, while others relocate their headquarters to Singapore when their business becomes regional,” AVCJ notes. One common theme for these start-ups is their penchant for operating in multiple markets. However, this can make the rollout of services more complicated due to differing regulatory regimes, market dynamics and local competition. The think-tank added that Singapore and the rest of Southeast Asia face challenges in producing startups of significant scale, barring a few frontrunners such as the consumer Internet platform provider Garena, which distributes game titles in various countries across the region. “The recent Series D round for Garena is encouraging in this respect, but it is one of relatively few companies to achieve reasonable scale. The question industry participants ask concerns sustainability: Has the venture capital ecosystem in Singapore reached a critical mass whereby it can thrive without government support?” says AVCJ. Aside from Garena, Hall reckons that Singaporean e-commerce and community marketplace Carousell and Singaporean online supermarket Redmart have the potential to become venture capital-funded giants. “They’re all leaders in their spaces: Gaming, peer-topeer marketplaces, and eGrocery. They have world-class patents and technologies, extremely competent teams, and are all growing tremendously fast,” says Hall.

hong kong view

Government support is key Guzy reckons Hong Kong government support is nurturing an attractive ecosystem for entrepreneurs and a more conducive one for startups, which in turn will generate more investments from both foreign and China based investors. Among the Hong Kong government’s efforts to support technology startups, its partnerships with angel investors and venture capital groups are especially worth noting, says Peter Mok, head of incubation programmes at Hong Kong Science and Technology Parks Corporation (HKSTP), “As the local technology and innovation ecosystem develops, Hong Kong has attracted more and more startup investors to pay attention to local tech startups,” says Mok, adding that adding that government support helped the startup ecosystem clustered around research hubs expand rapidly. “Hong Kong, as an international financial hub, has a robust financial infrastructure and stable exchange rate, making the city highly desirable for international investors to come to and operate in,” he adds. Guzy notes that aside from HKSTP, Hong Kong has seen many emerging accelerators and incubator programs that eventually pair startups with investors launched by the likes of InvestHK, Cyberport, the Hong Kong Design Centre, Nest and FinTech Super.

HKSTP: Incubation programmes Seed to Series A Investment Funding Trend Singapore and the rest of Southeast Asia face challenges in producing startups of significant scale Source: HKSTP

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SECTOR REPORT: HEALTHCARE

The tourists are not coming back, experts say

Private hospitals clamour for greater support as medical tourism stumbles

Neighbouring ASEAN hospitals are rapidly modernising, and private healthcare providers in Singapore are struggling for growth as international patients vanish.

rivate healthcare providers need booster shots from the government in order to help them cope with the dwindling number of medical tourists. Experts and industry players note that Singapore’s hospitals are up against stiff competition from their counterparts in ASEAN. As more southeast Asian hospitals modernise, the city-state is slowly losing its appeal as a medical tourism hub. For instance, Indonesian healthcare providers have invested heavily in securing new facilities and equipment, says Beng Teck Liang, executive director & chief executive officer, Singapore International Medical Centre. This trend is among the culprits behind the sharp drop in Indonesian medical tourist arrivals, and has exacerbated the impact of the weak Indonesian rupiah. “It’s a given. In markets like Indonesia and Vietnam, we’re going to see a progressive improvement in the healthcare sector, which will result in fewer patients heading to Singapore,” Beng says. Beng notes that the hospital has seen declining numbers of medical tourists in the past couple of years, particularly those from Indonesia. While demand from Vietnamese patients remains strong, Beng believes that the trend of declining arrivals is not likely to be resolved in the near 26 SINGAPORE BUSINESS REVIEW | JULY 2016

Private hospitals need to cope with a massive shift in the profile of international patients.

future. “Indonesian healthcare providers are aggressively investing in new facilities and equipment. I think they are successful in encouraging patients to stay local, particularly now with the use of universal healthcare,” he says. Cutthroat competition Beng notes that the private hospitals need to cope with a massive shift in the profile of international patients. He highlights that in the early 1990s, Indonesian patients went to Singapore for even the most basic medical procedures; now, they only head to Singapore for extremely complex cases. As a result, earnings from medical tourism has dropped by as much as 40% in some cases. Beng stressed that private hospitals need more government support in order to stay ahead of their aggressive regional competitors. “We’ve actually had many conversations with people like the Singapore Tourism Board (STB) as to how they can help us, but I think their hands are tied as well. We want to have a dialogue with the Ministry of Health, but so far this has proven to be more challenging to have those conversations,” he says.

SECTOR REPORT: HEALTHCARE Beng notes that the Singapore Tourism Board has done its level best to help private healthcare players, but the regulator cannot do much about the competition that private providers face from public hospitals. Overseas patients are also crucial to the earnings of public hospitals, and Beng reckons that it is unlikely that governmentowned players will stop accepting foreign patients in order to give way to private providers. “There comes the dilemma. We do want to kick-start something; STB has encouraged the private sector to band together to grow medical tourism ourselves with some of their support. But our view is, what’s the point? We’re going to grow private sector medical tourism, but who’s going to benefit? So we really want to have that conversation with the government to understand exactly what’s going on from their viewpoint,” he says. Another problem is the huge capacity from the public sector which is about to enter the market. Public hospitals have expanded aggressively and hired plenty of foreign doctors, which will further put a strain on private operators. “With this extra capacity, at some point in time, I think the government is going to realise that the only way to sustain some of these hospitals is again to open up medical tourism. So again our question is: Why are we investing to build?” Beng laments. “We think in the next three or five years, the government is going to come back and say, let’s all get together and promote Singapore medicine together,” he adds. Lawrence Patrick, chief executive officer of Johns Hopkins Singapore International Medical Centre, concurred with this sentiment. “I think the dilemma here is that for a number of years the government told the private sector: If you build it, they will come and we will partner. But now, in a couple of years, they’re not going to need that capacity in the private sector and we’re going to see consolidations again,” he says.

Beng Teck Liang

Lawrence Patrick

Chris Norton

Internalisation is key Patrick notes that internalisation is a key growth pillar for private healthcare providers in this era of declining medical tourism arrivals. Consolidation will also be a key theme for players as this revenue source dries up. “While we can’t bring the patients here, we can go abroad and get those patients into the system. And then International visitor arrivals, top 15 markets, January-December 2015

Source: Disembarkation/Embarkation Cards

It is unlikely that governmentowned players will stop accepting foreign patients in order to give way to private providers.

there’s this notion that we all get better together so I think as a result of weakening medical tourism, we are going to see more consolidations here, such as more public-private partnerships,” he says. Christopher Norton, Director of Healthcare at PwC South East Asia Consulting, concurs that partnerships are the way forward for healthcare players in Singapore. Consolidation will not only hone the city-state’s edge in medical tourism, but it will also help public institutions provide better services to resident patients. “Singapore is always known for its quality and safety and expertise. But other hospitals, such as in Malaysia and Thailand, are also working to get international accreditation. This will be challenge for providers here,” he says. Beng, meanwhile, shares that Singapore Medical Group has established the most advanced eye facility in Jakarta in partnership with Ciputra Group, known as the Ciputra SMG Eye Clinic. It opened in October last year. Although expanding to overseas market is key to growth, Patrick cautioned that the continued internalisation of private players might have a negative effect on the local medical tourism sector. “We can continue to go to these overseas markets in order to compete, but what will that do to our operations here in the long-term?” he asked. He adds that Johns Hopkins no longer expects medical tourist arrivals to return to previous levels, and the group is rolling out a contingency plan to keep earnings robust. “As a group, we have taken the forward-looking approach. While we will still be able to cultivate overseas medical tourism visits to Singapore, the new way for organisations is to really reach out to these emerging countries,” he says, adding that the group is also looking to expand into Vietnam. “The private sector will always find ways to survive, and we are surviving. We’ll always find ways and means of getting to the market,” Beng stresses. While the threat from emerging Asian economies is very real, Beng says that Singapore still has an edge in terms of more advanced software and staff. “The positive note is that there is rising demand from countries like Vietnam, which is doing really well from an economic standpoint. The facilities there are still fairly rudimentary, and because wealth levels are increasing, they’re seeking better health care,” he notes. Patrick, however, is a lot less sanguine on Singapore’s prospects. “I don’t see the sector bouncing back. Currency fluctuation is one reason, but I think low oil prices is a bigger drag,” he says, adding that the decline in commodity prices has impacted demand from wealthy Middle Eastern patients. “Until they start to rebound, the patients won’t be coming back,” he says. Singapore’s medical tourism prospects were among the topics discussed at the recently-concluded Healthcare Asia Forum, which was held in Singapore on May 12. The event gathered about 40 top practitioners and was supported by Ortho Clinical Diagnostics and Avigilon. PwC served as the event’s thought leader. SINGAPORE BUSINESS REVIEW | JULY 2016 27

Kazuo Shiraga’s Chikisei Sesuisho

Art dealers find safe haven in Asian collectors’ insatiable appetite Despite predictions of doom and gloom earlier this year, it seems Asian collectors are still having an impact on the art market and are not to be counted out.

fter several years of growth the international art market took a turn for the worse in 2015, and according to the latest TEFAF Art Market Report, released in March, global art sales fell 7 percent last year on an annual basis to US$63.8 billion. This was the first decline since 2011 and was led by a sharp fall in the Chinese market, down 23 percent to US$11.8 billion, which set the UK above China once more as the second-largest market for art sales in the world, behind the United States. There were still plenty of headline-grabbing sales though, such as Pablo Picasso’s 1955 painting Les femmes d’Alger (Version ‘O’), which set a new record for contemporary art when it sold for US$179.3 million (well above its $140 million estimate and offering a significant return on the US$31.9 million it sold for at auction in 1997) or the US$170.4 million paid by Shanghai tycoon Liu Yiqian for a Modigliani. However, the art market’s slowdown was evident in overall results. Christie’s reported its first decline in annual sales since 2009, down 5 percent to £4.8 billion (US$5.47 billion), though this was still its second highest result in history (the privately-owned company does not release profit numbers), and while Sotheby’s total sales of US$6.7 billion in 2015 were flat on the year, the New

28 SINGAPORE BUSINESS REVIEW | JULY 2016

Christie’s reported its first decline in annual sales since 2009, down 5 percent to £4.8 billion (US$5.47 billion), though this was still its second highest result in history.

York-based auction house posted a fourth-quarter net loss of US$11.2 million with CEO Tad Smith warning consignments were tighter with buyers “in a wait-andsee mode.” Dampened art market The slowdown of the world economy may have put a damper on the art market in general, and many Chinese collectors have become rather more cautious with the country’s slowest economic growth in 25 years — at 6.9 percent a year — coupled with the ongoing clampdown on corruption, but a closer look at Christie’s 2015 data shows that the number of Asian buyers continued to increase (up 7 percent) and they now account for 18 percent of global buyers, with buyers from Japan and Singapore up 12 percent and 14 percent respectively. Asian buyers’ spending was up 15 percent in 2015 and contributed to 30 percent of Christie’s total sales, a clear indication that they are willing to spend on big ticket items. “So far we haven’t really seen China slowing down. There are buyers out there if you have the right property at the right price,” says Francois Curiel, Christie’s Chairman for Asia Pacific. Asian collectors’ appetite for Asian art has remained strong so far this year, as shown by the US$130 million

singapore’s hottest startups 2015 ASIAN ART REPORT worth of sales achieved in March during the 10-day Asia Week New York sales, as well as the strong sales reported during the five-day Art Basel in Hong Kong art fair, plus some impressive headline prices at Sotheby’s Hong Kong auction in April. In New York, Chinese specialist Eric Zetterquist of Zetterquist Galleries remarked that pessimism about the impact the faltering Chinese economy would have on sales was “completely unwarranted,” stating he had seen many Chinese collectors and dealers, with several new clients amongst the purchasers. James Lally of J.J. Lally & Co., which participated in Asia Week New York with an exhibition of ancient Chinese jade, reported that 80 percent of his gallery’s work at the event had sold, while New York gallery Joan B. Mirviss Ltd., which dedicated a showcase to mizusashi (a Japanese water jar), was 95 percent sold. Auction houses fared well during Asia Week too. “It was a robust week of sales. The Chinese paintings was over 90 percent sold by lots, the works of art also performed extremely well, and Chinese furniture outperformed expectation. So overall, I felt the market is there and the buyers are there,” says Jonathan Stone, International Head of Asian Art at Christie’s Asia. Stone, who was in New York at the time, noted the presence of numerous collectors from Greater China. “It was

I Xuan’s Tibetan Girl

A fine and very rare teadust-glazed gu-shaped vase

Amongst top prices achieved, Tina Keng Gallery sold two works by artist Wang Huaiqing for US$3.3 million, while Galerie Gmurzynska sold a Fernando Botero painting for approximately US$1.3 million.

clear that at the top end there was a lot of Chinese participation,” he says, adding he remains “cautiously optimistic” for the year: “At a time where there is quite a lot of volatility in different markets, art and in particular blue chip art looks like a very viable and sound place to keep your fund as an alternative asset.” Sotheby’s Asia CEO, Kevin Ching was also brimming with optimism after the firm’s April auctions in Hong Kong, pointing out that overall, sales were up 17 percent over last spring. “If this is what a correction feels like, then I sure hope we have one in the autumn too,” he quipped after the sales, which brought in US$405.5 million, exceeding the pre-auction estimate of $386 million. Record attendance of 70,000 people at Art Basel Hong Kong also translated into strong sales in the primary market, though galleries also reported collectors were taking their time and proved more cautious. Amongst top prices achieved, Tina Keng Gallery sold two works by artist Wang Huaiqing for US$3.3 million, while Galerie Gmurzynska sold a Fernando Botero painting for approximately US$1.3 million and David Zwirner sold a 2008 work by Luc Tuymans for $1.6 million. “The market, from our perspective, is as strong as last year,” says Jennifer Caroline Ellis, head of marketing and development at Edouard Malingue Gallery in Hong Kong, “There were more young collectors and a higher number of five-figure works sold to collectors, but both emerging and established ones.” Joanna Strumpf of the Sydney-based Sullivan+Strumpf gallery, which participated in Art Stage Singapore and Art Basel Hong Kong, also reports that in Hong Kong experienced collectors were out in force, “and while there was not the same frenzy as we have seen in previous years, there was no doubt that they were buying.” “It was a good mix of collectors for us — of the faithful and the new. And we were impressed by the number of younger collectors taking part in this year’s fair,” she says, adding “Having a Mandarin speaker on hand is definitely essential!” Growing interest This growing collector interest at a lower price point had also been noted at Art Stage Singapore in January. “The economic slowdown of China has definitely influenced the mood of collectors,” said Pablo Espinel, director of VIP relations at the fair, “However, something very interesting happened, collectors and casual buyers focused on lower price points. I would say the mood was cautiously optimistic; if in past editions a big number of sales were made in the range of S$40,000‑60,000, this year the most popular price range was S$20,000‑25,000. So in that sense, it was very successful for many participating galleries, because they sold more pieces, despite (these being) at lower prices per piece.” According to Espinel, Asian collectors are still showing nationalistic tendencies, buying from artists they know and from areas they are most familiar with, but the development towards a more integrated art scene and SINGAPORE BUSINESS REVIEW | JULY 2016 29

ASIAN ART REPORT market in the region is evident. “New buyers, especially younger investorsturned-collectors, increasingly cross-buy emerging contemporary Asian and Western artists. I believe that fairs such as Art Basel Hong Kong and Art Stage are the key drivers of this integration,” he says. Confident in the underlying demand in the region, the organizers of Art Stage Singapore have announced an expansion with the inaugural edition of Art Stage Jakarta (August 5‑7), a new boutique outpost that will bring together about 50 galleries offering contemporary art from across Indonesia. One of the galleries considering is the Singapore-based Chan Hampe Galleries run by Benjamin Hampe, who also heads the planning and development committee of the Art Galleries Association in Singapore (AGAS), which has 32 members. “A number of our members have been regularly participating in international art fairs and we’ve been tracking sales figures and they have been steadily going up,” Hampe said. In September 2014, AGAS members participating in KIAF in Korea sold US$401,000 worth of art and US$711,000 worth of art at Art Paris in 2015, and had sales totaling US$1.15 million at Art Basel Hong Kong this year. Thriving business “Business is not bad; business is actually doing well and growing. But in the current environment, yes if your business model is not strong, then there will be some natural attrition, because it’s a tough business. You have to work at it through thick and thin and continually grow your client base,” Hampe said, adding that the closure of seven galleries at Gillman Barrack in Singapore in the last year, along with that of the Pinacotheque museum should be put into context. “I don’t think it has anything to do with the market. A lot of these organisations appeared because of unnatural intervention. The galleries at Gillman had been incentivized by EDB (Singapore’s Economic

Wu Guanzhong’s The Yulong Mountains After Rain

30 SINGAPORE BUSINESS REVIEW | JULY 2016

AGAS members participating in KIAF in Korea sold US$401,000 worth of art and U$711,000 worth of art at Art Paris in 2015.

Development Board) to set up there, but many had not thought through their business model and [researched] the market in the region and what collectors were ready to embrace. A lot of them were never going to work,” Hampe said, adding “as for the Pinacotheque, museum audiences are hard won over in Singapore and there is already a glut of museums. It really wasn’t well thought out!” Gillman Barracks will soon get a new tenant. Believing in the strength of the current market in the region, Sullivan+Strumpf will open there in June. “Yes it is true, some of the galleries [at Gillman] have closed there recently, but to be honest galleries close in Sydney all the time too,” Strumpf said. By Sonia Kolesnikov-Jessop

Zhang Xiaogang’s Three Black Songs: Melancholy

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n order to stay ahead in the highly competitive corporate services industry, Singapore-listed advisory firm Boardroom needed to come up with a new regional business strategy to enhance its value proposition to clients. However, to support their regional business strategy, Boardroom needed to reconsider its financial reporting and analysis systems. Lynette Seah, founder and CEO of advisory and cloud solutions firm Alpha7, was brought in to work with Boardroom’s Executive Director and CEO Kim Teo. Together, they determined that quantitative mapping of the business to provide a more accurate and complete picture at any given moment was of paramount priority for Boardroom’s transformation. “We brought Lynette on board based on her expertise in digitally transforming businesses to ensure that our processes, people, and technology support our overall business goals. The Alpha7 team has helped us scale by embracing cloud solutions across areas including financial information, tech project management, big data, CRM, HRM processes, and more,” Kim says. Transforming businesses Lynette, who has over 25 years of finance and strategy experience, says that technology has changed the dynamics of global business. Industries have evolved, market leaders pivoted, customers made more accessible, products and services made on-demand, and competitive dynamics changed. Business leaders look to new strategies – digital ones – amid this fast-changing competitive context. “Data is king, but the caveat is getting mired in too much data with very little insights,” she says. “That’s where Alpha7 32 SINGAPORE BUSINESS REVIEW | JULY 2016

The caveat is getting mired in too much data.

Project Refresh Few people like change; many resist it. A people-first approach – identifying those who will embrace change and possess the right technical skills – was critical. New leaders in the finance and technology departments were appointed to oversee the changes. The new team scoped the current financial management system to understand the data flows. With the right technology and complementary personnel, business analysis became easier. This helped the team understand which services provided the best margins, how customer needs were evolving, and how to effectively price

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Revolutionising businesses through tech

lpha7 brings Fortune 500 level technology to APAC businesses at an unbeatable price point. Through A7 AppsConnect, its solutions arm identifies potential revenue streams in the organization, helping to increase their top line. It

synchronisation across departments and functions – moves faster and works better. “We enable them to diversify business models, markets, products, and revenue streams and get to market faster, easier, and more cost effectively,” she says. As for larger enterprises, Lynette notes that they are burdened with large, expensive, and inflexible technology systems. Enterprises are being threatened by nimble, smaller players across industries. Like SMEs, a data-driven enterprise – with live data synchronisation across departments and functions – moves faster and works better. “It can diversify business models, markets, products, and revenue streams. Enterprises can innovate to go downmarket, reaching new customer segments. They can get to market faster, easier, and more cost effectively, beating the competition,” Lynette says. offers standalone apps or recommended bundles, with over 46 apps in the marketplace as of May 2016. “As a small and relatively young company, it’s always a challenge to get that first meeting with a company to help them understand how we can digitally transform their business – and what the value of digital transformation is. After all, it’s a buzz word that gets thrown around a lot,” says Lynette. “But once we’re in the door, it’s usually within the first 5-10 minutes that the Eureka moment happens when the representatives we’re speaking to understand the tremendous value we can bring – not next month or next year, but today,” she says. In 2016, Alpha7 has added several new hires including an Asia Managing Director along with two General Managers to support its range of services and growing customer base. The company has added nearly a dozen new customers in just the first quarter of 2016, with several more in the pipeline including a few major enterprises. “We have several partnerships with companies, including one of the big four consulting firms, as well as one of the big four Australian banks. We are targeting to work with other banks, telecommunication companies, and consulting firms in order to extend our suite of solutions to a wider customer base in the APAC region,” Lynette says. To learn more about Alpha7, visit Alpha7 Advisory at www. alpha7.co/advisory and Alpha7’s Solution at www.alpha7.co/ solutions. SINGAPORE BUSINESS REVIEW | JULY 2016 33

Retail logistics case study of the year

Optimizing warehouse operations is key

Bgroup’s bespoke logistics solution streamlines F J Benjamin’s retail business

A focused, well-planned strategy smoothly optimized F J Benjamin’s logistics operations.

from fixed to variable since Bgroup services are now charged on a unit basis. The total saving of the annual logistics and distribution is approx. 25%, the turnaround time reduced by 50% and a clear visibility of the order status during the replenishment process. According to Ian Lim, CEO of F J Benjamin Singapore, Bgroup’s business solutions helped improve their logistics operations, although the retailer has been running and managing its own warehouse operations for over 50 years. “It really came down to a matter of focus for FJB. What do we want to be best at and what can we be best at? We are world class retailers and distributors of world class brands. We don’t see ourselves as logistics experts and don’t have any aspirations of doing so,” Lim said.

ome industries rely more on speed and efficiency than others, and one such industry is the world of retail fashion. Designs which are in vogue today can easily be considered outdated tomorrow. “Nothing moves as fast as fashion,” remarks Gianmaria Beretti, chief executive officer (CEO APAC) at fashion logistics company Bgroup, “and we make it move even faster,” he says. “Our constant search for innovative solutions, and our use of new technologies, our skilled staff and advanced IT (information technology) systems give us the ability to manage autonomously the logistics operations, providing real-time information to the client while they can focus on their core business,” he adds. Transforming a retail powerhouse Recently, Bgroup partnered with luxury brand distributor F J Benjamin Holdings Ltd to transform and streamline the latter’s business operations. Established in 1959 and listed on the Singapore Exchange in 1995, F J Benjamin has a robust presence in Southeast Asia, holding offices in Singapore, Indonesia, and Malaysia, managing over 20 iconic brands, and operating 218 stores. True enough, Bgroup applied its focused and wellcoordinated logistics and distribution services to F J Benjamin, with great success. Within six months, Bgroup had reorganized the inbound and outbound operations flow with a new layout to maximize productivity and reduce the turnaround time, and it is now working on inventory management with the target of reducing the storage space of at least 30%. The implementation of a new tailored Warehouse Management System (WMS) allow to track efficiently any stock movements — a vast improvement from the manual, delayed operations of old. Moreover, F J Benjamin’s logistics cost structure moved 34 SINGAPORE BUSINESS REVIEW | JULY 2016

Bgroup’s business solution helped improve their logistics segment.

Implementing tailor-made solutions Before sealing its working relationship with F J Benjamin, Beretti and his team embarked on a long study and analysis of the day-to-day operations flows of FJB in-house warehouse in Singapore. Following this period, Beretti examined F J Benjamin’s overhead costs and next six months projected figures and proposed a workable strategy to maximize staffing workloads, hike productivity, and trim operations costs. “We have implemented what we have been doing in our warehouses in Italy and China here in Singapore. We had to tweak and adjust the work styles/ways a little to fit the local market,” Beretti said of these efforts. Bgroup’s implementation of his business solution for F J Benjamin was not without any hurdles, however. Bgroup had to deal with the challenges of combining two different systems and expecting them to work seamlessly — “to put culture differences aside and work together towards a common goal.” “As F J Benjamin had their own in-house ERP system, it

retail logistics case study of the year was tough to introduce our WMS as we needed to link both systems for it to work,” Beretti confessed. “It took a longer time than needed to get the two systems to work together as we had to track down the person who designed the unique system as he had then left the firm. We had managed to get his assistance to modify the F J Benjamin system so it worked flawlessly with our WMS,” Beretti shared. “The integration was a huge success.” There were also certain issues involving manpower. “As they say, humans are creatures of habit, [so] it was a little tricky to change the mindsets and mentality of the existing team so that they could work together, without restrictions, as one,” Beretti said. Nevertheless, “through lots of persistence and determination,” Bgroup managed to overcome these challenges and achieve concrete results for F J Benjamin, including changing certain mindsets “to encourage them to work as a team to increase productivity.” Success despite challenges For the most part, Bgroup’s efforts have been successful, despite some room for improvement in feedback provision and customer service staff communication. “Partnering with Bgroup has allowed our teams to focus on becoming better retailers and distributors. For every hour or day we don’t need to spend on logistics and warehouse - we have another hour or day to invest with our sales associates, our customers and with our stores,” Lim says. Overall, F J Benjamin has been largely satisfied with Bgroup’s revamp of its processes and systems. “For any organization that wants to focus on their core competency, and partner with a trusted, experienced and proven full service logistics provider - Bgroup should be a real consideration,” Lim says. On the back of its successes locally, Bgroup’s expansion plans involve owning more Singaporean warehouses to manage new clients and obtain additional retail clients in the next few years. “We are working to come up with a solution or a way to sell unsold past season’s merchandise or items that have been in the warehouse for a certain amount of time,” Beretti shares. Bgroup is currently working on a new platform that will function as a hub for ideas, propositions, and new solutions, called B-Lab. “We are already working on how we can grow our business via e-solutions,” Beretti reveals, adding B-Lab Solutions is likely to be rolled out to the public by end-2016.

Bgroup revamped the system,

Gianmaria Beretti, CEO of Bgroup

Making fashion move forward

he Bgroup was set up in 1970 as a company specializing in transporting hanging garments. With its rapid growth, the business has expanded into restoration services, pick and pack, inventory management, stores replenishment and reverse logistics. Today, Bgroup is the ideal partner of leading international fashion retailers and apparel brands. The organization has seen its services unfolding into a plethora of new options for its clients thanks to its unprecedented ability to work in close ties and to listen for the clients’ needs in several niche markets across various locations in Europe, Asia and America. “We know how important it is for fashion items to arrive in store on time and in perfect conditions,” Beretti says. “We work hard to make sure we never disappoint.” “We stand out for our care towards each customer’s needs. We offer tailor-made projects/ solutions - we fit to our clients’ needs, and not have them to fit into our fixed-service packages. We are flexible in our ‘mix & match’ approach,” notes Beretti. “Most of our competitors can only implement two of the three main services that we offer—having the extra section of quality control, repairing, ironing, reconditioning, and labelling give us an edge in the fashion logistics industry,” he adds. In the meantime, Bgroup is actively considering growth opportunities overseas, according to Beretti. “We would like to expand into markets that are retail logistics related. Expanding region-wise, we are looking to expand our existing business to Malaysia, Indonesia and other countries we aren’t already present in South East Asia,” he says. Henry Ford once said: “You can’t build a reputation on what you are going to do.” This is exactly what Bgroup is: an organization that has been creating growing and long-lasting relationships with its clients thanks to the outstanding service and reliability that they provide. SINGAPORE BUSINESS REVIEW | JULY 2016 35

Education case study of the year

Pre-schoolers benefit from workplace centres

Work without worry: Learning Vision revolutionises early childhood education

It has been at the forefront of employer-sponsored preschool services for over 20 years.

f you are a working parent raising a young child, then you must be well aware of how hard it is to juggle work while ensuring that your child receives quality education at the same time. Entrusting young children to a childcare centre or a preschool is often a difficult choice for working parents, many of whom would rather have their kids educated somewhere close to their workplace. Because of this, Learning Vision made an unprecedented move in 1989 by partnering with corporations, ministries, schools and hospitals to bring preschools to the workplace for the first time. “The move towards workplace centres catered to the needs of working parents for greater convenience and proximity to their children,” says June Rusdon, founder of Learning Vision. Focusing its efforts on the importance of work-life balance, Learning Vision has enabled families to have more opportunities to spend greater quality time together. The early childhood education solution provider notes that many dual income parents were glad to be able to spend more time with their children on the commute to and from work, as well as given peace of mind knowing that they could respond to any emergencies quickly if necessary. With this, Learning Vision found its niche in the early childhood education industry. It is now the largest provider of corporate-sponsored centres with 22 preschools (nine of these are on-site workplace centres and 10 others are workplacecentric centres) and 12 infant care centres islandwide, entrusted with the responsibility of positively influencing over 2,400 children every year. “Our commitment to service excellence has made us the preferred partner of choice for government ministries, tertiary institutions, hospitals and private corporations,” Rusdon adds. 36 SINGAPORE BUSINESS REVIEW | JULY 2016

Bringing preschools to the workplace

Dual income parents were glad to spend more time with their children

The preschool centre provides on-site early childhood education services to partner institutions such as Nanyang Technological University, Nanyang Polytechnic, National Computer Services (NCS), Surbana One, Changi Airport, Biopolis, Tan Tock Seng Hospital (TTSH), and KK Women & Children’s Hospital (KKH). In addition, Learning Vision caters to strategic multinational corporations such as Singtel-NCS, Sony Electronics, and Canon. Peace of mind for parents The excellence and efficiency of Learning Vision’s services is illustrated by the glowing praises that it has received from its partners and clients. Patrick Peck, former manager at leading information and communications technology and communications engineering services provider NCS, shares that Learning Vision has been providing childcare services to the company’s staff for the past 12 years. “We are pleased to note that parents are happy with the centre’s quality of service. We are also heartened to know that

education case study of the year the teachers are well trained. We enjoy a good working relationship with Learning Vision and hope that we will continue to work together in providing quality care and education to the children of NCS staff,” Peck says. Peck adds that in addition to the comprehensive and intellectually challenging curriculum provided, the centre strives to involve the parents in its activities to let them play an active role in their children’s education as it organises many outdoor field trips to let the children understand the concepts learned in class. Justina Tan, director of human resources at Changi Airport Group, lauded Learning Vision’s ability to provide a conducive learning environment to the children of its employees. “Changi Airport staff has enjoyed peace of mind while they are at work. They are also satisfied with the well-structured and fun curriculum that the dedicated teachers provide. We look forward to the continued partnership with Learning Vision.” Tan says. Another of Learning Vision’s partners is KK Women’s and Children’s Hospital. Chua Pek Kim, director of human resources, congratulated Learning Vision for achieving the Singapore Quality Class and People Developer Awards. “These awards are endorsements of the high standards that Learning

June Rusdon, founder of Learning Vision

From ‘vision’ to Learning Vision

Learning Vision’s trailblazing team

Vision has in providing quality childcare services and skills enhancement they provide their staff. We are certainly assured of Learning Vision’s provision of best quality childcare services and education for the children at KKH,” Chua notes. With clients’ satisfaction over its services, Rusdon notes, “The confidence shown by our corporate clients and partners is a strong endorsement of our ability to provide quality early childhood services to our customers.” Feathers in its cap Learning Vision’s trailblazing accomplishments have not gone unnoticed. Since its inception, Learning Vision has been the recipient of a long list of awards and recognition. “Ninety percent of our centres are backed by the maximum 24-month operating licenses awarded by Early Childhood Development Agency (ECDA). Fifty percent of our centres have attained the Singapore Preschool Accreditation Framework (SPARK), a rigorous Ministry of Education (MOE) initiative for quality measures in preschools,” says Rusdon. In early 2000s, the group attained MCYS Outstanding Early Childhood Teacher (Principal) Award. It was also the first childcare centre to win the People Developer Standard Award. Among Learning Vision’s other accomplishments are the Singapore OK for Preschool, Singapore Promising Brand Award, and Singapore Quality Class Award. Learning Vision also won the ECDA Innovation Award, Mother & Baby Favourite Childcare Service Award and Asia Pacific Brands Award, and was conferred the ECDA Award for Excellence in Early Childcare Development.

hen June Rusdon was hunting for a good preschool for her children, she realized that she needed more than what traditional childcare centres provided— she wanted a first-rate quality education with holistic moral and social development. She also had friends who needed infant care or extended care hours, but finding a preschool that provided all these services was like finding a needle in a haystack. Rusdon established Learning Vision to address this gap, and its success has been unparalleled ever since. Learning Vision’s success did not come without challenges. Finding the right people who are passionate about the industry continues to be the biggest challenge, Rusdon says, as people continue to grossly misunderstand the preschool industry as a child-minding job with mediocre prospects. “While we have been campaigning fervently to encourage people to join this meaningful industry, perhaps more can be done and orchestrated on an industry level to help gain traction and valuable resources on improving the overall impression of this profession,” Rusdon says. Since the first centre at Bukit Batok in 1989, Learning Vision brand has continued to expand across Singapore where demand for quality preschools was gaining a momentum. Today, the childcare centre strives for more. It envisions to become a global brand spanning a network across Southeast Asia and the rest of the world. “Asia is going to be where all the excitement is, and hence we will strengthen our base in Singapore as the Asia headquarters in the next five to 10 years and put Singapore on the world map for our ideas and innovation. Reaching out to the regional markets is in our plans and we hope to work with like-minded businesses to refine best practices and ideally offer cross-training platforms as well,” Rusdon says. “Where there is an opportunity to raise the quality of education children receive, we want to be part of it,” she adds. SINGAPORE BUSINESS REVIEW | JULY 2016 37

Automotive solutions case study of the year

It’s more than just a journey planner

Continental’s innovative automotive solutions: Bringing the future of driving today

Continental is gearing up to provide advanced transport solutions for a Smart Nation.

ooking for available parking spaces in Singapore can sometimes be as tough as finding a needle in a haystack. This problem motivated international automotive supplier and technology company Continental to develop Park&Go @SG, a mobile app that helps drivers navigate efficiently to find available parking spaces in major car parks. There are many reasons why Park&Go @SG cannot be written off as just another journey planner. Not only does it include a map and a navigation system to help drivers locate currently available parking spaces, it also provides parking lot predictions and an SMS service to inform them of the price for the selected parking space on arrival. And apart from these innovative perks, Park&Go @SG is the first app using the cutting-edge Continental Backend Platform, a central database for collecting real-time data from external sources such as Land Transport Authority (LTA), Housing Development Board (HDB) and other third parties. Continental sees this as an essential step for moving towards digitalization of our products and engaging new mobility services through innovations.

It provides real-time data

38 SINGAPORE BUSINESS REVIEW | JULY 2016

It’s part of the wider push to enable smart mobility.

“With the mobile application, drivers will be able to effectively plan their journey ahead and minimize their frustration in locating for available parking spaces,” said Lo Kien Foh, Managing Director of Continental Automotive Singapore. “This will serve to reduce traffic congestion caused by parking queues and will result in less time spent searching for an available parking space as well as a reduction in fuel consumption.” Hassle-free parking The Park&Go @SG application is uniquely developed locally in Singapore with the active collaboration of HDB and LTA which feeds “live” data to end-users through the use of data analytics. “The prediction methodology in identifying parking space is unique and Continental has launched a patent for the mobile app,” Lo notes. Park&Go @SG was developed by Continental in collaboration with A*STAR’s Institute for Infocomm Research (I²R) and Technische Universität München (Technical University of Munich). An Intelligent Transportation Systems Lab was set up in April 2014 to research, study and carry out test-bedding of a whole range of communications, information and automotive innovations and technologies. The Park&Go @SG mobile app is the result of this collaboration between the three partners, and it is the first showpiece of the ITS laboratory involving I2R, TUM CREATE and Continental. Although the app already offers a chain of additional services, Continental also plans to embed more information and services such as availability of handicap accessibility and washing bays for HDB car park venues in the future. But there is a bigger picture behind Park&Go @SG than just parking

automotive solutions case study of the year spaces. The launch of Park&Go @SG and the Continental Backend Platform are part of Continental’s wider push to enable smart mobility in Singapore, as part of the city-state’s ambitious Smart Nation vision. Both services will boost Continental’s technical competence both in apps creation and the development of a robust backend infrastructure ecosystem, and are essential in the on-going Future Mobility Initiation in Singapore. Aiming for driverless vehicles “This is part of Singapore’s Smart Nation initiatives as it provides a highly reliable and secure backend environment which can be trusted by original equipment manufacturers (OEMs), third-party operators and consumers,” says Lo. “In our nation’s drive to fulfill its vision of driverless vehicles on its roads, services provided by the Continental Backend Platform will ultimately form an integral subset of the Autonomous Driving ecosystem in Singapore.” The applicability and versatility of the Continental Backend Platform will also serve the diverse commercial needs of the company. This will include business-to-business OEM projects and business-to-consumer applications such as Park&Go @SG. It will also allow Continental to support public sector projects in providing backend services for autonomous vehicles, and form an integral part of the OEM backend infrastructure for other project partners by acting as a secure repository and processing module for probe data. “Continental’s focus has always been stretching our know-how in R&D outside of our traditional setups. This emphasis will keep us constantly involved with the latest technologies and increase our competencies in cross-matching the functionalities between the Internet of Things (IoT) and the automotive to better engage the consumer world,” says Ralf Lenninger, Senior Vice President Interior Electronics Solutions at Continental Automotive. “Applications like Park&Go @SG and Continental Backend Platform are like inter-connected dots that we will eventually build upon and from which we will establish the basic foundation for the future implementation of an intelligent future mobility and Automated Driving,” he adds. Looking ahead Despite Park&Go @SG’s initial success, Lo foresees challenges in terms of increasing services and functionalities to ensure that users remain interested in the application. “In addition we will also focus on the importance of reacting to feedback provided from the end users and to plan improvements as part of maintenance,” he says. Challenges aside, Continental is committed to bringing the future of transportation to Singapore. “At Continental, we know that Intelligent Transportation Systems (ITS) will have a major impact on the transport systems network not only in Singapore but also globally,” Lo says. Continental Singapore will act as the regional hub of the Global Continental Backend Platform and will help channel expertise and technological know-how from Continental to suit local needs and serve the requirements of Continental’s business units in the region. Singapore has been a hub of Research & Development (R&D) activity for Continental ever since Continental Automotive Singapore Pte Ltd was established in 1997. The office develops and tests important technologies for radio and navigation, user interfaces, displays, entertainment and controls. The mobile application is currently based on the Android version and is available to the public free of charge. Continental will launch the iOS version in the upcoming months.

Continental’s R&D center in Singapore

Staying ahead of the curve

ounded in Hanover, Germany in 1871, Continental is today a leading automotive supplier worldwide. Continental develops intelligent technologies for transporting people and their goods. As a reliable partner, the international automotive supplier, tire manufacturer, and industrial partner provides sustainable, safe, comfortable, individual, and affordable solutions. In 2015, the corporation generated sales of approximately EUR39.2 billion with its five divisions. Continental currently employs more than 212,000 people in 55 countries. In July 2012 Continental Automotive Singapore unveiled its new Research & Development center and in November 2014 opened a new extension building to expand its R&D capabilities in Singapore. Located along Boon Keng Road, the facility is one of Continental’s largest R&D centers in Asia dedicated to the design and development of in-car information management systems. The extension of Continental’s R&D network to Singapore provides the anchor from which the company is able to expand its presence and gain a strong foothold in the region. “We are committed to grooming technically competent, broad-minded and well-trained engineers who have a firm and proficient grasp of technology advancements, know-how transfers and global project management skills,” says Lo. With its over 30 years of engineering history and a highly skilled international team, Continental Automotive Singapore is well placed to meet the growing demand for automotive engineering capabilities worldwide, especially in Asia. “As the industry continues to enjoy robust growth, staying ahead in the competition naturally becomes more crucial. How do we at Continental constantly strive to be the preferred choice, known for providing our customers and industry partners with one of the best solutions and products? With Singapore playing an instrumental role as one of Continental’s leading R&D hubs in Asia, these are indeed exciting times for our team,” Lo says. SINGAPORE BUSINESS REVIEW | JULY 2016 39

Singapore’s 10 largest mba providers

Employers still prefer experienced candidates

Is an MBA still valued among employers in Singapore?

Graduates are still in demand, but work experience often trumps education.

hen Singapore professionals finish their MBA, they might feel like they are on top of the world, but they are not necessarily on top of the employability food chain. The banking and finance industry, for example, is putting more value on work experience than the coveted master’s degree in business administration. Analysts suggest MBA graduates might be better rewarded pursuing careers in blue chip companies, technology firms and high-flying startups where their strategic skill set is needed. When Singapore professionals finish their master’s degree in business administration or MBA, they might feel like they are on top of the world, but they are not necessarily on top of the employment food chain. The banking and finance industry, for

40 SINGAPORE BUSINESS REVIEW | JULY 2016

MBA graduates are perceived to be a big expense as they are typically paid quite well.

example, is putting more value on work experience than the coveted management degree. Analysts suggest MBA graduates might be better rewarded pursuing careers in blue chip companies, technology firms and high-flying startups that need their strategic skill set. “MBA recruitment on-campus in Singapore among the banks and funds is quite muted,” says Jay Abeyasinghe, manager - banking & financial services at Morgan Mckinley. “Singapore-based employers value actual work experience over an MBA qualification. MBA qualifications - in the fields of investment banking and private equity - are not a requirement in Singapore. We very rarely encounter a client who asks for this qualification,” he adds. Abeyasinghe reckons the Singapore experience is different

from the US where a lot of the banks and funds will pick up the best MBA gradudates from the top tier names at graduation time. Banks are especially wary of hiring and training fresh MBA graduates that want to enter the industry when they can instead recruit seasoned professionals. “If you have no prior relevant work experience and are looking to switch into investment banking or a fund post MBA, it is very hard to compete against candidates with experience,” says Abeyasinghe. In contrast, candidates with prior relevant experience and an MBA from a top ten business school can be considered highly competitive. Companies are always looking for MBA graduates from top institutions such as INSEAD, Chicago Booth, Harvard Business School, Stanford, University of Pennsylvania, sayS Hsien Yao Lim, associate director at en world Singapore. But Lim notes that mostly prominent blue chip organisations, tech giants and hyper growth start-ups are constantly hiring MBA graduates for their expansion or restructuring plans. MBA graduates would do well not to snub these companies in their pursuit of large remunerations to recoup their education costs. “A problem that sometimes occur is some graduates has spent a high chunk of cash on their MBA and they will only accept high paying jobs to pay off loans rather than high potential companies that may offer them valuable experience,” he says. Lim further advises MBA graduates that companies are looking for candidates that can challenge norms, improve inefficiencies and show consistent excellent performance. “MBA graduates are perceived to be a big expense as they are typically paid quite well. Employers will be careful to only hire ones with a track record of success,” says Lim.

20,330 24,610

53 191 285 50 25 80 45 200

0 0 73 Grand Total 50

41 53 118

Ms. Tan Gek Khim, PBM, Senior Director Ms. Tan Gek Khim, PBM, Senior Director Ms. Tan Gek Khim, PBM, Senior Director Dr. Nilanjan Sen Dr. Nilanjan Sen Dr. Nilanjan Sen Dr. Nilanjan Sen Dr. Easwaramoorthy Rangaswamy Dr. Easwaramoorthy Rangaswamy Mr. Joe Heng Head: Higher Education & Business Development Ho Soon Eng Yasmin Javeri Krishan Yasmin Javeri Krishan Yasmin Javeri Krishan

Bangor University (UK) MBA in Banking & Finance

Nanyang Executive MBA Nanyang Fellows MBA Nanyang MBA Nanyang Professional MBA

Anglia Ruskin University, UK MBA University of Northampton, UK MBA

Strathclyde MBA

University of Birmingham MBA

Master of Global Business

Management Development Institute of Singapore

Nanyang Business School, Nanyang Technological University

Amity Global Business School

YMCA Education Centre

SIM Global Education

S P Jain School of Global Management, Singapore

60 Grand Total

Grand Total

139

140 140

140 Grand Total

145

96 183

Grand Total

145

45 Grand Total

25 80

311 311

64,914.25

56,272.04

23,540

35,310 with tax

32,528

35,981

16,585 23,540

65,000

95,000

23, 540

only)

1 year

16 months

12 months

1 year 1 year

12 months

18 months

24 months

2 years

12 months

1 1 1 1 13 months 18 months

3 intakes (full time) 2 intakes (part time)

no. of Intakes

18 months

16 months 16 months

43,674 including GST (Domestic

15 months

24 months

15 months

PART TIME

2 - 2.5 years

18,190

75,000 62,000

20,330

44,940 including GST (International) 43,674 including GST (Domestic)

17 months

10 Months

FULL TIME

63,708.50

145,031

62,000

95,000

PART TIME

DURATION

Survey period: April to May 2016. Data provided by companies. Information for NUS was obtained from its website. Singapore Management University, Aventis School of Management, East Asia Institute of Management, Kaplan Higher Education Institute, and ERC Institute declined to provide information this year. Currencies were converted to SGD based on FOREX rate as at May 20, 2016. 1 Ilian Mihov is the Dean of INSEAD globally and is based in Singapore INSEAD’s multi-campus structure enable its MBA students to exchange between campuses in Fontainebleau and Singapore. Each year, 70% of students participate in the exchange programme; and the number of MBA students in the Singapore campus will oscillate between 400 and 600 students at different time of the year.

S P Jain Global MBA

S P Jain Executive MBA

University of Sunderland (UK) MBA

Bangor University (UK) MBA in International Marketing

8 Grand Total

303

Dr. Dale Anderson, Deputy ViceChancellor

James Cook University MBA

62,000

James Cook University Singapore

353 353

Prof. Bernard Yeung Prof. Bernard Yeung 353 Grand Total

6 26 88 681

Prof. Bernard Yeung

Grand Total

9 323 5

Prof. Bernard Yeung Prof. Bernard Yeung

Prof. Bernard Yeung

133

Ms. Lim Bee Ing

110,072

FULL TIME

The University of Manchester

1004 1004

total

Manchester Business School, Singapore Centre

Grand Total

PART TIME

MINIMUM COST (SG$)

Asia-Pacific Executive MBA (Conducted in Chinese) Asia-Pacific Executive MBA (English) International Master of Business Administration Master of Business Administration (with NGS PhD) Master of Business Administration NUS-HEC M.B.A. NUS-Yale Master of Business Administration S3 Asia Master of Business Administration UCLA-NUS Executive MBA

1,004

FULL TIME

TOTAL NUMBER OF STUDENTS

National University of Singapore Business School

Ilian Mihov

HEAD OF SINGAPORE OFFICE

INSEAD MBA

MBA PROGRAMME

INSEAD1

MBA PROVIDER

Singapore’s 10 largest mba providers

SINGAPORE BUSINESS REVIEW | JULY 2016 41

Singaporeâ&#x20AC;&#x2122;s 30 largest mba programmes MBA PROGRAMME

PROVIDER/LOCAL PARTNER

TOTAL NO. OF STUDENTS 2016

TOTAL NO. OF STUDENTS 2015 120

Anglia Ruskin University, UK MBA

Amity Global Business School

Asia-Pacific Executive MBA (Conducted in Chinese)

National University of Singapore Business School

133

Asia-Pacific Executive MBA (English)

National University of Singapore Business School

Bangor University (UK) MBA in Banking & Finance

Management Development Institute of Singapore

Bangor University (UK) MBA in International Marketing

Management Development Institute of Singapore

Executive Master of Business Administration

PSB Academy

INSEAD MBA

INSEAD

1,004

1,018

International Master of Business Administration

National University of Singapore Business School

James Cook University MBA

James Cook University Singapore

311

Master of Business Administration (with NGS PhD)

National University of Singapore Business School

Master of Business Administration

National University of Singapore Business School

323

Master of Global Business

S P Jain School of Global Management, Singapore

Nanyang Executive MBA

Nanyang Business School, Nanyang Technological University

Nanyang Fellows MBA

Nanyang Business School, Nanyang Technological University

Nanyang MBA

Nanyang Business School, Nanyang Technological University

100

Nanyang Professional MBA

Nanyang Business School, Nanyang Technological University

NUS-Yale Master of Business Administration

National University of Singapore Business School

Rutgers Executive MBA

Rutgers Business School Asia Pacific

S P Jain Executive MBA

S P Jain School of Global Management, Singapore

S P Jain Global MBA

S P Jain School of Global Management, Singapore

174

S3 Asia Master of Business Administration

National University of Singapore Business School

Strathclyde MBA

YMCA Education Centre

145

175

The University of Adelaide MBA

Ngee Ann-Adelaide Education Centre

130

100

The University of Manchester

Manchester Business School, Singapore Centre

353

400

Master of Business Administration

PSB Academy

UCLA-NUS Executive MBA

National University of Singapore Business School

University of Birmingham MBA

SIM Global Education

140

153

University of Northampton, UK MBA

Amity Global Business School

University of Nottingham Master of Business Administration

PSB Academy

University of Sunderland (UK) MBA

Management Development Institute of Singapore

191

382

The University of Newcastle -

29 210

42 SINGAPORE BUSINESS REVIEW | JULY 2016

Singapore’s 30 largest mba programmes HEAD OF SINGAPORE OFFICE Dr. Easwaramoorthy Rangaswamy

TOTAL NUMBER OF STUDENTS FULL TIME

PART TIME

MINIMUM COST in SG$ FULL TIME 18,190

Prof. Bernard Yeung

PART TIME

DURATION FULL TIME

PART TIME

NO. OF INTAKES PER YEAR

16,585

12 months 12 months

95,000

15 months

Ms. Tan Gek Khim, PBM, Senior Director

20,330

12 months

Ms. Tan Gek Khim, PBM, Senior Director

20,330

12 months

Ilian Mihov

1,004

Dr. Dale Anderson, Deputy ViceChancellor

303

10 Months

110,072

2 years

32,356.80

44,940 including GST (Int.) 43,674 including GST (Domestic)

6 2

43,674 including GST (Domestic) 16 months 16 months

3 intakes (full time) 2 intakes (part time)

Prof. Bernard Yeung Prof. Bernard Yeung Yasmin Javeri Krishan

62,000 65

17 months 24 months 3

16 months

56,272.04 50

Dr. Nilanjan Sen

62,000

13 months

95,000

Dr. Nilanjan Sen

75,000

1 year

Dr. Nilanjan Sen

62,000

1 year

65,000

18 months

Joseph Schaffer

75,000

14.5 months

Yasmin Javeri Krishan

35,310 with tax

18 months

Dr. Nilanjan Sen Prof. Bernard Yeung

Yasmin Javeri Krishan

1 year

64,914.25

Prof. Bernard Yeung Mr. Joe Heng Head: Higher Education & Business Development

145

35,981

2 years

Dr. Susie Khoo

130

32,640

24 months

Ms. Lim Bee Ing

353

63,708.50

2 - 2.5 years

13 Prof. Bernard Yeung Ho Soon Eng Dr. Easwaramoorthy Rangaswamy

140 36

23,540

9 Ms. Tan Gek Khim, PBM, Senior Director

118

145,031

15 months

32,528

24 months

23,540

12 months 12 months

32,742 24,610

12 months

28,761.60

23, 540

2 years 12 months 18 months

6 3

INSEAD’s multi-campus structure enable its MBA students to exchange between campuses in Fontainebleau and Singapore. Each year, 70% of students participate in the exchange programme; and the number of MBA students in the Singapore campus will oscillate between 400 and 600 students at different time of the year.

SINGAPORE BUSINESS REVIEW | JULY 2016 43

analysis: China Slowdown

Is time running out for policymakers?

Risks resurface for emerging Asian economies after brief respite

Economic growth risks are again haunting emerging Asian economies as Chinaâ&#x20AC;&#x2122;s slowdown takes the centre stage.

sian markets are restless, and economies, large or small, are offering little by way of direction. Additionally, policy makers appear to be suffering from a lack of conviction about how to navigate the uncertain waters. We are sure that there will be a lot of headlines about the US elections, Brexit, and the economic and political situation in various EU economies in the coming months, but after a couple of months of respite, we think China will again dominate global After a poor 2015, regional exports remain very weak

Source: CEIC, Deutsche Bank, Data for 2016 through March, except for China, S Korea and Taiwan

44 SINGAPORE BUSINESS REVIEW | JULY 2016

We are uncomfortable with the ongoing credit boom, which seems to be fuelling speculative positiontaking.

economic sentiments going forward. It was a rare but welcome phase during March/ April, when a combination of Fed relent, weak dollar, rebounding commodities, and signs of a turnaround in China boosted global asset markets. We consistently reported during this period that fundamentals did not justify such a strong rebound, and as May has begun, it appears that those weak fundamentals are now dragging the markets back again. Having engineered some degree of economic bottoming through stimulus measures and benefitting from the US Fedâ&#x20AC;&#x2122;s dovish tone, the Chinese authorities will have to demonstrate renewed policy vigour soon, as there is a palpable sense of economic momentum slowing and financial market risks resurfacing. Vulnerabilities rise We are uncomfortable with the ongoing credit boom, which seems to be fuelling intra-financial sector intermediation and speculative position-taking as opposed to supporting real economic activity. The renewed proliferation of investment products, many of which are characterized by a high degree of complexity and opacity, is a source of concern. Chinaâ&#x20AC;&#x2122;s

analysis: China Slowdown trade and PMI readings are not helping matters, with exports remaining weak and PMI flattening out lately, soon after reaching a trough late last year. The readings are in fact uniform across Asia, with Asia-ex China PMI, both headline and manufacturing, turning lacklustre in recent months. Without a rebound in regional trade and manufacturing, the economic outlook will continue to darken, we reckon. Some rebound in commodity prices and continued improvement in US labour markets have yet to translate into better exports figures. After an exceptionally poor year for trade, Asian exporters have not seen anything promising in 2016. In fact, for China, Hong Kong, Singapore, South Korea, the Philippines and Taiwan, year-to-date declines are worse than the 2015 outturn. Soft US/ EU consumer demand for Asian exports despite improvement in labour markets and an historic oil windfall (akin to a major tax cut) remains a vexing problem for the region. In our latest update of the Asia vulnerability monitor, which looks at 9 sets of indicators for the 10 EM Asian countries in our coverage, we see China, Hong Kong, and Malaysia flashing red. China’s transition has been striking, from very low vulnerability in 2014 to high risk ranking during the last two quarters. Slowing growth, uncertainty about the exchange rate, high levels of corporate and state-owned enterprise debt, and fragile asset markets make the world’s second largest economy a source of substantial risks, in our view. At the other end of the risk spectrum, India and Indonesia have made substantial progress in mitigating macro risks over the past couple of years, as reflected in their “green” scores. Hopes for structural reform As terms of trade have worsened and China has slowed, there has been a marked slowdown among EM economies in recent years. With limited fiscal and monetary policy room available, and the efficacy of demand supportive policies suspect, EM economies have little other than the pursuit of structural reforms as the way to counter the ongoing growth malaise. We find many EM economies displaying an unsurprising and yet disappointing slippage in structural strength in recent years. This is disappointing particularly in the current cycle, which is characterized by pervasive demand weakness. Empirical evidence from long term studies of economic growth show that most EM economies have grown on the back of strong accumulation and deployment of capital (by channelling high savings rates) and labour (taking advantage of favourable demographics), as opposed to improvements in total factor productivity (TFP).

While structural reform has become a popular catch-all term to encapsulate almost everything outside the spheres of monetary and fiscal policy, and has been used widely in this broad context, in our view more work needs to be done on systematically analysing the progress of specific structural factors and identifying the most important reform priorities in different countries. Looking at the overall scores, Asian stalwarts Hong Kong, Singapore, South Korea, and Taiwan take up the top of the table of the structural performance scorecard. It is striking how these economies score high almost in all categories, underscoring the point for economies aspiring to achieve high levels of prosperity that comprehensive, across-the-board reforms are needed as opposed to piecemeal efforts. At the other end of the spectrum, Argentina, Ukraine, and Venezuela remain the bottom ranked countries. These economies are characterized by very poor quality of institutions, weak financial and goods markets, and high level of state intervention in the economy. There have been some striking changes to structural rankings between 2007 and 2014. India has seen marked deterioration in its scores, ranging from education to financial and goods markets. This contrasts with its relatively high economic growth performance during that period, but is consistent with the view that the impetus for high quality growth had slipped considerably in recent years. We will watch with interest if matters improve under the aegis of the new government, which came to power in mid-2014. While there is considerable worry about China’s slowing growth momentum and debt problems, we take heart from its steady improvement in structural strength. While much more needs to be done, there has been encouraging improvement in its institutional quality, infrastructure, financial market, as well as goods and labour markets. Some slippage in economic openness however is a source of concern. In terms of regions, Asia remains the most advanced on structural quality scores and Latin America the least advanced. EMEA is in the middle of the pack but there is divergence within EMEA: Czech Republic, Israel, and Poland rank much higher than Russia, Romania and South Africa. By Deutsche Bank Manufacturing PMI- new orders After an exceptionally poor year for trade, Asian exporters have not seen anything promising in 2016. Source: Haver Analytics, Deutsche Bank. Data through April 2016

SINGAPORE BUSINESS REVIEW | JULY 2016 45

EVENT COVERAGE: startups

ANMOL MOHAN, PAKTOR: “The only way to find out what is appealing to your customers is to let your data speak on behalf of them.”

TRISTAN TORRES, DELIVEROO: “The first thing we do in the morning is to go on Facebook or Instagram. Instagram converts ten times better.”

TERENCE ZOU, RYDE: “The power of physically seeing and interacting with a product cannot be underestimated even with virtual technology.”

Startup success secrets from the pros

The road to success is paved with sleepless nights and rejection for budding entrepreneurs, but hurdles can be overcome with good marketing, unique product offerings and good old perseverance.

hen food delivery startup Deliveroo first started in Singapore, nobody could have predicted just how rapidly its business would grow. Within three months of its launch, the company had tripled its network of restaurants. In less than a year since its operations started, the startup is already employing a staggering 700 drivers. Deliveroo says that a key ingredient behind its success is its foolproof marketing strategy. “The first thing we do in the morning is to go on Facebook or Instagram,” says Tristan Torres, General Manager, Deliveroo. “Basically we have a strong strategy on Facebook and Instagram and we created the need to eat good food.” Speakers at Singapore Business Review’s recentlyconcluded 20 Hottest Startups of 2016 Panel Briefing. stressed that startups must not only possess passion and vision, but must also maximise marketing return on investment and attract ample funding, among other key success factors. Maximise marketing ROI Singaporean startups cannot afford to splurge on big budget marketing campaigns, so they must squeeze out the most bang from each marketing buck they spend. In fact, maximising marketing ROI is not only a sweet-sounding goal, but also a survival imperative. Torres shares that Instagram is Deliveroo’s platform

46 SINGAPORE BUSINESS REVIEW | JULY 2016

The power of physically seeing and interacting with a product cannot be underestimated

of choice when it comes to online advertisements. “Instagram converts ten times better. People are more enagged with brands in Instagram. We make sure that our posts are targeted so that they appear right before lunch, in the afternoon, and at night. This is how it works,” Torres says. Torres further shares that Deliveroo puts a lot of thought into when their ads appear. “We know that on Mondays and Tuesdays, everybody wants to eat healthy because they partied over the weekend. Weekends are more big and we always try to measure every cent we put on any ad, whether its on Facebook or Instagram,” he says. This sentiment was echoed by Terence Zou, founder and chief executive officer at RYDE Technologies. “Every marketing dollar spent must be well thought through since startups generally have to work on a tight budget,” he says, adding that this can be done both offline and online. One type of offline activity that can bring a lot of value for their cost are product awareness campaigns aimed at new users. He says the power of physically seeing and interacting with a product cannot be underestimated even with the surge of digital and virtual technology, which is why his company’s steamboat buffets inviting loyal supporters have been a hit.

EVENT COVERAGE: startups Greg Lipper, founder & chief executive officer at Happi Pte. Ltd highlights how their niche strategy is paying dividends. The consumer and workforce insight platform helps people find a way to satisfy material desires with deals and prizes while also driving more money to worthwhile causes such as charities and local communities. Lipper says there is an opportunity for niche social media startups to use technology to combine the best of both worlds: Selling in e-commerce sites and entertainment in mass market social media. Social media startups that are looking to attract investment should pitch to relevant and interested parties that are in the same verticals as them or have similar portfolio companies, says Melvin Tan, cofounder at Lunch Kaki. Tan cites how Chinese powerhouse Tencent, which is the parent company of WeChat, invested in SoYoung, a social network and marketplace for plastic surgery. While the former could have easily started their own social network given their financial power, they opted to invest because of the latter’s domain expertise, ability to execute and large number of new users.

For mobile apps, maximising ROI is often closely linked to big data. For the team behind mobile app Paktor, which has around 7 million users, analysing the enormous amount of user data leads to thoughtful improvements and marketing innovations. “Marketing is one domain which has utilised data to the fullest and almost all activities are data driven,” says Anmol Mohan, head of data analytics at Paktor. “The only way to find out what is appealing to your customers is to let your data speak on behalf of them.” Mohan says the Paktor team tracks not only the impact of marketing activities in real time, but they have also designed the system to dynamically change the key parameters of a marketing campaign to increase return on investment (ROI). “In any organisation, the efforts to maximise marketing ROI should be stretched to create a feedback loop with the product so that it evolves with the data that marketing campaigns are feeding,” says Mohan. “Marketing can only thrive when your product can keep up pace with the competition. Marketing also needs to develop it’s all round capabilities and should not rely on few dimensions which can fade away quickly,” Mohan adds. Mohan stresses that Paktor is intensely focused on digital advertisements. “If you don’t have an ad, you don’t have any standing among users. In Singapore, Facebook is still the number one platform and we spend about 70% of our budget there,” he says. With their limited marketing budgets, startups might be confused on where to put their funds, which is where the 80/20 rule could prove useful, says K enneth Lim, chief marketing officer at Alpha7. “A startup should have a balanced approach to marketing. My opinion is an 80/20 rule, 80 percent [of resources] to digital and 20 percent to traditional,” he adds. Find a niche in social media Lim reckons digital marketing efforts should be focused on search engine marketing, search engine optimisation, and display ads on social media platforms. Meanwhile, the traditional marketing efforts should focus on building awareness, depending on what a startup is selling. Business-to-business (B2B) startups should prioritize small scale seminars with a thought leadership angle, while business-to-consumer (B2C) startups should invest heavily in print ads for brand awareness and positioning. Ambitious Singaporean social media startups might be tempted to attempt to build a so-called “Facebook killer” but they might be better off creating niche channels, which will be the next wave of opportunity amid the saturation of mass channels.

Despite heavy preparation for pitches, entrepreneurs will frequently find themselves rejected.

Know yourself and never give up Singaporean entrepreneurs looking to secure more funding must be able to assess their startups critically to save time and effort. Pursuing investors when your startup has major flaws will only lead to a resounding “no” even with the slickest spiels. Henry Wong, founder & chief executive officer at Diamond TechVentures and a Stanford mentor advises entrepreneurs to use a five-point acid test to see whether their startup will pass the muster among investors. Namely, these five points are having a powerhouse team with CEO material founders, having a laserlike understanding of your market and positioning, protecting your technology and other intellectual property with patents, and predicting future demand of and potential customers of your products and services, and forging special connections that will help you get a foot in the investor door. Despite heavy preparation for pitches, entrepreneurs will frequently find themselves rejected, so mental fortitude and finding the right mentors are essential. “Raising seed money can be the toughest fundraising round startups needs to face. You are just starting, have no clear directions and no good connections,” says Kineret Karin, serial entrepreneur and co-founder at Tech for Good, an acceleration program for early stage startups. “The challenges you face when you start your entrepreneurial journey are only a learning curve. You will learn from your mistakes and you will learn from failing. Don’t be afraid to seek for people with experience to guide you. There are many out there,” adds Karin. SINGAPORE BUSINESS REVIEW | JULY 2016 47

EVENT COVERAGE: G3-PLC ALLIANCE

Dr. Anil Mengi talks about how G3-PLC is used in Germany

What you need to know about the G3-PLC technology

It’s a cutting-edge solution based on power line technology developed with one big goal – to optimise power production, distribution and consumption.

radical change is sweeping energy generation and distribution systems across the world. The rapid adoption of renewable energy sources means that electric grids need to become smarter, and energy companies must find the right coming years. technology in order to keep up with consumers’ swiftly changing energy consumption habits. “Tomorrow’s electric grid will be totally different,” said Bernard Lassus, chairman of the G3-PLC Alliance. “The management of this grid will be totally different. We will need data in order to manage this grid,” he said, speaking at the sidelines of the Alliance’s annual general assembly in Paris, France in April. Lassus noted that the increasing popularity of renewable energy sources, such as the rising 48 SINGAPORE BUSINESS REVIEW | JULY 2016

Anyone can use G3-PLC technology. The only way to be sure of a product’s quality is if it is certified by the Alliance.

use of photovoltaic cells, means that even ordinary consumers can now be producers of energy. Technology has blurred the traditional lines between energy producers and consumers. Against the backdrop of these changes, the G3-PLC Alliance advocates efficient grid management through the use of smart and reliable communication technology.

Marc Delandre

Bernard Lassus

The G3-PLC, or Third Generation Power Line Communication, is a very simple yet efficient technology for smart meters and smart grid technology. It is a plug-and-play solution that uses the existing electric networks to carry information, so installation efforts are minimal. It is a radio-free solution that allows consumers to effectively monitor and manage their electricity consumption. The technology was developed with one ultimate goal – to optimise power production, distribution and consumption. “G3-PLC is based on power line technology. Through power cables, devices and information systems can communicate and exchange data. Therefore, it is possible to manage peak consumption, to modulate power and to identify problems in order to immediately apply the best solution,” noted Lassus. “G3-PLC will still exist in 20 or 40 years, since it’s a mature but evolving technology, with always a backward compatibility with the previous version,” said Marc Delandre, general secretary of the G3-PLC Alliance, adding that it is a global standard that does not require any licence fees. The G3-PLC Alliance was first founded five years ago by 12 founding members to standardise and promote the G3PLC technology on a worldwide scale. Now, the Alliance is finally ready for the launch of its products on an industrial scale, with millions of products expected to enter the market.

Bernard Lassus discusses the use of G3-PLC in Paris

Recognising Singaporeâ&#x20AC;&#x2122;s exceptional listed, international and local businesses 28 June 2016 Conrad Centennial Singapore For more information, contact Julie Anne NuĂąez at +65 6223 7660 ext. 221 or email julie@charltonmediamail.com

50 SINGAPORE BUSINESS REVIEW | JULY 2016