Singapore Business Review (October-December 2019) by Charlton Media Group

Issue No. 89

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Singapore’s Best Selling Business Magazine

Why foreigners are snapping up trophy homes in Singapore

James Dyson and his $73.8m Wallich penthouse

..AND SO MANY ESTATE AGENCIES ARE CLOSING DOWN MALL RATS: WHY WE’RE STILL LOVIN’ IT BALIK KAMPONGERS UNHAPPY WITH LOCAL JOB OFFERS WORK WELLNESS: WHERE’S THE RUB?

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SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019

FROM THE EDITOR About Us

illionaires like UK industrial icon Sir James Dyson and Facebook co-founder Eduardo Saverin join the foreign ultra-rich individuals firing up recent luxury home buying activities in Singapore. The city has always been a property haven for the ultra-rich, but analysts have observed something different this year: luxury home prices are back to 2007 pre-Crisis levels. Check out our story on page 16.

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The Singapore Business Review is the highest circulating and best read business magazine in Singapore. Our online readership has an average of 215,000 unique viewers, according to Google Analytics. We won the Business Trade Media of the Year Award at the 2017 MPAS Awards. Do reach out to us if you would like us to tell your story to our readers via print & online advertising or events. PUBLISHER & EDITOR-IN-CHIEF Tim Charlton ASSOCIATE PUBLISHER Rochelle Romero PRODUCTION EDITOR Danielle Mae V. Isaac GRAPHIC ARTIST Mark Simon Engracial II ADVERTISING CONTACT Aileen Cruz aileen@charltonmediamail.com Vanessa Austria vanessa@charltonmediamail.com Karisse Coderes karisse@charltonmediamail.com Reiniela Hernandez reiniela@charltonmediamail.com ADMINISTRATION ACCOUNTS DEPARTMENT accounts@charltonmediamail.com ADVERTISING advertising@charltonmediamail.com

Further down the property market, we found at least 11 casualties of ongoing industry consolidation. Big names like Edmund Tie & Company and OrangeTee have merged, whilst other firms have simply closed down. Yet surprisingly, even as the number of agencies has fallen, the total number of agents rose. Check out our new list of the largest real estate agencies on page 20. This issue also features the latest in companies’ health and wellness programmes, an exclusive interview with the founders of Singapore’s second unicorn Trax, and the coverage of the annual Singapore Business Review Awards and SBR Asian Business Case Studies Awards. As always, enjoy the read!

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SINGAPORE BUSINESS REVIEW | DECEMBER 2019

Tim Charlton

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CO-PUBLISHED CORPORATE PROFILE

Brother’s focus on social responsibility and business flexibility for customer engagement The company is also helping communities in developing countries to regenerate forests.

n its third decade of operations in Singapore, Brother is stepping up its efforts in corporate social responsibility through Brother Earth, a programme that embodies the company’s community and environmental contributions. This programme encourages customers to trade in used printer ink and toner cartridges for recycling at no cost. They receive a special price or shopping vouchers when they bring in their old printers or used cartridges. Brother is also facilitating public engagement through “Click for the Earth,” an online facility where people can sign up and contribute towards environmental conservation activities. For every click made on the BrotherEarth.com website, the company will donate 1 yen (approximately US 1 cent) to support activities aimed at stopping desertification and regenerating forests in countries such as Peru, Guatemala and Thailand.

Nigel Lee, Country Manager, Brother Singapore

includes specific packages for the PR series (embroidery machines) and for printers and multifunction equipment. The result is a hassle-free and convenient business operation that ensures peace of mind for everyone involved.

Towards growth and maximum efficiency Another important initiative in Singapore is Brother’s Commercial Embroidery Machine Seminar, where interested parties can test The benefits of Click Charge and BroCare bed their own embroidery business by using Customers with a copier contract who the company’s semi-industrial machines. want to shorten or customise their plan The purpose of this seminar is to show can do so through Brother’s Click Charge business owners what they can do with the programme. The machines and when programme allows “At Brother, we believe that adding they can start to earn enhanced control by customising a personal touch to products and profit over the customer’s various products offering customisable products such as apparel, printing operations by providing accessories, and will be the next big thing.” regular preventive towels, encouraging maintenance and professional tracking them to give a personal touch to their reports. Some of its features include products and services. For instance, a free installation and machine setup, a luxury hotel in Singapore has acquired a new business multifunction centre (MFCBrother embroidery machine to specifically L6900DWT), periodic maintenance to sew customers’ initials on pillowcases and ensure maximum efficiency, toner and towels. drum delivery on demand, monitoring Brother knows that managing business and reporting of printing usage, warranty transformation and controlling cost coverage of parts and labour, and low cost of overheads are essential to the success of $0.01 per page print. organisations. That’s why it has introduced To further help businesses work smarter, BroPlan, a new print solutions concept BroCare offers an enhanced service that consists of strategically crafted package that provides additional coverage. packages that are suited to each customer’s Realising that a standard warranty may not environment—particularly for SMEs and be enough for the use of certain enterprises, those with business printing requirements— Brother offers an after-sales service that to ensure efficiency, reliability, and mobility. ensures quality support from the company’s With the customised solution offered team of professional engineers. BroCare by BroPlan, customers pay only for what

they need, which means they benefit from substantial savings on the most suitable package for their business. “At Brother, we understand that businesses need to differentiate themselves, and we believe that adding a personal touch to products and offering customisable products will be the next big thing. Businesses from retail to hospitality can customise their products with Brother label printers and commercial sewing machines,” said Nigel Lee, Country Manager at Brother Singapore. Lee added that the workplace of the future will be characterised by customer experience and personalisation. Artificial intelligence as well as cloud and predictive technologies pose new challenges to companies and their workforces, prompting them to come up with novel solutions to deal with market pressure and competition. A powerful, dependable brand like Brother can accompany enterprises on their journey of adaptation to evolving technologies and in the task of adding value to their services. The Providore uses Brother’s label printer to customise ribbons for their customers.

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

CONTENTS

FIRST 10 Michelin for show, fast food for dough 12 Do VCs feel the heat from corporates? 12 How Singapore’s second billion-dollar startup is revolutionising retail

14 Startups Feature

REAL ESTATE RANKINGS MERGERS AND CONSOLIDATION AS PROPERTY AGENT FIRMS BOOST EXPENSES ON TECH

RANKINGS 24 Accounting Rankings 28 Commercial Banks Rankings

BRIEFINGS

INDUSTRY INSIGHT LUXURY HOMES FLOURISH AMIDST RENEWED VIGOUR FROM ULTRA-RICH FOREIGN BUYERS

INDUSTRY INSIGHT OVERSEAS RETURNEES HIT WITH JOB MISMATCHES

38 HR Briefing 40 Finance Briefing

EVENT COVERAGE 44 Listed, local and international firms

STARTUP HOW SINGAPORE’S SECOND BILLION-DOLLAR STARTUP IS REVOLUTIONISING RETAIL

EVENT COVERAGE SOUTHEAST ASIA’S BEST SOLUTIONS TAKE SPOTLIGHT AT SBR ASIAN BUSINESS CASE STUDIES AWARDS 2019

reign on top at Singapore Business Review Awards 2019

OPINION 64 Adapting to the world of cloud

For the latest business news from Singapore visit the website

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

MANUFACTURING

Dyson to hire 2,000 workers in Southeast Asia British appliance maker Dyson is hiring over 2,000 people across Singapore, Malaysia and the Philippines over the next four years, following its decision to relocate its head office to Singapore. It plans to add hundreds of jobs in Singapore alone, according to JonPaul Pritchard, Dyson’s global head of talent acquisitions, on the sidelines of the Milken Institute Asia Summit in Singapore on 20 September.

FOOD & BEVERAGE

Lendlease Global Commercial REIT prices IPO at $0.88 per unit Lendlease Global Commercial REIT sought to raise up to $1.03b through the sale of over 1.16 billion units. Of the total units to be offered, 364.74 million were offered via international placement to investors in Singapore, 13 million were reserved for subscription within the company, and more than 22.72 million units were made available to the Singapore public.

AVIATION

Rail cost hike could hit ComfortDelGro’s earnings ComfortDelGro’s (CDG) earnings may take a hit from higher maintenance costs in its rail operations, as well as the continuous competitive pressure in the taxi business, according to an analyst report by RHB. The expected improvement in profitability brought by the 7% fare hikes may be countered by higher maintenance costs, related to mid-life refurbishments to be undertaken at the North-East Line.

MOST READ COMMENTARY Singapore stands tall as beacon for rattled Hong Kong businesses BY SATISH BAKHDA From Tara Joseph, president of the American Chamber of Commerce in Hong Kong, “The real concern here, which we’ve seen slight signs of, is that people are moving their companies and their money in greater numbers to Singapore.” One Hong Kong tycoon has already shifted over $100m from Hong Kong to Singapore, and several private banks have reported a trend of a shift of wealth out of Hong Kong.

6 6

SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019 SINGAPORE BUSINESS REVIEW | DECEMBER 2019

Executives in Singapore need to boost their digital skills and learn a local language to stay ahead BY NICK JONSSON As the competition for top jobs intensifies, executives in Singapore need to focus on improving their digital and language skills. 70% of digital initiatives do not achieve their goals, and whilst there are many reasons for this, a common issue is the failure to take a holistic approach and create a truly digital culture at firms. Changing a company’s culture is always more effective when it is led from the top.

For Singapore’s businesses tomorrow, it’s AI vs. AI BY JEFF HURMUSES All these advancements are very optimistic and I truly believe that AI can change our society in a very positive way. But there are always two sides to every coin, and we need to be ready to handle both. That’s why we need to identify the potential risks of AI, employ the best possible practice and management, and prepare for its consequences in advance.

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SERVICES

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OPPORTUNITIES

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SINGAPORE BUSINESS REVIEW | DECEMBER 2019

FIRST concepts, prompting more bubble tea stalls to pop up and burst into the scene recently. “At around $5 a cup, this is definitely for the mass market segment. We believe the attraction of bubble tea kiosks lies in the market’s high acceptance for bubble tea beverages, low floor area required to operate these outlets (about 150-200 sqft), low capex of $100,000-250,000 relative to restaurants, and lower depreciation and breakeven. Operating margins can be in the double digits, which makes such businesses attractive. New brands in the market include R&B Tea, Tiger Sugar, and Nayuki.” The attractiveness of the mid-price food brands has encouraged a splurge of investment and consolidation. Recent acquisitions include BreadTalk’s $80m takeover of Food Junction and NTUC Enterprise’s acquisition of Kopitiam, the latter bringing more than 100 outlets under the NTUC umbrella. Not to be left out, in 2018 Broadway bought over 23 S-11 coffee shops.

BreadTalk is one of the QSRs winning at the game.

Michelin for show, fast food for dough

Mall rats proving a juicy treat for F&B fat cats as fast food booms.

or a nation that loves its rankings and loves its food, the intersection of these two passions in the form of the annual Michelin awards is rightly a national obsession and a keenly followed spectator sport. But winning an award is no guarantee of commercial success, as the closure of Singapore’s only three-Michelin-starred establishment, Joel Robuchon Restaurant, and two-Michelin-starred Restaurant Andre in 2018, could attest. Nor is the real success of Singapore’s food business to be found in its famous hawker centres. Instead, look to the malls, where the rise of the quick service (think Toast Box) and fast casual (think Sakai Sushi) brands are eating up an ever larger share of the total food pie, reckoned to be worth $8.4b annually. Kiosks over restos A report by Euromonitor suggests limited concept and street stalls/kiosks will grow at a five-year rate of 2.8% and 2.7% YoY, respectively, from 2018 to 2023, the fastest across all F&B formats. Conversely, the revenue of full-service restaurants, the stuffy types with white linen and an actual waitress who takes your order, has remained relatively flat. The change can be seen in a 2018 survey which showed that 64% of respondents 10

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

highlighted their preference for dining out at a café—a sharp rise from 18% in 2015. Unsurprisingly, noted DBS analyst Alfie Yeo, cafés, coffee houses, and food kiosks were amongst the fastest growing F&B categories, increasing 21.6% over a two-year period to reach a total of c.3,750 establishments as at end-2017. These casual and quick serve outlets typically charge under $20 per head—a sweet spot given Singaporeans’ demographic profile, which DBS believes is set to remain a strong growth proponent for the mass market segment ahead. Another indicator of such growth in the mass market segment is how operators are jumping on the bubble tea bandwagon. Yeo added that prospective double-digit operating margins are on offer for these lucrative kiosk

Pop-up party The lowest cost of entry into Singapore’s expensive food market is with the pop-up concept, backed by a healthy social media campaign to drive foodies down for a try before it pops down again. If unsuccessful, then the outlay has not been large. If it works, it sets the scene for rebirth in a more permanent location. Famous Taiwan bubble tea store, Xing Fu Tang, is one such example. After gaining much fanfare at its temporary pop-up at Orchard, noted Yeo, the bubble tea chain announced the opening of its first standalone franchised store in Singapore at Century Square Mall, which sits in Tampines (Outer East region). Similarly, A&W, which has returned to Singapore after a 16-year hiatus, set up an outlet in Jewel in April 2019 and announced plans to open its second outlet at Ang Mo Kio—a prominent submarket in the northeastern part of Singapore.

Mass market F&B to be worth $6.2b, boosted by high growth of kiosks

Source: Singstat, DBS Bank

FIRST NUMBERS

KIOSKS, CAFÉS MUNCH AWAY AT SINGAPORE’S FOOD RETAIL PIE

Source: Euromonitor, DBS Bank

McDonald’s: Singaporeans still lovin’ it

cDonald’s remains the favourite option for Singaporeans, who are 38% more likely to visit multiple fast food chains compared with Australian and Western consumers, according to research from Blis. The study found that local hawkerstyle franchises are Singapore’s second favourite option behind the fast food giant. Traditional QSRs, on the other hand, get the preferential treatment from having menu options across meal times and with added variety. However, Singapore-based QSRs have an average exclusivity (single loyalty to a QSR) of 26%, compared to an average exclusivity of 57% in the US, 50% in Australia, and 33% in the UK. The research, called “Real-world intelligence: how the world eats”, examined the behaviours of more than four million mobile device signals seen in McDonald’s, Burger King, Subway,

KFC and Domino’s in Singapore, Australia, the UK and the US. “Today’s consumers live in a post-truth world. From high-profile political campaigns to social media posts – what we say and share with the world is not always a reflection of our actual lives. For marketers and brands seeking to build consumer loyalty and engagement and to drive foot traffic and sales, it is a mistake to rely solely on these curated versions of consumers presented online,” Blis CEO Greg Isbister said. The research also indicated that the meal kit delivery market, which includes Uber Eats and Hello Fresh, is expected to double over the next five years, reaching US$14.1b by 2024, whilst the on-demand delivery service market is also expected to grow from US$2.5b in 2017 to US$8.94b by 2025. Blis drew data from more than 2.5 million consumers in 133,000 locations.

Source: Blis

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

FIRST AMBASSADOR BRIEFING AUSTRALIA

Bruce Gosper

ingapore and Australia are now exploring deeper ties in the digital economy. Singapore Business Review spoke with Australian High Commissioner Bruce Gosper, who talked about business opportunities between the two nations and upcoming avenues for collaboration. What were your postings before you became the High Commissioner of Australia to Singapore? Prior to Singapore, I served overseas as Ambassador and Permanent Representative to the World Trade Organization (WTO) and Chair of the WTO Dispute Settlement Body and the WTO General Council in Geneva. My previous overseas postings include Washington and Tokyo. In between postings, I spent about four years as Chief Executive Officer of Australia’s Trade and Investment Commission (Austrade) so have a strong appreciation for the importance of Australia’s business and trade relationship with Singapore.

Alex Boulton, Bain Capital

Corporates challenge VC’s for deals

raditional venture capital (VC) firms may feel the heat from their corporate counterparts who are snapping up deals in their bid to back the most promising companies in Southeast Asia. According to Bain Capital, 28% of deals in 2018 involved a corporate investor, up from only 9% in 2016. Alex Boulton, a member of Bain Capital’s financial investor team, talked to Singapore Business Review about the reception towards CVCs, their struggles against VCs, as well as the direction of the investment environment in Singapore and Southeast Asia.

What are the opportunities for Singaporean businesses in Australia? Singapore’s investment in Australia is substantial. At A$98.9b in 2016, up from A$98.8b in 2015, Singapore was ranked sixth overall as a source of foreign investment in Australia. Singaporean investment has traditionally been concentrated in real estate, but has become more diversified in recent years. An area that is ripe for increased collaboration between Australia and Singapore is the digital economy. In June this year, during Prime Minister Scott Morrison’s visit to Singapore, he and Prime Minister Lee Hsien Loong announced that our countries would explore this collaboration further. A scoping exercise is underway and expected to conclude in October.

What kind of impact do you see CVCs having in 2019? In which areas are they competing effectively against traditional VCs and in which are they not? Strategic investors have been a staple of the private equity buyout ecosystem for years. Corporate investment is ramping up across the investing landscape; 28% of all deals in Southeast Asia involved a corporate investor in 2018, up from only 9% in 2016. The reception of CVCs has been just as mixed; however, since many favour minority/ growth stakes for their option value they have quickly become a coveted partner for traditional VCs during the investment hold period. CVCs compete well in sectors that provide natural synergies with their core business though, it should be noted, often struggle to go head-to-head with traditional VCs outside their synergy halo.

Any business events that Singapore companies can get involved in? The Australian High Commission in Singapore is planning a Digital Economy Forum in October 2019 to drive this collaboration further and explore new and enhanced partnerships.

So far this year, have the financing gaps for different funding rounds and types eased or worsened? How do you see this particular challenge evolving in the near term? Southeast Asia financing gaps are fast closing across the board, on the back of

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

unprecedented levels of VC funding. In our 2018 Bain brief, we predicated 10 new unicorns by 2024, and it appears this projection was not optimistic enough. According to DealStreetAsia, SE Asiafocused VCs raised new funds totalling US$1.5b in 1H2019 – it only takes one $100m check for a 10% stake to birth a unicorn. In past years, we have seen gaps at the series B funding level, but 1H2019 has offered a quick response to this with the close of a flurry of series B investments. What are the most notable VC deals so far in 2019? What made these deals notable in terms of scale or structure? It was particularly exciting to see Biofourmis raise US$35m in its series B round this year, after a US$5m series A in December 2017 with Openspace Ventures, Aviva Ventures, and SGInnovate. A Singapore-based health analytics startup that is building an AI-powered digital therapeutics platform, Biofourmis is a case study in the success of the Singapore VC ecosystem to spawn globally disruptive business models. How is the Singapore VC environment evolving compared to the rest of the world? Ambitious startups have needed to define their addressable markets more broadly, to include Southeast Asia, Asia Pacific and even global aspirations. This historic disadvantage is beginning to work in favour of SG-based startups as they prioritize global opportunities and design business models that work across borders from a much earlier stage. 2019 and 2020 will continue to be marked by the rise of globally competitive startups that have been incubated within Singapore’s VC ecosystem.

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

STARTUPS Proptech startup UrbanAgents matches buyers to elite agents

Michael Cho

ould-be home sellers now have a new way to find the best selling estate agents in their area with proptech startup Urban Agents. The firm uses AI to comb sales records and only onboards the top 5% of Singapore’s estate agents, then forwards seller requests to the agents. In July, UrbanAgents secured $2m in a seed round led by FarSight Capital, APAC Realty and angel investors. Michael Cho, founder and CEO of UrbanAgents, noted that Singapore’s top 11% agents alone handled more than 80% of HDB transactions in 2018, according to data from Council for Estate Agencies (CEA). UrbanAgents would argue that it stands to reason that if you want to sell your home you will get the best result with the best performing agents. Commission scale Sellers can also save on commission, with sellers able to negotiate a sliding scale rather than a fixed percentage with their agent. It works by using artificial intelligence (AI) to set the agents’ target price for properties and if the agent fails to reach the said price their commission will be less. The minimum commission fee is $1,888. Cho said agents receive little incentive to “to the distance” in order to achieve a higher price for the client under a fixed commission regime. “We do this by, first, curating a select group of top agents based on data, and then pegging their commissions to actual performance (i.e., final sale price) so that the agent is highly incentivised to achieve the best possible price for the home seller,” Cho said. “We qualify the incoming home seller leads and pass the legitimate leads on to the agents.” The startup charges marketing fees to agents when they have completed a sale. TK Wong, the managing partner of FarSight Capital, believes that UrbanAgents will be a highly sought after service. “Urban Agents, together with its AI-powered UrbanZoom instant property valuation engine, are driving an AI-first model to building the next generation prop-tech companies. We believe it’s a very big idea, where data and AI will deliver a 10x more precise and better buying and selling experience for property owners,” Wong commented. “I think this idea is highly disruptive and unique in contrast to the ‘many listings’ model we see on the market today,” Wong said, adding that the valuation engine is accurate to less than 2.4% median error, allowing the platform to make recommendations objectively.

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

Pencil wants AI to brainstorm ads for advertisers and businesses The other set looks at everything that’s been generated and tries to pick out what’s most relevant for a given brand or audience. It also takes into consideration what’s most likely to deliver against marketing objectives. “We’ve also chosen to tackle creativity head on, which feels subjective and out of reach for many AI teams,” he added. Will Hanschell and Sumukh Avadhani “We’re a creative AI company. Most an a computer design an adtech focuses on targeting consumers—we advertisement? This is the plug into the adtech ecosystem, offering question that AI creative AI-generated content at incredible scale. platform, Pencil, seeks to answer. This is exactly what’s been missing from the Pencil’s AI software as a service (SaaS) ecosystem for some time,” Hanschell said. platform has two sets of algorithms The startup makes profit by charging built on the explosion of generative e-commerce businesses, brands and AI techniques over the last few years. agencies a monthly fee to access the AI SaaS takes a learning machine platform. Its famous clients include model that has been trained to do a Sephora, Unilever, Kellogg’s and WPP. specific activity, in this case, generating In May, Pencil secured $1.66m in a advertising content including text and seed funding round led by Wavemaker visual designs. Partners, together with SGInnovate, Will Hanschell, co-founder and CEO Entrepreneur First, and the Xoogler of Pencil, explained that its first set of Angels. Hanschell said that they plan to algorithms takes a brief, as well as words use this to build their core engineering and or imagery, and experiments with it. customer teams in Singapore.

Here’s how Syfe made investing cheaper Arora said. Syfe uses automated risk-managed investments (ARI), which is said to be a combination of two investment approaches, Global Market Portfolio (GMP) and Risk Parity Portfolio (RP). GMP is an investment approach where investable Dhruv Arora asset classes are classified by market cap intech startup Syfe is looking to offer whilst RP focuses on risk impact. retail investors low-cost investment tools Last July, Syfe secured US$5.2m in a in a market where sales charges and seed funding round led by London-based exit fees can hit 2-5%. CEO Dhruv Arora venture capital company Unbound VC. said investors would pay an annual fee “The risk is raising money from investors comprising 0.65% with no hidden fees and who do not understand the domain or sales commissions included. have the goal of doing a ‘quick flip’ with Investors who want to use the platform their investment. Such marriages almost will have to get through a risk profiler, which always fail,” Arora said. will then allow them to be matched to their Shravin Bharti Mittal, founder and corresponding risk level and recommended CEO of Unbound VC, added that they risk level. If the user is comfortable with invested in Syfe because they shared the the recommendation, Syfe builds and same sentiment on the lack of disruption invests in a customised portfolio which is in the financial services industry. “We truly constantly monitored. Clients are in their believe the problem Syfe is solving is highly mid-30s to early 40s with varied professional disruptive and transformational for the new backgrounds, most of whom have degrees generation,” Mittal said. in business, IT, or engineering. Unbound VC also added that Arora’s “If my years as a trader have taught me experience as senior VP of India-based one thing, it is that returns cannot always be online grocery delivery service Grofers gave forecasted, but risk can be predicted. You will them the comfort that he had the right see this theme throughout our platform,” background to tackle this problem.

STARTUPS

This startup makes air-purifying paints to curb indoor pollution

Lester Leong and Ryan Lim

rowing awareness of indoor pollution has created an opportunity for paint maker gush to launch a range of environmentally friendly paints. To date, gush paints have been used in over 600 residential and 60 commercial projects in Singapore, including the delivery rooms in Thomson Medical. Co-founders Lester Leong and Ryan Lim, who both suffered from asthma and allergic rhinitis at a young age, gained thoughts on starting the business when the haze from Indonesia in mid-2015 got worse. “At that junction, the solution was air purifiers and N95 mask. To be honest, I’ve had close to seven to eight air purifiers at that point of time. Ranging from <$100 to more than $1000 over. Purifiers are big, bulky, consumes electricity and worst still, the filters are expensive,” Lim said. Leong and Lim say that gush cair interior paint can purify the air by eliminating 99.9% of bacteria, regulate

To date, gush paints have been used in over 600 residential and 60 commercial projects in Singapore, including the delivery rooms in Thomson Medical.

humidity and prevent mold. They also stated that it has no volatile organic compounds (VOC) and releases negative ions which have health benefits such as neutralising free radicals and promoting blood circulation. “Shockingly, indoor air pollution can actually be up to 3-5x worse than outdoor air pollution. This is largely the result of the application of adhesives, and traditional building materials which can drastically increase the exposure of occupants to VOCs, as well as environmental sources whereby high temperature and humidity levels can increase concentrations of airborne pollutants such as mold,” they added. In July, gush secured $3m from Singapore mainboardlisted property group City Developments (CDL) in a pre-series A round which it seeks to use for R&D to explore new advanced building materials and branch out to other verticals beyond the building and construction industry.

How Thunes makes payments easier for emerging markets

oving money from one payment account to another system is a problem fintech startup Thunes aims to solve. In theory, the system would enable a user to send money from a PayPal account to another system such as Alipay, with Thunes acting as the middleman and brokering the transaction. Thunes promises to connect payment systems in more than 80 countries involving 60 currencies. In May, they secured $13.86m in a series A funding round from GGV Capital and expect to grow to 100 employees by the end of 2019. Thunes CEO Steve Vickers cited an example where the startup was able to connect PayPal solutions with Kenya-based money transfer platform M-Pesa. Previously, M-Pesa mobile wallet users could not input their funds directly into a PayPal account. Using API technology The platform harnesses application programme interface (API) technology which makes transactions faster, cheaper and reach places that are hard to get. They offer four payment solutions, which are P2P remittance processing, mass payouts, digital payment and business payments services. Thunes charges on a fee basis per transaction and is also able to earn small increments on the FX spread. “We plan to expand our reach in the next 12 months with our Series A funding. Payments systems Thunes connects to include Western Union, LendMN, MTN Zambia, EcoCash, Orange Botswana, and Singtel,” said Vickers. “Given the existence of multiple payment platforms, it only made sense that a payment network that could facilitate and handle high volumes of transactions across borders and different payment methods was required. Hence, Thunes’ unique offering with their B2B cross-border payments network appealed to us,” said Jenny Lee, managing partner at GGV Capital.

Steve Vickers

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

STARTUPS The idea is that Trax means “to track a movement and pay attention”. There are two founders. I come from a technological background and worked for many years before moving on to being an entrepreneur. The other co-founder, Dror Feldheim, came from a retail execution background. He came up with a business idea of what needs to be sold. He was working for many years for a private equity in Europe that’s invested in a consumer brand. That is where he learned around the hunches regarding product placement and thought of how to make them more effective. When we met, he came up with the idea and I came up with technological solution. This is how Trax came to life. What is your edge against other digital and image recognition companies? Image recognition is a very broad space. Often Trax co-founders Dror Feldheim (CCO) and Joel Bar-El (CEO) than not, people look at image recognition and think of it similar to facial recognition technology. In reality it’s not. We are tackling an area within image recognition called fine-grained recognition, which is the ability to identify a unique item out of many similar oftware and analytics firm Trax aids Joel Bar-El shares how the company grew from items. For Trax, we have 5,000 combinations to retailers in ensuring that their product its goal to provide transparency in retail shelves identify a product, because no product looks like shelves are stacked and positioned to becoming the city state’s second unicorn. another product. We have different materials with pristine accuracy. This comes urgent as such as tin, paper, glass, and plastic coming more retail firms, pitted against 50,000 larger What is Trax all about? What problems do in different shapes, coming in different sizes, supermarket brands, are at risk of losing US$1t your products and services solve? standing on the shelf in different permutations, due to out-of-stock products. Trax is offering a Trax is solving a very broad problem within and we need to identify them from all sides. set of specialised software for both brands and the retail industry and introduces transparency So arguably this is 5,000 times more difficult retailers to help track the performance of their into brick and mortar stores. Before, companies than face recognition. And unlike faces of products. were selling their goods by retailers but with humans, whose structure do not change almost Founded in 2010, Trax utilises fine-grain no real visibility—that is, what is happening in at all, in retail 30% of the physical look of the image recognition to identify and track the the store itself, where the products are located, products on shelves change every year. So availability of around 5,000 different products which adjustments they need to have in terms traditional image recognition companies find in brick-and-mortar store shelves. Using of competition around them. Usually, they it extremely difficult to solve the problem that 5,000 different combinations, Trax identifies arrange the placement to a standard. we have solved. In Trax, we cannot do face more than 250 million products monthly We try and provide full transparency by recognition. But we can identify any product on and provides real-time data to more than 170 digitizing retail shelves in brick and mortar any shelf in any store. retailers and brands worldwide. stores, and we were the first pioneer company Global brands such as soda giant Coca-Cola, to do that and today, we are the global market You’ve made a string of acquisitions in the the world’s largest food company Nestle, and leader for that. There are few small companies past years including Shopkick, a customermultinational brewer Anheuser-Busch InBev who are trying to do the same and they are tracking service app; LenzTech, a Beijing count among its patrons. Today, the firm traditional auditing companies who are doing computer vision service provider. You are operates in more than 50 markets globally and it manually without digitization, which is the also reportedly in the works to buy another has 10 subsidiaries. innovation we are bringing to the table. European competitor. What advantages do In July, the firm raised $137.5m in its latest We are eliminating around 60% to 80% of these acquisitions offer to Trax? funding round, propelling its valuation to as the time of manual auditing method. And we Each one of them represented a different much as $1.3b and effectively sealing its status are capturing around 10 times more data than a strategic value for the company. The acquisition as Singapore’ second billion-dollar startup. human person can do at the same time. of LenzTech helped us gain an R&D Center in The company aims to use the proceeds from China which we have wanted to have for a long the funding round to deepen its penetration What’s the story behind your name? How did time in order to better serve the Chinese market through Trax Retail Watch, a product that you start your business? in their own local language and their own enables retailers to install cameras in a store. In an exclusive interview with Singapore “We can definitely confirm that we are planning to do Business Review, Trax CEO and co-founder

How Singapore’s second billion-dollar startup is revolutionising retail

an IPO in the US in the next 18 to 24 months.”

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

STARTUPS local UI practices. It also helps to have a better footprint in China and since LenzTech was our former competitor. Planorama was a direct global competitor. The acquisition helped us in terms of solidifying our leadership position in the global market as well as gaining additional clients and employees. The acquisition of Shopkick helped us tap into the crowdsourcing area together with Quri, which we bought in early 2018. In the US alone, there are over 2 million crowdsources which we engage and track on a daily basis and we aim to develop our ability to take the data that we are gathering in the brick and mortar stores and turn them into data that crowdsources can act upon. This is part of our future promise.

As a public company, we believe that we will be easier for us to attract talent into Trax. We also think this will reposition Trax in a virtual way to negotiate larger and more expansive contracts with our existing clients. With all the credibility from the government that comes with being a public company, we believe it will also give us the ability to more easily acquire other businesses because as a public company, your shares can be used as currency to make such acquisitions. We also believe that going public will help us to get better exposure from the global media. How do you feel about being tagged as Singapore’s second unicorn? Our aim is not to become Singapore’s second look unicorn to begin with. We merely aim to grow the company further: we service our clients in the best way possible, and disrupt the industry into a new age of digital retailing. Like any company that grew from being very small to the size we are today, there are a lot of hardships around managing a lot of people in different geographies. I think that was the biggest challenge for Trax. I would say overcoming those differences of timezones, cultures, and different people working in different places was the greatest challenge of all.

government’s willingness to help the startup economy. That is, in the way of grants in production and other means that the Singapore government is lending a hand.

The company is setting its sights to China next. What are your future plans and how do you see Trax developing in the next five years? China is the second largest market in the world when it comes to retail after the US. When it comes to retail, the Chinese market is highly fragmented; there are multiple chains in multiple cities. All of that makes it a very good market for Trax to come into, and also to help those retailers continue to compete domestically and become more efficient as they face the fierce competition in China. In the next few years the first thing Trax should be doing is becoming a public company. What prominent technologies will Another thing is that we are going to enhance characterise this shift and how do you plan our solution to tap into consumers as well. We to stay ahead of constant disruptions in the always saw the retail industry as an industry retail sector? that belongs to three major parties: these are the We are working constantly to improve our brand, the retailers and the consumers. Today, products. Today, a significant portion of our we are providing complete solutions for brands budget is dedicated specifically for innovation. and retailers. One of the areas we would like We have been over 200 developers and to expand into is to take the data that we are about 40 of them are working only on new gathering within retail stores and place it in the innovation and developing new capabilities and hands of consumers. new algorithms. How would you describe Singapore’s current We have two main ways to do that. One startup landscape? What advice would you is allowing navigation within the retail stores The company also has an existing give to startups? for consumers. We’ve developed our own partnership with Nielsen that aims to ‘digitise The main advice I can give to new startups in equivalent of a Google map, so every brick and the shelf.’ Can you elaborate on this? What Singapore is first, to leverage the vast economies mortar store will be completely mapped and are your plans to take this further? that are surrounding Singapore which can give people can navigate through it to find what Nielsen is a very important partner of Trax. early adoption clients to them, mainly Indonesia, they’re looking for. The second one is interaction We have a specific program which we have being a prime one. There are also Thailand, and with the product. We have the augmented developed together with them called the Trax- the Philippines, in the Southeast Asian region. technology to allow consumers to filter the Nielsen Shelf Intelligence Suite. The second advice I can give them is to always product in front of them when they’re shopping Essentially, with Nielsen, we are measuring think global: try to position their company into so their lifestyle preferences, allergies, dietary complete markets on a syndicated basis. We the global market rather than trying to focus on restrictions are taken into account and they can are capturing the information from a sample solving local problems and try to generalize that see what is gluten free, what is the non-meat source and providing a dashboard to our clients solution to feed into global markets as well. region, or if it’s good for their cholesterol or heart so they can monitor the performance of their Thirdly, they should leverage the Singapore conditions, the like. By Frances Gagua markets and their brands. Reports said that Trax is eyeing an IPO in the US within the next 18 to 24 months and exploring the possibility of a dual listing in Singapore. Can you elaborate on this? We can definitely confirm that we are planning to do an IPO in the US in the next 18 to 24 months. With regards to the potential listing, this is still under discussion. We have not yet completed the analysis for such an option. With regards to the advantages of being a public company, we think that it will help Trax continue its expansion and growth within the public market mainly by acquiring or absorbing more talented and experienced US employees.

Trax team in Singapore

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

INDUSTRY INSIGHT 1: LUXURY HOMES

Boulevard 88

Luxury homes flourish amidst renewed vigour from ultra-rich foreign buyers Transactions are back to pre-2007 crisis levels as billionaires hedge for potential losses amidst uncertainties.

allich Residence’s triplex super penthouse for a record-breaking $73.8m to Sir James Dyson, UK’s richest man and founder of the British manufacturing name. Just two weeks later, Dyson purchased a hilltop Good Class Bungalow (GCB) with views of the Botanic Gardens for $41m. A $114m buying spree done in a fortnight might look like an aberration were it not for a number of other breathtaking purchases, as seen by the sprawling 84,543 sqft GCB plot in the prestigious Nassim Road area that went for a record $230m ($2,721 psf). Whilst the buyer is reported to be trustee company SG Casa, media has speculated that the buying party was Eduardo Saverin, Facebook’s co-founder. Dyson and Saverin are amongst the more prominent ultra-rich individuals looking to own one of their own luxury properties in Singapore, but they are not alone. Foreigners bought over 254 private homes in April to June 2019, up by 46% from the 174 units made in Q1, Colliers’ latest figures showed. “We are still not back to the run-rate before the property curbs a year ago, but the numbers are recovering,” Song said. April to June 2019 alone recorded 139 transactions for properties worth more than $3,000 psf—a number that has not been seen since 2007 before the Global Financial Crisis, according to Savills. Cushman and Wakefield also reported 18

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

that foreigners bought 200 units priced at $4m and above between July 2018 when the cooling measures were first announced and up until June—a slightly better number than the 190 units transacted in the preceding period.

Leong Boon Hoe

Ong Choon Fah

Stocking up for losses For a time, foreigners stepped away from making property investments after the government imposed the cooling measures which increased the Additional Buyer’s Stamp Duty (ABSD) rates by 5 ppt to 20% for foreigners buying property in July 2018. Only 297 units were sold to foreigners from August to December 2018 compared to the 1,552 units sold in 2017. This was reversed when sales of apartments priced more than $5m rose by 23.25% to 175 units in H1 2019 compared to the 142 transactions in H2 2018, according to Leong Boon Hoe, chief operating officer of List Sotheby’s International Realty (List SIR), Singapore. The growth in figures comes as no surprise as Singapore is the secondmost preferred luxury residential market by ultra high net worth individuals (UHNWI) in APAC and counts amongst the top six globally. About 23% of Asian UHNWIs, or almost 2 in every 5, and 8% of Australasian UHNWIs said that they prefer to buy a home in the island-city, reported Knight Frank.

INDUSTRY INSIGHT 1: LUXURY HOMES “That foreign UHNWIs are willing to pay a hefty duty to buy residential properties here would mean that the price of political serenity is worth more than the 20% duty,” said Alan Cheong, executive director of research and consultancy at Savills Singapore. “This correlation probably manifested itself when global and regional political tensions mount. Unlike the UHNWIs of the past who bought to preserve their capital, the recent group of UHNWIs are buying for personal and family security and peace of mind.” But they aren’t lining up to buy properties in Singapore for its tranquility—they’re also bracing up for potential losses, especially affluent Chinese investors. “The strong interest from Chinese investors could be attributed to the stability of Singapore currency as a hedge against the impact of the US-China trade war on the Chinese yuan,” noted Sze Teck Lee, director and head of research for Huttons Asia. A notable number of affluent mainland Chinese are flocking to the city. Of the Chinese’ total transactions located at the Core Central Region (CCR) in Q2, 22.6% were for new nonlanded homes and 43% of home resales were worth at least $5m, said Orange Tee & Tie. This stability also plays favourably for foreigners’ work interests. “The rise of the technology, media and telecom (TMT) sector are attracting many companies to set up their HQ in Singapore and move their top talent here,” Huttons’ Lee added. In fact, Dyson moved his headquarters from the UK to Singapore in the heat of Brexit blues, and also for business reasons, having embarked on an ambitious plan to build an electric vehicles for Singapore, with a launch set at 2021. More than 9 in 10 Hong Kong businesses echoed similar sentiments when they chose Singapore as their top choice to relocate operations and capital to, as revealed by a recent survey of the American Chamber of Commerce (AmCham) Singapore. Homes as trophies Rich foreigners aren’t just looking for any home though— they want iconic or trophy assets. “Housing demand from rich foreigners has become more selective,” said Christine Li, head of research at Cushman and Wakefield Singapore. “High net worth individuals usually buy homes in the traditional prime districts namely 9, 10 and 11. The exclusivity and prestige that are associated with such Ranking by sales volume of non-landed homes

Source: URA, OrangeTee & Tie Research & Consultancy

Christine Li

Alan Cheong

Sze Teck Lee

Tricia Song

Ong Teck Hui

localities are often what HNWIs look for.” Interest is concentrated in the CCR, with properties costing from $4m or $5m upwards. List SIR reported that of the 169 luxury transactions in the CCR, foreigners and PRs made up 70% of the buyers, compared to 66% and 61% in H2 2018 and H1 2018 respectively. World class architects like Moshe Safdie, the man behind icons such as the Jewel Changi and MBS, are now turning their talents to more plebeian housing projects albeit with luxury price tags of $3,650 per square foot (psf). His Boulevard 88 project on Orchard doesn’t seem to have any problem finding buyers even with the lofty price talk, as it had already sold 78 out of its 164 units, with the latest purchase made in October. Of the units sold, 36 were priced over $10m, including a penthouse priced at $5,125 psf or a whopping tag of $31m. “This is the highest psf price transacted since TwentyOne Angullia Park’s penthouse in June 2013 which sold for $5,560 psf ($42.9m in total),” Tricia Song, Colliers International head of research for Singapore, told Singapore Business Review. The 28-storey twin residential tower is reminiscent of Marina Bay Sands with its own Infinity Sky Pool and Sky Lounge. To seal that luxury home living for the price, units are furnished with wardrobes from Italian designer home furniture manufacturer Caccaro with Van Gogh accent marble, whilst the kitchen area is equipped with cabinetry from Italy’s Ernestomeda Icon series. Armed with these features, the joint development between City Development Limited (CDL), Hong Leong Holdings and LEA Investments successfully bewitched its target market, according to Song. Boulevard 88 was also deemed the most in-demand high-end project in the first half of 2019 as it accounted for 65% or 50 of the 77 units sold above $5m, revealed Ong Choon Fah, CEO and head of research and consulting at Edmund Tie & Company (ETCo). Boulevard 88 isn’t the only luxury project that had buyers abuzz, as New Futura, designed by Changi Airport 3 architect SOM, sold 113 of its 124 units at a median price of $3,470 psf. JLL Singapore senior director of research Ong Teck Hui noted that a 728 sqm penthouse fetched the highest price of $36.28m at $4,630 psf. The 36-storey residence boasts of an infinity lap pool, aqua beds, cabanas, and a dual level club house. “They prefer the neighbourhood close to the Orchard Road shopping boulevard and the neighbourhood close to the Botanic Gardens,” said List SIR’s Leong. “In the new prime districts, these will be Marina Bay, Tanjong Pagar and Beach Road which are in the Central Business District, and Keppel Bay and Sentosa Cove which are the waterfront locations.” More new luxury projects near Orchard Road are expected to be launched in H2 2019 and may test the market with new benchmark prices, added Leong. Key projects to watch out for include EDEN by Hong Kong developer Swire Properties, which features private vertical landscape gardens, and Cuscaden Reserve, by a joint venture involving SC Global, Far East Consortium and New World Development. SINGAPORE BUSINESS REVIEW | DECEMBER 2019

INDUSTRY INSIGHT 2: OVERSEAS RETURNEES

Overseas returnees hit with job mismatches

Singapore’s returning expats are getting local “plus” salaries but many still struggle to fit in after a stint abroad. Grant Torrens, regional director of Hays in Singapore. “This is particularly apparent in popular destinations for Singaporean migration such as Australia, UK, and the US where work visas and immigration rules are tightening, whilst the economy of superpowers are declining.”

40% of the returnees are unhappy with their new roles

hen Zhuang* first returned to Singapore after working as a retail professional in Australia for almost a decade, she was dismayed at the lack of work-life balance at home. “We work extremely long hours. I can hardly do activities outside work just to keep up. And the pay is definitely smaller. The contrast was so great, I was trembling at the end of my first week back here,” she shared. Zhuang is not alone in her disappointment. A report by Hays revealed that a staggering 40% of Singaporean returnees are dissatisfied with their roles, mainly due to a mismatch of skills to jobs or roles available. Almost half of returnees also cited unsuitable remuneration and unfamiliarity with local job market conditions as hurdles to their job search. “Depending on where the candidate is returning from the US, UK or even Hong Kong, in most cases the candidate will need to accept a marginally lower overall package,” noted Andie Rees, managing partner, Southeast Asia at Odgers Berndtson. “If they have come from Western countries, they may not get as many headquarter opportunities as they had previously. This applies to both MNCs (very few have global functions here) and with local companies (which do not have the level of corporate sophistication in their HQs like MNCs do),” he adds. “Whilst skilled Singaporean professionals are most open to working abroad compared to their counterparts across Asia, many are realising that greener pastures do not necessarily exist overseas,” said 20

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

40% of Singaporean returnees are dissatisfied with their roles, mainly due to a mismatch of skills to jobs or roles available

Mismatched expectations Almost a third of Singaporean returnees expect an increased salary upon returning home, whilst 45% are willing to receive the same remuneration as when they were overseas. However, about two-thirds of employers are unable to secure returning Singaporean talents due to a mismatch in expectations of offer packages. “When compared to the rest of Asia, Singaporean overseas returnees have more realistic salary expectations. In the course of our report, we asked overseas returnees, ‘What were your salary expectations for your first job back in the country/region of your birth?’ The majority said they expected to ‘earn a salary equivalent to what they were earning overseas’, while 32% expected an increased salary from what they were earning overseas,” said Torrens. This is why to attract returning workers, some companies are now offering enhanced salary packages for Singaporean returnees. “There is an increasing trend of ‘enhanced local’ package whereby the returning employee gets a higher salary than a ‘pure local’ (someone who has not worked overseas) but not the full expatriate salary that they had previously been given,” Rees highlighted. However, returning workers shouldn’t expect a generous salary bump. Data from Hays show that whilst over half of employers are willing to offer returnees a salary package higher than that of their peers, only 22% would give 11% to 25% more. Almost a third are keen on providing up to 10% more. “Higher salary or benefits are not related to just having worked overseas, where the years itself would not solely count for everything. Companies are willing to pay extra for additional experiences and skills learned relevant to them, i.e. you come back with better communication skills, stronger understanding of working in a foreign environment, additional skills learned in a different marketing/sales/HR/operational setting, etc. There are also companies which offer no extra perks for returning Singaporeans,” Rees cautioned. Filial duty calls Over half of overseas Singaporean workers choose to return in order to be closer to family. “Our report found a variety of reasons why Singaporeans move back home, but the top reason voted by nearly half of our respondents (45%), was to be closer to their families. This was followed by factors such as ‘the opportunity to progress and develop [their] careers’ (29%) and ‘the

INDUSTRY INSIGHT 2: OVERSEAS RETURNEES culture and lifestyle in their home country or region’. The least cited reason was to ‘start their own businesses’, cited only 3% of respondents,” Torrens said. “Family is the most common reason that drive workers back to Singapore. This includes immediate family adaptability to the country of employability, ageing parents back home or children entering primary school,” Rees explained. “Accelerating one’s career back in Singapore is another reason for returning home after gaining international working experience.” Rees added that there are cases where the families themselves do not adapt well to living overseas. “It is not uncommon to see families relocate back here with the father working overseas. Some fathers return after one to two years back to their families. A personal friend has returned after working in Hong Kong for three years as the mother felt Singapore is a more conducive place to raise a family,” he shared. Lee*, a marketing professional who has lived for over 12 years in Australia, agreed. “I returned precisely because of my ageing parents and the greater availability of work in my profession,” he said. “White collar jobs in my area were also very difficult to break into in Australia. We were heavily affected by outsourcing, and it has been very tough to find long-term and full-time permanent work in Melbourne.” “Most Singaporeans would find it generally easy to settle back here as the work environment is similar and they can easily plug back into their network of family and friends,” Rees said. “However, for Singaporean families with young children, the biggest issue in adapting back home is education, as MOE does not allow Singaporean children to enrol in international schools; parents would have to apply for exemptions from MOE. These children would typically have had overseas schooling which is vastly different from the local schooling system and so would find it difficult to adapt. Over the last five years, we have seen plenty of cases where the children do not do so well in local school and there is some parental guilt in not being able to manage that change,” he noted. Challenges upon returning Coming home can prove to be challenging for some overseas Singaporeans. For instance, returnees have to watch out for different communication styles between overseas and domestic firms. “The way you communicate in a Singaporean company (or context) is different than in Australia, US, Germany, Japan, etc. Singaporeans could potentially struggle adjusting after having lived or worked in a different environment for an extended period of time. They would likely end up working for foreign multinationals as it is easier to adapt to a similar working environment,” Rees noted. The more demanding work environment is also a key challenge. Since returning to Singapore, Lee has been able to find permanent employment but laments the lack of work-life balance. “Working in Australia was less stressful and the pay was also decent. I hardly feel any satisfaction working the long hours here, and sometimes I regret moving back,” he shared.

Andie Rees

Grant Torrens

However, Torrens highlighted that the lack of local work experience can also harm job candidates. “As mentioned, there is a mismatch in expectations of offer packages. About two thirds of employers (65%) are unable to secure returning Singaporean talents for this reason. Another concern 36% of employers have is that returnee candidates ‘lack the local work experience’, since companies are usually looking for knowledge of cultural nuances and corporate processes to navigate the local business landscape,” he noted. Returnees also still have to compete against the global candidate marketplace. “In a recent search for a client, although we had four local candidates and one foreign candidate, including a local candidate who has been based in the US for 10 years. The foreign candidate was chosen as he had the most international profile; while the US-based Singaporean was a finalist, that person was not selected as there was a profile that had been at a more senior level in international organisations,” Rees said. An international edge Still, it’s not all doom and gloom for professionals seeking to return home. Over eight out of 10 companies are willing to hire workers with international experience, and companies are keen to hire returnees due to tighter hiring quotas for foreigners. “Returnees do provide the international experience while being Singaporean. It is a win-win situation to have a ‘local’ leader with a broader international exposure,” Rees noted. He added that international experience sets candidates apart from those who have never left the country, especially in a market where local leaders do not have strong overseas work experience. “Many MNCs with operations in Singapore that we have spoken with would not hand over the top-level leadership to a local Singaporean candidate if they have not had some element of international exposure,” he said. “Singapore is one of the most diverse economies and the MNCs are a reflection of that. Unwillingness to relocate internationally for a long-term assignment could limit an otherwise high-potential Singapore talent.” “There is definitely an advantage for returnees. Most Singaporean employers (79%) believe ‘cross-cultural awareness’ is the top benefit returnee talent can bring to the table, followed closely by 71% who said ‘different perspectives on business’ and 62% who said ‘overseas commercial experience’ were key advantages of having overseas returnees in their workforce,” Torrens added. Local businesses are also extremely open about hiring overseas returnees, with 82% saying that they are willing to do so in the next 12 months. Seventy five percent of firms are willing to hire mid-level professionals. Many employers report to have had good experiences with their overseas returnee staff and would, in fact, play advocate for the hiring of skilled candidates who have worked or studied abroad, Torrens said. “Returnees could stand to benefit from showcasing how their skills learned overseas can help improve existing business processes and translate into business value for employers,” he added. SINGAPORE BUSINESS REVIEW | DECEMBER 2019

COVER STORY

PropNex office

Mergers and consolidation as property agent firms boost expenses on tech

Eleven of the firms in Singapore Business Review’s 2017 list of largest real estate agencies no longer exist.

he slowing property market has claimed 11 casualties over the last two years amongst the 55 real estate agencies ranked in 2017. Some big names have merged, including Edmund Tie & Company and OrangeTee into OrangeTee & Tie and Scotia and SLP Realty into SLP Scotia. Other firms simply closed down, including Venture International Properties, CBRE Realty Associates, Vestor Realty OneHomeProperty, HSR International, SMP Realty, House & Home Property, Alister & Lee Properties, and TEHO Property Network. Surprisingly, even as the number of agencies has fallen, the total number of agents has risen, a sign that consolidation is happening in a once fragmented industry. As a result, the number of agents per agency has increased from 415 in 2017 to 667 in 2019. At the top of the leaderboard is PropNex Realty which retained the top spot with 7,949 salespersons as of endJune, up 18.24% from its 2017 figure of 6,732. The boost in agent numbers was aided by its absorption of 400 agents from Century 21 Global Alliance Property (GAP). Second was ERA Realty Network, whose agent count climbed 11.06% to 6,861 salespersons from 6,178 in 2017. OrangeTee & Tie came at third place with a 4,249 figure, showing a 56.39% surge from its 2017 number. Overall,

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

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

the 40 firms in the 2019 list have about 26,671 salespersons. This number rose 16.81% from 22,832 in 2017. Industry foreclosures The most recent casualty was Century21’s GAP who in February announced that 400 of their agents would be absorbed by Propnex. The firm had 623 agents in the 2017 Rankings. “The market is challenging for agencies and salespersons and with tech disruption and more regulation going on, it’s natural to see the market consolidating. For how long we’ll not know,” said Hector Tan, head of marketing and communications at Huttons. “Many would think the larger agencies will be the only ones left but surprisingly, there are still many smaller agencies that are still around.” The existence of smaller agencies comes as surprising, as Tan said that the agent is supposed to become irrelevant as the market contracts and the middlemen get replaced by technology. However, he argued that in reality, even one-man sales agencies can exist, handle the administration on their own, and thrive without partnering with any big player. “The nature of the agent’s function is that he/she can

COVER STORY survive purely on referrals and bootstrap marketing. Regardless of proptech or not, it’s really hard to replace a knowledgeable agent’s role in the sale and purchase process of a property,” Tan said. The big property agencies recognise the role of agents and are still upsizing their workforce. The largest merger was between the 1,000 associates that Edmund Tie & Company had and 3,000 agents from OrangeTee. Ong Choon Fah, CEO of Edmund Tie, said it made sense to form a single platform for their respective associates. Edmund Tie’s residential team currently secures project appointments which are marketed in collaboration with their associates from their joint company with OrangeTee & Tie. However, she added the decision to merge behind the move came from tightening competition amongst platforms and ecosystems, which demands a significant investment in technology from firms in order to survive. These investments involve partnerships, which are increasingly getting prominent in the real estate space as developers seek to scale up. “With the high development costs and with projects getting larger, partnerships are a good way to manage risks whilst tapping on each other’s strengths,” Ong said. For one of its partnerships, OrangeTee & Tie tied up with blockchain-based ride-hailing app TADA in February to allow their agents to access the company’s 28,000-strong vehicle fleet. Vehicles can be booked for the agents themselves or their clients for meetings through their inhouse app. March marked the beginning of the agency’s other partnership with global home service platform Helpling. Through OrangeTee & Tie’s app, agents can book professional housekeepers through the Helpling platform via OrangeTee’s Agent App - making it even more convenient to get their properties cleaned before presenting them to potential home buyers or tenants. Big data helm Eugene Lim, key executive officer of ERA Realty, recognises that agents who have access to and use data analytics and market intelligence have an edge over their peers that do not use these tools. In August, it added a set of tools to its i-ERA mobile app, including a lead generator, a tagger on-demand, and a price predictor with UrbanZoom. ERA’s lead generator pulls statistics from multiple data points which can yield lists of past profitable transactions that can be filtered based on set criteria such as dates, districts, types of development, profitable transaction count, and minimum profit percentage. With this lead generator, salespersons are able to generate business leads for their target groups such as owners of resale condominiums, build-to-order (BTO), and executive condominium (EC) projects nearing Minimum Occupation Period (MOP). Another in-app tool called Tagger On-Demand also allows salespersons to request for the presence of project specialists at respective showflats with just the click of a button. The third tool, developed with proptech startup UrbanZoom, uses AI to predict the value of a home and its price history. Huttons also went down the route of analytics with Huttons iPortal (HiP), which is available on both mobile and desktop. HiP allows salespersons to access real-time

Eugene Lim

Hector Tan

Ong Choon Fah

info on units transacted and new units coming out on the market, and even source and identify valued-buy units, which are not expected to stay long in the market, for clients on a real-time basis. HiP also has widgets that can generate personalised marketing materials to network and conduct lead generation. Submission and coordination of paperwork, home approval process, and tracking of sales performance can also be fast-tracked through HiP. Tan said that Huttons is placing premium on marketing in its online portal. He added, “Storytellers and data specialists be in higher demand as the industry continues to consolidate in the face of tech. These means more positions in content and digital marketing, and data analytics will open up.” Lim concurred with Tan and said, “We train our agents to become trusted advisors; and you can only achieve this if you can combine your marketing and people skills with analytics and solid market intelligence that is tailored to the real estate needs of the client.” The costs of operations go beyond training as new compliance requirements for agents arise, Ong said. To address malpractices in the industry, the Estate Agents Act requires agents to attend courses with approved providers, pass mandatory examinations administered by the Council for Estate Agencies (CEA), and attend a minimum of six hours of professional development courses a year. Fees for an individual Real Estate Salesperson Course and CEA’s exam can go over $500 in a full sitting. Higher compliance costs New rules are present not only in agent training but also in developer offerings. URA now requires developers to provide a mix of unit sizes, including larger dwelling units (DUs), that cater to the needs of larger families and facilitate multigenerational living. According to Tan, the size of new developments must meet a minimum of 100sqm in the areas of Marine Parade, Joo ChiatMountbatten, Telok Kurau-Jalan Eunos, Balestier, Stevens-Chancery, Pasir Panjang, Kovan-How Sun, Shelford and Loyang, Telok Kurau, Kovan, Joo Chiat and Jalan Eunos. “Developers building projects in these areas may be forced to price their units at higher quantums in light of the smaller inventories they can work with, when planning the development of their land parcels,” Tan said. Even with smaller inventories, developers are still hard-pressed for time to build and sell their projects. “The Additional Buyer’s Stamp Duty (ABSD) rules introduced in 2011 stipulates that developers are to build and sell all new units within five years of a site’s contract purchase date or pay a 10% levy — later raised to 15% for sites bought from 12 January 2013,” Tan said. “With the current increased supply in the market, developers’ burden for unsold units are set to soar.” To deal with unsold properties, the government has put ageing HDB housing estates under the Selective Enbloc Redevelopment Scheme (SERS) scheme. Tan stated that the demand for Voluntary Early Redevelopment Scheme (VERS) could rise as it may be seen as a means to tap into the remaining value of these ageing HDBs. SINGAPORE BUSINESS REVIEW | DECEMBER 2019

COVER STORY NO. OF SALESPERSONS

2019 RANKING

REAL ESTATE AGENCY

PROPNEX REALTY PTE LTD

KEY EXECUTIVE OFFICER

2019 (as of Q2)

2017

7,949

6,732

LIM YONG HOCK

ERA REALTY NETWORK PTE LTD

6,861

6,178

EUGENE LIM

ORANGETEE & TIE PTE LTD

4,249

2717

TAN WEE SIN MICHAEL

HUTTONS ASIA PTE LTD

3,040

3118

PEGGY NGIAM

SAVILLS RESIDENTIAL PTE LTD

788*

681

TAN TEK YONG GEORGE

SRI PTE. LTD.

680

234

NICK TAN

KF PROPERTY NETWORK PTE LTD

610

652

LOW KIN HON

SLP SCOTIA PTE LTD

393*

Scotia: 403 SLP: 186

LIM GEOK CHWEE

CENTURY 21 PTE LTD

382*

YONG CHEE CHUNG

C&H PROPERTIES PTE LTD

324

LIM KIM CHAI NELSON

MINDLINK GROUPS PTE LTD

129*

386

CHOW YI TONG

JONES LANG LASALLE PROPERTY CONSULTANTS PTE LTD

151

FOSSICK CHRISTOPHER JOHN

SINGAPORE ESTATE AGENCY PTE LTD

CALVIN SEE

REA REALTY NETWORK PTE LTD

77*

WOON CHUEN THIAM

YOUR ESTATE SPECIALIST LLP

BENSON LEOW

CBRE PTE. LTD.

73*

PAULINE GOH

LHG PROPERTIES PTE LTD.

71*

HO CHAI HWA

REAL CENTRE INTERNATIONAL PTE. LTD.

62*

LIM TECK NAM

REALSTAR PREMIER GROUP PRIVATE LIMITED

WONG TECK KEONG

Asiapac Real Estate Services Pte Ltd

57*

KOK KITT SOON JANSEN

LEGEND: *OBTAINED FROM CEA **RETAINED FROM 2017 DATA

2017 RANKING

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

COVER STORY NO. OF SALESPERSONS

2019 RANKING

REAL ESTATE AGENCY

KNIGHT FRANK PTE LTD

2017 RANKING

KEY EXECUTIVE OFFICER

2019 (as of Q2)

2017

56*

LOW KIN HON

SAVILLS (SINGAPORE) PTE. LTD.

53*

MING KOK WAH

COLLIERS INTERNATIONAL (SINGAPORE) PTE LTD

52*

TANG WEI LENG

RIPTON REALTY PTE LTD

CHUA YONG KANG

CUSHMAN & WAKEFIELD (S) PTE LTD

36*

DENNIS YEO

EDMUND TIE (renamed from EDMUND TIE & COMPANY)

ONG CHOON FAH

MCDOWELL REALTY NETWORK

32*

WANG SOON YEE LARRY

DEANS REALTORS PTE. LTD.

32*

CHIA OI LIN

SLP INTERNATIONAL PROPERTY CONSULTANTS PTE LTD

31*

SIM KAIN KAIN

ASSET PROPERTY PRIVATE LIMITED

ALEX CHEN

FRASERS PROPERTY RETAIL MANAGEMENT PTE LTD

SEE SAN SAN

MIRACLES REALTY GROUP PTE. LTD.

26*

PHER KWONG SIANG

WRITE REALTY PTE LTD

24*

CHEW BEE KUAN

CCN REALTY PTE. LTD.

22*

SETO SIU MANG

WILD WILD WEST PROPERTIES PTE LTD

22*

LEE SONG HIN

CENTALINE (SINGAPORE) PROPERTY AGENCY PTE. LIMITED

21*

KHOO BOON TIEN

SE REALTY PTE LTD

20*

TAN YU MEI ANGELYN

TEAKHWA REAL ESTATE PTE LTD

20*

SIEOW TEAK HWA

MCG REAL ESTATE PTE. LTD.

18*

TONG YICK HOONG EDWIN

FRASERS PROPERTY COMMERCIAL MANAGEMENT PTE LTD

ALISON WONG

26,671

22,832

TOTAL

LEGEND: *OBTAINED FROM CEA **RETAINED FROM 2017 DATA

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

RANKINGS: ACCOUNTING SURVEY

Deloitte Singapore

Tightened rules on auditing call for higher tech and workforce investments The Big 4 are strenghtening their audit advisory services and expanding into cybersecurity and compliance.

s corporates get flung into the risk of being entangled in malpractices made more complex by new reporting loopholes, with the newest one being Keppel’s bribery issue, accounting firms are pushing the scope of their work from traditional audit to advisory services. With more work cut out for them, it is apparent that the firms are sizing up, as the number of staff in Singapore Business Review’s Accounting Rankings rose 7.85% from 15,281 in 2017 to 16,281 in 2019. Dominating the rankings is PwC, which has 3,300 employees, followed by KPMG with 3,048, Ernst & Young with about 3,000, Deloitte with 2,600, and RSM with 1,005. Amongst the Big 4, Deloitte Singapore’s CEO Pui Yuen Cheung has observed that there is greater demand for audit advisory services, especially in strengthening IA functions that will look at developing a road map of actions to better meet stakeholder expectations. KPMG’s head of advisory Irving 26

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

There is greater demand for audit advisory services, especially in strengthening IA functions that will look at developing a road map of actions to better meet stakeholder expectations.

Low added that it was not just about the IA requirement, but amendments to the Code of Corporate Governance (CGC) stipulates that annual reviews on the IA function should be conducted at least once every three years in order to enable boards to identify and correct any deficiencies in the function. New offerings In response, Cheung noted that accounting firms are going beyond compliance audits to advise on risk in areas such as cybersecurity, regulatory compliance, third-party relationships and IT governance. One of the new services Deloitte introduced in the past 12 months revolves around cyber crime & computer forensics, document reviews, electronic discovery and readiness, data hosting, data capture and discovery advisory & managed services. The firm also offers intellectual asset management advisory service. PwC partnered with cloud

computing platform Tanium in order to offer businesses a service to manage cyber threats and gain real-time endpoint visibility. Tanium aims to help businesses to manage procurement and compliance of licences and enhance governance of data stored in endpoints. Whilst PwC will provide any organisation seeking to adopt Tanium with end-to-end support across competencies such as change management, upskilling, best practices, governance frameworks and technology implementation. On its part, BDO has a digital platform called BDO Global Portal which handles group auditing. According to Jocelyn Goh, audit & human resource partner at BDO, the portal streamlines communication and secured documents exchange between the lead auditor, component auditors and clients. “We started our journey in adopting tdigital tools and data analytics for more than ten years ago,“ Goh said. “In order to continuously improve business efficiency, it is

RANKINGS: ACCOUNTING SURVEY important to monitor the existing tools to match with changes in the profession.” Unlike these international firms, smaller companies are struggling to adopt big data tech as they have been affected by industry consolidation. Robert Yam, managing partner at Robert Yam & Co. and Kreston David Yeung PAC’s director and head of audit department Thian Zte Chen both shared sentiments on losing clients that have entered M&A deals and commissioned one of the Big 4 or a second tier firm as the auditor. The most recent merger amongst accounting firms was between Baker Tilly and Ferrier Hodgson in July. Yam mentioned that there were some mergers of small- and medium-sized practices (SMPs) that could have been partly facilitated by the national accountancy body or the Institute of Singapore Accountants (ISCA). Some of the main reasons behind mergers include high demand for auditors, talent attraction, succession planning as well as intentions to broaden the suite of services SMPs can offer, he added. Eddie Lee, managing partner at Pinebridge, admitted that they had not done much on big data, and costs are instead directed to compliance requirements and staff training. Both Lee and Yam added that they are focusing more on recruitment and retention as well, along with dealing with rising costs of wages and rental. Chen mentioned that they are finding it difficult to retain senior auditors, in particular. Restrictions on hiring foreign talents, such as work pass quota and minimum salary, have an impact as well. “Without any government subsidies or incentives, we continue to provide internal funding,” Lee said. Another accounting firm noted that the good time had passed whereas government had been providing Productivity and Innovation Credit Scheme (PIC) grants between YA2016 to YA2018. In 2013, the Inland Revenue Authority of Singapore (IRAS) launched the PIC Scheme where businesses enjoy 400% tax deductions and allowances for qualifying expenditure up until 2018. Whilst

Cheung Pui Yuen

Jocelyn Goh

Low Irving

Robert Yam

the scheme has lapsed in 2018, the government has put a new plan in place to help SMPs to digitise and leverage big data. The government wants to make sure that local firms get a hand on digitisation as well, as SMPs make up 98% of the accountancy industry, according to SAC. As part of the new Accountancy Industry Digital Plan (IDP), firms can get up to 70% grant capped at $30,000 to adopt of internal audit digital solutions and up to 70% grant capped at $20,000 for the adoption of external audit solutions. SMPs can apply for funding support until 2020. Two programmes were launched under the IDP. One is the SMP Centre, a one-stop portal with information to support SMPs on their digitalisation journey; and the Accounting Technology & Innovation Centre, which will be set up to develop new accounting technologies and business models. “There are mixed thoughts about the two programmes launched,” Yam commented. “ The first programme is a push of what is already known out there like soft copy working papers and firm practice management systems.” Workforce investment Recognising the role of a younger workforce in their big data push, accounting firms are investing in

partnerships with schools. Cheung said that more clients are demanding professionals with capabilities around data analytics and digital. Deloitte made a deal with Singapore Management University’s School of Accountancy to deliver an Audit Analytics programme and an Audit Information Systems programme for undergraduates. SMU’s other programmes were also designed in consultation with EY, KPMG, and PwC. Deloitte also has a full-year learning programme for finance teams covering topics such as financial reporting, taxes, mergers and acquisitions, valuations, modelling, regulatory matters and risk & governance. KPMG announced that auditors who obtain a Singapore Chartered Accountant (SCA) qualification by 1 July 2020 will receive a salary hike of 20%. KPMG will also grant 10 days of study leave per sitting for auditors who are pursuing the said qualification. The SCA qualification is granted by ISCA, a national accounting body responsible for programme admission, module enrolment, examinations organisation, examination results release, candidate management, as well as the accreditation of employers (Accredited Training Organisations, or ATOs) and universities. Having such a title is said to put professionals on track for director positions and C-suite roles such as CEOs and CFOs in accountancy, business and finance.

Eddie Lee

KPMG Singapore

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

RANKINGS: ACCOUNTING SURVEY 2017 RANKING

2019

2017

PWC SINGAPORE

<3,000

3,300

2,800

YEOH OON JIN

KPMG

1,317

3,048

3,000

ONG PANG THYE

EY (ERNST & YOUNG)

close to 2,650

CLOSE TO 3,000

2,760

MAX LOH

DELOITTE & TOUCHE

Less than 2,600

2,600

2,300

PUI YUEN CHEUNG

RSM

<1,005

1,005

954

PAUL LEE

BDO LLP

455

500

460

FRANKIE CHIA

BAKER TILLY

275

300

290

SIM GUAN SENG

FOO KON TAN

290**

290

"KON YIN TONG

NEXIA TS PUBLIC ACCOUNTING CORPORATION

227

263

242

HENRY SK TAN

CROWE HORWATH

<240

240

230

TAN KUANG HUI

MOORE STEPHENS

160

210

215

NEO KENG JIN

MAZARS

161

201

195

DENIS USHER

RT LLP

80**

120**

120

RAVI ARUMUGAM

UHY LEE SENG CHAN & CO.

N/A

107**

107

LEE SENG CHAN

PKF-CAP

N/A

ABOUT 100

105

MICHAEL CHIN

LO HOCK LING & CO.

N/A

95**

LO WEI MIN, PEARLYN

HLB-ATREDE LLP

ANDREW TAN BENG HWEE

ACCOUNTING FIRM

LEGEND: *ESTIMATED FIGURES **AS OF DEC 31, 2018 ***FIGURES RETAINED FROM 2017

TOTAL STAFF

ACCOUNTING PROFESSIONALS 2019

2019 RANKING

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

MANAGING PARTNER

RANKINGS: ACCOUNTING SURVEY TOTAL STAFF

ACCOUNTING PROFESSIONALS 2019

2017 RANKING

2019

2017

AUDIT ALLIANCE LLP

BERNARD LEE

GRANT THORNTON SINGAPORE

JEFF VIBERT

CYPRESS SINGAPORE PAC

N/A

79**

LOK LAI CHENG

BSL GROUP

N VIMALA DEVI, LIM SIOW JANE

PRECURSOR ASSURANCE PAC (FORMERLY KNOWN AS K.G.TAN & CO. PAC)

TAN KHOON GUAN

ARDENT

N/A

75**

TERENCE NG

ROBERT YAM & CO.

ROBERT YAM

FIDUCIA LLP

WAYNE SOO

HENG LEE SENG

N/A

60**

MICHAEL HENG

CA TRUST PAC

N/A

TAN LYE HENG PAUL

HELMI TALIB & CO

HELMI TALIB

INFINITY ASSURANCE

KUAH HONG WOON

REANDA ADEPT PAC

VIVIENNE CHIANG

KRESTON DAVID YEUNG PAC

DAVID YEUNG PAC

PINEBRIDGE LLP

EDDIE LEE

3E ACCOUNTING

N/A

45**

LAWRENCE CHAI

16,481

15,281

2019 RANKING

ACCOUNTING FIRM

TOTAL

MANAGING PARTNER

LEGEND: *ESTIMATED FIGURES **AS OF DEC 31, 2018 ***FIGURES RETAINED FROM 2017

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

RANKINGS: COMMERCIAL BANKS SURVEY

UOB at Holland Village

Bank headcounts rise with tech talent boosting numbers

Banking staff at Singapore’s 18 largest commercial banks grew 5.47% in the last two years, with the growth spurred by digitisation initiatives.

he search for tech talent has boosted the workforce numbers of Singapore’s banks. With MAS officially joining the virtual banking race, and each bank requiring hundreds of mainly tech related new hires, this trend is only likely to accelerate over 2020. Overall banking staff employed at Singapore’s 18 largest commercial banks grew 5.47% in the two years since our last survey, from 58,409 to 61,604. DBS retained the top position with 11,693 employees as of end-March, up from 10,460 in 2017. UOB followed in second place with over 9,000 employees and Citi rounded out the top three with a 9,000-strong workforce. OCBC and HSBC came in at 4th and 5th place with 6,700 and 3,391 employees, respectively. Overall, the banks in the list have a total of around 61,604 staff in Q1 2019, from 58,409 in 2017. Virtual banking race With five new virtual banking licenses to be awarded, the battle for tech talent will only grow fiercer. Months after Hong Kong granted eight virtual banking licenses, the Monetary Authority of Singapore 30

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

The five digital banks will still remain small and could collectively command only 2% of domestic banking system assets after they become operational and carry a leverage ratio of around 10x.

(MAS) announced that it will grant two digital full bank licenses and three digital wholesale bank licenses that will cater to SMEs. With licenses that are expected to be handed out by mid-2020, digital banks can open for business a year later. However, they are only limited to receiving $50m of deposits with $75,000 per account. Its potential customer base is also limited to business partners, staff, related parties and selected customers. What this means, according to Maybank Kim Eng’s analyst Thilan Wickramasinghe, is that underserved segments such as the youth and new startups/SMEs are likely to find better access to financial products. “Traditional banking has generally focused on large, established businesses which require less risk capital deployment,” he said. “Assessing credit quality for these customers is cumbersome, costly and often do not justify the return. However, virtual banks using lower cost operating models and data/AI enabled asset quality management, may be able to generate better returns from this segment. Supporting SMEs with deeper capital access will become

an important driver.” Although the savings from having no branch network to maintain may not be enough to pose a formidable threat to incumbents, suggested Wickramasinghe “That said, in Singapore, the domestic banks have been leaders in technology infrastructure investment regionally, and the gap between virtual and traditional is narrower,” he added. So far, gaming hardware manufacturing company Razer, fintech startup InstaReM and wealth management platform iFast have expressed plans to join the digital banking race. Bloomberg also reported Grab and Singtel are considering the opportunity as well whilst OCBC is in talks with firms including Singtel. Fintech firm iFast, in particular, is aiming for a retail banking licence. The firm boasts of having administered over $9b of customers assets as at end-June. Lim Chung Chun, CEO of iFast Corp, said if his firm gets a license they will work on making the whole investment and transaction process a lot more seamless for their clients, from allowing them to earn better returns on their cash solutions, to lending to the companies. Lim also plans to look into partnerships with various companies in the payment and e-commerce space, to help meet the payment and related cash management requirements. “As we have previously applied for the virtual banking licence in Hong Kong, we also have a team ready to work on the digital bank operation if we are granted the licence,” Lim added. Big three will still lead Even with five new banks set to enter the market, analysts don’t foresee any significant competition for the existing big 3 domestic banks. Moody’s estimates the five digital banks will still remain small and could collectively command only 2% of domestic banking system assets after they become operational. The overall virtual banking sector could potentially dilute just 1.3% of incumbent bank earnings in 2021, according to Moody’s. When going up against the big three banks, the credit agency’s analyst Simon Chen said that the virtual banks’ impact will be quite manageable. “The wave of new digital banks

RANKINGS: COMMERCIAL BANKS SURVEY will increase competition and is credit negative for small foreign-owned incumbent banks in Singapore because these banks’ modest domestic franchises will face the greatest disruption risk by digital bank entrants,” Moody’s Chen added. Wickramasinghe is even more sanguine than Moody’s, forecasting that the digital banks would only account for less than 1% of the SGD loan market share. The two digital retail banks will only make up for 0.3% of the market whilst the three wholesale challengers will take 0.9% market share, he added. Since 2009, the big three banks have embarked on extensive digitalisation programmes. Their profitability around retail and SME banking are said to have improved as well. According to SGX, the average return on equity (ROE) for the three banks stood at 12.5% in H1, up from 12.1% in H1 2018. Both UOB and DBS have even launched their own virtual banks outside of Singapore. DBS has its digibank in countries including India and Indonesia. In March, UOB launched its virtual bank called TMRW in Thailand and plans to progressively expand its roll-out across ASEAN. Susan Hwee, head of group technology and operations, said that UOB integrated digital engagement solutions from Israeli-based fintech firm Personetics, and Icelandic-based firm Meniga into their IT infrastructure to enhance TMRW’s capabilities. UOB also upgraded its app UOB Mighty for its consumer banking customers in Singapore with plans to progressively roll out the enhanced app to Indonesia, Malaysia, and Thailand progressively. In Singapore, the bank also has a product catered to small businesses. Its BizSmart programme is an integrated suite of cloud-based business solutions that digitalises key operating processes such as payroll, sales, accounting and inventory management. It also aids businesses when applying for business loans in the bank. “To be able to provide customers with a consistent experience, products and services across markets, we invested $500m from 2011 to 2013 to build a standardised IT platform across our network,” Hwee added. “From

2014 to 2018, we further invested $1.6b to deepen our technology capabilities in areas such as data, mobility and connectivity, regulatory technology and cybersecurity.” Standard Chartered is also investing in digital, and executed a pilot transaction for a state-owned oil and gas company in Thailand with the first cross-border Letter of Credit (LC) issued over the Voltron blockchain platform for the oil industry. In January 2019, they have also completed its first blockchain-enabled cross-border supply chain financing in Singapore for Agrocorp, an integrated agricultural commodity and food solutions provider. “Our trade finance capabilities and global footprint made it possible for this first blockchain-enabled transaction to be completed within 24 hours, significantly reducing the time it could otherwise have taken (5-7 days),” the bank told Singapore Business Review. Chatty bots Banks have been setting up innovation labs, promoting chatbots/mobile portals to enhance customer experience, and boosting the digital infrastructure. Such efforts, according to Robert Half’s managing director Matthieu ImbertBouchard, will be areas of tech hiring growth amongst banks. As technologies increasingly reshape job functions, banks are actively retraining their workforce to handle the changes associated with the job. Standard Chartered introduced a $2m programme to retrain 3,000 employees by 2020 as part of an effort to future-proof its workforce against digital disruptions. In 2017, the bank embarked on the Professional Conversion Programme (PCP) and recruited 50 external PCP candidates since then. They have also offered PCP training and placement to 270 of its employees in 2018. Since the launch of eXellerator lab in 2016 and SC Ventures in 2018 which aims to harness innovation from within the bank, invest in fintech start-ups, and establish new partnership and solutions, Standard Chartered has hired a diverse group of specialists in big data, data science, open banking, APIs and AI etc. Following MAS’ announcement

Lim Chung Chun

Shinjika Shukla

Susan Hwee

Thilan Wickramasinghe

Matthieu ImbertBouchard

regarding digital banks, demand for functions related to software engineers, the demand for API integration architects, security, cloud specialist and UX/UI designers spiked, according to Shinjika Shukla, associate director at Michael Page Singapore. “Tech hiring is on a rise as it has been in the last two years especially in Singapore. The demand of tech professionals with experience on emerging technologies is on an all time high as these are transferable skills and every industry needs such professionals to meet the needs of digitisation,” Shukla said. Shukla mentioned that local banks, in particular, have been more actively searching for tech talent. “The local banks continue to be the top technology hiring employers in the banking industry. Foreign banks are conservative in their hiring strategies and spends in Singapore due to various issues that impact at a global scale. Further, the foreign banks are still continuing to invest in their low cost location strategy for roles that can be worked remotely,” Shukla said. Imbert-Bouchard added that local banks tend to approach hiring with more optimism and have increased the number of mid-level hires. And because of increasingly fierce competition for tech talent, hiring firms have noticed “extremely innovative and attractive” salary packages being rolled out in the last few months. “Tech professionals with strong background in software programming and security have been able to command as high as 50% increment in their base salaries. Especially the local talent with strong technical software programming skills and problem solving abilities are being lured with attractive fixed monetary packages, high performance based/driven bonus structures as well as stock options, etc,” Shukla stated. Tech professionals with skills in programming or security can command 50% pay bumps, noted Shukla, with an eFinancialCareers report noting banks offer $250,000 for director-level positions and $64,000 to $90,000 for analyst-level tech positions. Imbert-Bouchard added employers are giving higher grade titles such as Vice President for talent they want to retain. SINGAPORE BUSINESS REVIEW | DECEMBER 2019

RANKINGS: COMMERCIAL BANKS SURVEY NUMBER OF EMPLOYEES

2019 RANKING

BANKS

2017 RANKING

2019

2017

DBS BANK

11,693**

10,460

SHEE TSE KOON

UNITED OVERSEAS BANK

>9,000

>8,500

WEE EE CHEONG

CITI SINGAPORE

9,000*

9,000

AMOL GUPTE

STANDARD CHARTERED BANK

9,000*

>8,000

PATRICK LEE

OVERSEA-CHINESE BANKING CORP

6,700*

6,400

SAMUEL TSIEN

HONG KONG AND SHANGHAI BANKING CORPORATION

3,391

3,077

TONY CRIPPS

J.P. MORGAN CHASE & CO.

3,000***

3,000

EDMUND LEE

BNP PARIBAS

<2,200**

2,050

PIERRE VEYRES

MALAYAN BANKING (MAYBANK SINGAPORE)

2000*

1,800

JOHN LEE

CIMB BANK BERHAD

1,270

1,200

MAK LYE MUN

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK

1,178

306

JEAN-PIERRE MICHALOWSKI

AUSTRALIA & NEW ZEALAND BANKING GROUP

800

2,200

VISHNU SHAHANEY

RHB Singapore

722

750

DANNY QUAH

MIZUHO BANK

700***

700

SEIJI IMAI

BANK OF CHINA

580***

580

GUO NINGNING

STATE BANK OF INDIA

140

144

KISHORE KUMAR POLUDASU

ICICI BANK

111***

111

ANUPAM VERMA

BANK OF INDIA

77***

C G CHAITANYA

UCO BANK

RAJEEV GUPTA

91,005

85,981

TOTAL

LEGEND: *ESTIMATED FIGURES **AS OF DEC 31, 2018 ***FIGURES RETAINED FROM 2017

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

CEO OR COUNTRY HEAD

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

COUNTRY REPORT: GERMANY For German companies, the major opportunities are available within the industrial sectors of Singapore for smart city development, high-end manufacturing, electronics and chemicals.

SGC executive director Dr. Tim Philippi

German SMEs tap into Singapore market Over 1,800 German firms in Singapore from the industrial sector are looking to expand into the ASEAN.

he business ties between Germany and Singapore provide a growth environment for any enterprise of scale. Even with over 1,800 German companies set up in Singapore, opportunities arise for the small and medium-sized enterprises (SMEs) — known as the ‘Mittelstand’ — to enter the ASEAN region. Prospects for Singapore SMEs are also ripe as they can look to their German counterparts for services in smart city development, high-end manufacturing, electronics and chemicals. In an exclusive interview with Singapore Business Review, Singaporean-German Chamber of Industry and Commerce (SGC) executive director Dr. Tim 34

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

Philippi talks about collaboration opportunities for German and Singaporean SMEs as well as trade fairs and events that both can tap into. What innovations and developments by Germany businesses can Singapore businesses anticipate? Successfully taking part and managing the digital revolution is something both Singapore and Germany have a common interest in. In 2017, following the Smart Nation Initiative we saw Singapore setting foot into the next milestone to boost the digital ecosystem. With much to gain from a fully digitalised economy in the future, the nation is rapidly embracing ‘Industrie 4.0’. The so-called fourth

industrial revolution has opened new doors for companies. German companies, the inventors and driving force behind ‘Industrie 4.0’, are also offering various co-operative opportunities for Singaporean businesses. For German companies, especially in the digital sector, Singapore is a preferred destination in Southeast Asia. Not only does it have the state-of-theart infrastructure and facilities, Singapore has also established herself as a promising starting point for expansion and market entry into the ASEAN region. The Singapore government’s strong support for companies has created a positive business environment that significantly facilitates market entry and enhances business-level cooperation for German companies. The EU-Singapore Free Trade Agreement will also facilitate the knowledge and business exchange between Germany and Singapore and further strengthen the existing good business relations between the two countries. What are the opportunities for Singaporean businesses in Germany? Germany is an attractive place for investments in Europe from an investor’s point of view. Not only is the geographical location of Germany an advantage for any business venture into Europe, there are also many other factors which affect the success of businesses from various industries. There is a firstclass infrastructure which enables excellent transfer of goods via air, sea and land through harbours, airports, railways and motorways, also public and personal transportation is readily available. Furthermore, Germany has highly trained professionals in all fields and stable social and professional partnerships to enable a business-friendly environment for international investors. Given these excellent advantages, it is normal for any businesses to set foot into Germany when they think about the European market.

COUNTRY REPORT: GERMANY Some of the promising industries for Singaporean companies include Chemical and Pharma, Automotive, Electronics and Engineering, ICT, Logistics and Supply-Chain sectors. The service sector, for example the financial industries as well as management consultancy services also offer possible opportunities for Singaporean businesses. With the rising importance of the start-ups and entrepreneurial ecosystems, Singaporean businesses may also consider developing their innovative solutions in Germany or in cooperation with German companies. It is also a well-known fact that Berlin in particular, is recognised as one of the world’s best locations for start-ups. What are the opportunities for German businesses in Singapore? For German companies, the major opportunities are available within the industrial sectors of Singapore for smart city development, highend manufacturing, electronics and chemicals. In fact, German companies cooperate with many local entities to implement new processes in relation to smart city development and high-end manufacturing. There are already many German companies set up in Singapore, about 1,800 and growing, but there

are still many good opportunities for the small and medium-sized enterprises (SMEs)—known as the ‘Mittelstand’—to enter the ASEAN region. The ‘Mittelstands’ are the backbone of the German Industry and are often world class leaders in their respective fields or industries. Are there any trade and investment events that Singapore companies can get involved in? The Singaporean-German Chamber of Industry and Commerce (SGC) is a bilateral chamber and organises many events and activities yearly for Singaporean and German companies to participate in. From speaker-driven business luncheons to delegations and conferences, our events are targeted to specific industries and sectors hence offering Singaporean companies niche networking opportunities. These are good starting positions for Singaporean companies to get involved. Our annual Energy Efficiency conference, Start-Up and other industry specific delegations such as Water and Sewage Management may offer some avenues for Singapore companies to get involved in. Our Trade Fairs arm of the chamber also organises Singapore pavilions at trade fairs in Germany all through the year for Singapore companies to take part in.

Some of the promising industries for Singaporean companies include Chemical and Pharma, Automotive, Electronics and Engineering, ICT, Logistics and SupplyChain sectors.

What is your outlook on Germany and Singapore’s business relationship? How else can the two economies support each other moving forward? Germany and Singapore’s business relationship is set to improve in the coming years. Digitalisation will be a key driving force for both German and Singaporean companies to get innovative – to develop solutions to address the needs of both nations. Furthermore, the recent ratification of the EU-Singapore Free Trade Agreement (FTA), will open doors to German and Singaporean companies to further expand their business and trade activities in both directions. On this note, Germany being Singapore’s main trading partner in the EU and Singapore in turn being Germany’s main trading partner in ASEAN motions the attractive potential for mutual economic activity. Singapore offers numerous opportunities to develop in a variety of sectors including biotech and health, environment and water technology, digital and interactive media and climate protection where German companies co-operate locally. Furthermore, the continuous strengthening of ‘Industrie 4.0’ also provides very good prospects for German and Singaporean businesses to collaborate successfully to achieve sustainable innovation.

SGC office

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

COUNTRY REPORT: GERMANY

German companies drive growth in Asia with innovation hubs in Singapore

Establishing their bases in Singapore allows Schaeffler Asia Pacific and Hoffmann Group to leverage industry partnerships and government support.

also banking on Singapore’s growing pool of startups to further test and advance unique innovations in the lion city. In June 2019, the company hosted the Technology Partnering Event Asia Pacific 2019 to search for the most innovative startups to explore creative ideas and build new partnerships that develop technologies of the future. Besides world-class education and the abundance of startups, Schaeffler is taking advantage of Singapore’s regulatory framework to test-drive initiatives that address some of the issues that influence global and current trends on mobility. In August 2019, the Committee on Autonomous Road Transport conducted test trials for Singapore’s first autonomous Schaeffler’s R&D capabilities set the global standards in urban mobility. shuttles buses in Sentosa Island. With this new development, the island state may be ingapore’s success in fostering Dharmesh Arora, Chief Executive Officer at close to seeing the advent of self-driving innovation can partly be attributed Schaeffler Asia Pacific. cars. to its commitment to research and “In collaboration between SHARE at NTU Arora said that a recent joint venture development, according to Forbes. The and FPT, a Vietnamese technology company, between Schaeffler and Paravan (Schaeffler last five years saw a boost in the country’s a deep-learning image classification neural Paravan Technologie) is responsible for the R&D capabilities, enterprise innovation network was developed and trained to drive-wire technology needed to operate and entrepreneurship with the government accurately detect pedestrians in different autonomous vehicles. “Steer-by-wire is a key injecting $19b (US$13.9b) into such contexts and enabling technology for initiatives through the Research, Innovation lighting conditions,” self-driving cars. Even in SCHAEFFLER GROUP’S and Enterprise Plan (RIE 2020). added Arora. semi-autonomous cars STEER-BY-WIRE IS A KEY In 2017, Schaeffler Asia Pacific set with steering wheels, As parts of its ENABLING TECHNOLOGY up an R&D centre that focuses on urban the space saved by efforts to realise FOR SELF-DRIVING mobility in the form of the Schaeffler Hub eliminating the steering a more mobile for Advanced Research (SHARE) at Nanyang CARS. THE SPACE SAVED column opens new society, the Technological University (NTU). possibilities for vehicle BY ELIMINATING THE German company and cab interior design,” Guided by the Land Transportation recently partnered STEERING COLUMN Authority’s (LTA) Land Transport Master with startup OPENS NEW POSSIBILITIES he explained. Plan 2040 and Active Mobility Act, the ScootBee—which The new CEO’s deep FOR VEHICLE AND CAB. company said it will concentrate on operates a fleet understanding of the safety and harmonisation of multimodal of autonomous automotive industry transportation, helping commuters scooters accessed through an app—to and diverse international experience will with differing needs who choose to ride reduce the vehicle weight and enhance the enable Schaeffler to further strengthen other modes of transport, or new vehicle braking system of the latter’s vehicles. its manufacturing and engineering concepts, such as PABs (power-assisted capability in Asia Pacific. “With a drivetrain derived out of their bicycles), PMAs (personal mobility aids), and robotic heritage, one of ScootBee’s interest Schaeffler has been present personal mobility devices (PMDs). in Schaeffler is the Highly Integrated in Singapore since 1975 and has “We have developed a pedestrian Drivetrain (HinDT),” explained Arora. been a pivotal part of Asia Pacific’s detection system as a feasibility study to “ScootBee is already running trials in transformation, establishing a wide show how, for example, LTA’s regulation on Singapore’s One North district and they and diverse footprint with over 18,500 maximum speed in crowded areas could be have been in contact with our research employees across 17 manufacturing realised as an Advanced Driver Assistant team in SHARE at NTU,” he added. Packed facilities and seven R&D centres System, purposely built for PMDs,” said with top calibre universities, Schaeffler is connected to the global network.

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

COUNTRY REPORT: GERMANY

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

product to adapt to our local customer eaching 100 years is not a customary needs,” Borries Schüler, chief product feat for any company, but Hoffmann, management & engineering officer at the headquarters of the Hoffmann Hoffmann, said during an interview with Group is ready to brave another centennial Singapore Business Review. if it means serving its 135,000 customers and counting. In 1919, not too long after Hoffmann Group has three hubs in Asia, Germany announced a new republic, Josef not to mention the other subsidiaries Hoffmann started selling and trading scattered across Europe and the Americas. technical equipment in Munich, carefully For Southeast Asia, Hoffmann Group has observing the market and augmenting the its headquarters in Singapore, Shanghai for product line according to customers’ needs. its Chinese market and Pune for its India operations. When Josef’s son, Franz Hoffmann, joined the business in 1936, he made the most One of the reasons why the company simple, focussed and useful has grown in Asia can tool for any tradesman be attributed to its “WE ARE NEVER of that time, an in-house customers. “In Asia, we HAPPY ABOUT catalogue of product figure out what products listings from different THE SITUATION; or services can help our manufacturers which would customer get better,” WE IMPROVE THE become the inspiration for Schüler noted. SITUATION FOR the Hoffmann catalogue. This personal EVERY MARKET IN Now, the company attention to customers EUROPE AND IN assists its customers is complemented by ASIA.” with almost 38,000 tools Hoffmann Group’s under the GARANT brand motto “ever better,” which started in 1973. GARANT, as the which explains the importance it gives to company puts it, reflects Hoffman Group’s high quality. “We are never happy about manufacturing competence in machining the situation, we improve the situation, technology, clamping technology, metrology, every market in Europe and also in Asia,” grinding and cutting, hand tools, as well said Martin Reichenecker, chief sales and as workstations and storage equipment. marketing officer and spokesman of the Apart from this mainstay in the company’s board at Hoffmann, describing a typical product portfolio, the company also carries European behaviour. its HOLEX brand and 500 other industrial As part of its end-to-end service, the quality brands. “We just find the right company also focuses on providing expert

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

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

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

HR BRIEFING

Firms rev up their wellness programmes Employees can get a room for power naps, fitness programmes, and lunch-and-learn sessions.

Willis Towers Watson wellness room

ith Singapore’s workforce clocking in an average of 44.9 hours of work in a week, the city’s companies are implementing tailored wellness programmes to combat insufficient sleep, stress and potential burnout. At risk management and advisory firm Willis Towers Watson, employees are able to take a break in their wellness room for a short massage or power nap in between work. “We encourage work-life integration by allowing colleagues the ability to work from home when required. We also organise in-house badminton matches, weekly pop-pilates, yoga and Zumba classes in the office for colleagues to participate after work,” Pheona Chua, senior consultant for corporate health & wellbeing at Willis Towers Watson Asia, told Singapore Business Review. “Many large firms also provide employee assistance programmes to support employees with all-rounded mental wellbeing initiatives. Mid and smaller firms typically organise lunch-and-learn sessions and a series of support group workshops that are highly effective in smaller groups,” she said. “When we consider programmes to an individual’s needs, they typically respond with higher level of engagements which boost productivity level. This leads to a reduction in 38

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

Firms with effective and tailored health and wellbeing programmes in place are two times more likely to outperform their peers.

absenteeism and turnover rates.” According to a survey conducted by Willis Towers Watson in 2018, firms with effective and tailored health and wellbeing programmes in place are two times more likely to outperform their peers, 50% more likely than competitors to report lower turnover rates, and are seeing fewer days of unplanned absences per year. “Some companies have employed an in-house mindfulness and meditation coach to ensure the welfare of their employees. Some firms have also included an on-site meditation room or sent their employees on workshops with external coaches,” Ling Xiang Lee, Robert Walters Singapore’s manager for sales & marketing, industrial, technology and services, noted. Robert Walters Singapore provides insurance coverage that allows employees to pick and choose the kind of wellness benefits workers want, such as traditional Chinese medicine (TCM) and healthier meal options. These little perks are said to have cultivated a positive work environment with higher employee engagement and improved productivity at the firm. Along the same lines, Robert Half launched its own wellness programme “It’s Time We All Work Happy” in

HR BRIEFING 2018, comprising five key initiatives touching on health and physical wellbeing, flexible working arrangements, and social responsibility. “This includes the provision of a weekly personal trainer for group staff workouts, discounted health club memberships, the option to leave work at 4 p.m. on Fridays, a monthly allotment of time to enjoy lunch with your family, free health checks, and quarterly charitable initiatives,” Mathieu Imbert-Bouchard, managing director of Robert Half Singapore, said. “Exercise classes, such as relaxation and meditation, can be part of a company’s wellness programme which can better equip employees to cope with stress.” But like with most employee-geared initiatives, wellness programmes are not cookie cutter, with younger workers perhaps being more receptive to digital solutions and baby boomers contented with employers providing them free fruits every week at their workplace, Chua noted. So where should businesses start in coming up with their own wellness programmes? According to Chua, a baseline assessment is always the key foundation to building any wellbeing programme. This sentiment was shared by Amitabh Deka, head of wellbeing solutions and Aon Care at Aon South Asia, who explained that baseline assessments include attention to the programme scope and objectives in light of the available resources, the organisation’s vision, and the current state of employee health. “The most common means of getting a baseline assessment is health risk assessment as it focuses on lifestyle risk. Companies can develop their own questions or adapt it from public sources,” Chua said. “However, companies do not usually do that as that will mean the HR team will need to consolidate the report and analyse it thereafter. And most of the time, they either do not have the bandwidth or the relevant knowledge in doing so. That is also the reason why many companies are engaging professionals to do it.” Whilst Imbert-Bouchard noted that there is no standard practice across Singaporean companies, some efforts have been made to move into that direction. Intergenerational segmentation Deka also observed that a popular approach some firms have taken is the intergenerational segmentation. “At Aon, we refer to employees aged up to 35 years as ‘Young Guns’, those between 36 to 50 years as ‘Sandwich Generation’ and ones above 50 years as ‘Silver Heroes’,” he said, stressing that these workforce generations unsurprisingly differ predominantly in life values, motivation triggers and health status. “For instance, young guns are perceived as ambitious, but they have been noticed to take downtime to reinvigorate themselves, were found to be physically fit and socially active, and their wellbeing needs are around emotional and financial wellbeing. The sandwich generation find themselves either insecure or accomplished, often preoccupied with

Amitabh Deka

Ling Xiang Lee

Matthieu Imbert

Pheona Chua

meeting their commitments, with a dip in physical activity and sleep but increase in stress. They often fall prey to lifestyle diseases,” he explained. Meanwhile, silver heroes are more likely to achieve purposeful living but tend to struggle with activity limitations due to ageing; pain, mobility and sleep are key health issues for them. To Deka, successful wellbeing programmes respect the inherent diversity that comes with a multigenerational workforce. “No doubt it is complex to manage, but it is a challenge worth investing in. Weaving the varied needs and drivers of an intergenerational workforce begins right at the initial step of crafting a wellbeing programme during identification of objectives and establishing the baseline,” he noted. Businesses may even look to mobile apps to support employees. “Mindi and headspace are a few examples of these popular apps available in this space. Such apps provide quick and small bit-sized ‘on-thego’ meditation exercises that are suitable for busy executives who do not have the time to attend fixed sessions organised at the workplace,” Chua added. But simply implementing a workplace wellness programme though—no matter how effective—is not enough to ensure that all employees’ health and wellbeing needs are being fully met, Ling underlined. A 2018 report by PwC echoed this, noting that workplace health programmes have been shown to be more effective with strong and consistent support from company leaders. This is because management support can generate and preserve the programme resources, increase their legitimacy and provide role modelling. “Team leaders and senior managers must have regular one-on-one contact with team members in a confidential manner, to keep up-to-date on how each individual is feeling and what challenges they may be facing both at work and in their personal lives. This will allow managers to adapt their organisation’s wellness initiatives and working environment to help make their team members feel more supported,” Ling added.

PwC workplace health model SINGAPORE BUSINESS REVIEW | DECEMBER 2019

FINANCE BRIEFING

Banks see analytics driving SME growth Banks such as UOB are cutting loan processing time as OCBC focuses on finding serial entrepreneurs.

ingaporean banks are relooking at ways to both grow their customers and lending to SMEs. And it comes as no surprise with a study from McKinsey noting that lending to small and medium-sized businesses accounts for more than a third of all bank loans in Asia Pacific, and the SME portfolio is expected to grow 9.1% annually to US$23t in 2025. With the vast majority of SMEs in Asia Pacific turning to non-bank sources to finance working capital, this is an obvious market for banks. So why aren’t they making more of the opportunities? However, SMEs fail to get the support they need from the traditional financial system as McKinsey notes that most banks lack the necessary information to assess the creditworthiness of SMEs accurately and often make bad lending decisions. As a result, banks’ risk costs for the SME segment in Asia Pacific are double those of the large corporate segment. UOB is taking on the challenge by looking to get more data from its customers accounts and seeing what kind of business they are doing in almost real time. This allows the bank to grant loans faster and in situations where they normally would not have. UOB knows that a shorter processing time for loans leads to more customers, which is why Mervyn Koh, managing director and country head of business banking for Singapore, said that the enhanced credit engine complements its existing sources of information by including new pools of data, such as the company’s day-to-day operations, to gain deeper insights into a small business’ credit behaviour. Typically a business loan takes at least a week to process and requires several documents from applicants. But with the new analytics engine, the processing time has been cut by 60% and the process to supply data has been automated with government-enabled service MyInfo Business. UOB digitalises processes such as accounting and payroll, enabling small businesses to gain greater visibility of their day-to-day operations and financial position. “Through the enhanced credit underwriting engine, we are able to help more small businesses access financing through products such as our flagship collateral-free loan, UOB BizMoney,” Koh said. To support customers in their e-commerce programs, UOB integrated the digital solutions of Shopmatic, an e-commerce solutions provider, into UOB BizSmart in May 2019. Shopmatic’s solution enables small businesses to list their products and services on multiple marketplaces and social channels such as Amazon, Lazada, Qoo10 and Facebook easily. “With the sales data generated on Shopmatic, UOB is able to draw insights from it and use them alongside other more traditional information such as the company’s latest financial statements to determine the business’ credit profile more accurately. This has made it easier for small businesses to apply for UOB business loans, especially if they do not have the track required, thereby improving their access to bank 40

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

UOB BizSmart

Christie Chu

Mervyn Koh

financing,” Koh said. OCBC has adopted a different strategy but nonetheless is using more data to identify successful individuals behind businesses and use that information to make loans to their new ventures. Serial entrepreneurs are their target as the bank believes they are a sizeable market, with a third of businesses incorporated in 2015-2017 belonging to an entrepreneur already running at least one business. In January, OCBC launched its Serial Entrepreneur business which was a result of a year-long pilot programme in which $100m of business loans have been approved. Christie Chu, OCBC’s head of emerging business, global commercial banking, said, “We realised that we should focus on the serial entrepreneur and recognise his or her journey of successes and failures, rather than assessing a business solely on its financial track record. From taking a serial entrepreneur’s track record in Singapore into account for a loan for his first overseas business, to facilitating takeovers of other companies and otherwise providing assistance toward their goal of becoming a listed company – the pilot has been very meaningful and yielded many successes so far.” The business is centred on the bank’s new credit approach that takes into account the entrepreneur’s experience, business track record and overall business strategy across his or her group of companies. “This focus on the serial entrepreneur greatly improves upon the prevailing industry model which evaluates each business on a standalone basis based on their track record and fin ancial credibility which makes it difficult for startups less than two years old to obtain financing – even if the founder has operating businesses and a proven track record,” OCBC added. The serial entrepreneur business has teams comprising specialists in cash management, mezzanine capital and wealth management, with a relationship manager to form an integrated support network for serial entrepreneurs. OCBC noted how its cash management specialists guided a select group of serial entrepreneurs to become one of the first in Singapore to start using the funds transfer service, PayNow, for their businesses. “Exclusive economic and equity outlook events with the bank’s wealth management specialists were also organised for the serial entrepreneurs,” it added.

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

EVENT COVERAGE: BUSINESS CASE STUDIES AWARDS 2019

Southeast Asia’s best solutions take spotlight at SBR Asian Business Case Studies Awards 2019

he event delegates in attendance had enough room for creative insight and network gathering in the fourth installment of the awards. Singapore Business Review recognised extraordinary companies and their noteworthy solutions at the fourth Asian Business Case Studies Awards 2019 held at Sheraton Towers Singapore on 9 July. The winning innovators this year presented their remarkable case studies which have added value to clients’ operations and made a mark in their respective industries. Winners were chosen based on uniqueness & innovation, effectiveness & impact, dynamism, and client feedback.

approved, they can walk into the dealership, present their approved credit application, verify and adjust the terms before digitally signing and receive the e-contract within minutes. Thanks to a project which took 24 weeks to develop, every authorised dealer of Mercedes Benz in Singapore is now equipped with eContracting. Last but definitely not the least was Festo Southeast Asia’s case study which won the Industrial Automation Case Study of the Year for a solution that covered both the business and training side and digitalised the manufacturing facility of Vietnamese carmaker VinFast. German automation specialist Festo led the competency upskilling of the carmaker’s staff to make them ready for Industry 4.0 by providing not only training equipment but also lab designing and training for VinFast trainers. In Vietnam’s relatively untapped market, the company expects to realise the growth potential of the automotive industry, with offices in Hanoi and Ho Chi Minh and an expanded regional logistics centre opened in 2017.

Singapore Business Review congratulates the following awardees: Adventus Singapore Pte Ltd broke the ice for this year’s awards ceremony as it snagged the IT Services Case Study of the Year. The ICT solutions provider implemented a plan to upgrade the physical servers of property developer Soilbuild to cut down on costs and provide high availability. As part of the plan, 65% of the servers were migrated using virtualisation technology, and 35% were reused for the backup infrastructure project which did not require additional purchases thanks to this intelligent solution by Adventus. Bestinet Sdn Bhd took home the Technology Case Study of the Year for developing Malaysia’s Foreign Worker Centralised Management System (FWCMS), which was designed to speed up the migrant worker recruitment process. This platform greatly reduces the need for manual checks and paper documents as everything is integrated on a single platform, where governments from countries sending and receiving labour and migrant workers can monitor the process in real time. In the fintech space, CoAssets Pte Ltd clinched the Financial Technology Case Study of the Year for its online platform which enables average investors to place bets on high-yielding projects for as low as $5,000. Licensed and regulated by the Monetary Authority of Singapore, this debt-based investment platform performed well in 2018, with numbers recording a 9.91% weighted annual rate of return, as well as 0% default rate. Singapore’s CoAssets Pte Ltd looks to grow its 60,000-strong investor base as its principal company (CoAssets Limited; ASX: CA8) looks to bring the platform’s framework and success to neighbouring China and Hong Kong. Known for the iconic Mercedes-Benz, Daimler Financial Services Africa & Asia Ltd, together with Mercedes-Benz Financial Services Singapore (MBFS), won the Financial Services Case Study of the Year with the launch of its eContracting project for car financing and leasing. This digital solution covers the entire contract process. Clients can check finance eligibility and apply for a loan online. Once 42

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

Case study presentation

Networking

Daimler Financial Services Africa & Asia Pacific Ltd.

Adventus Singapore Pte Ltd

Discussion

Bestinet Sdn Bhd

CoAssets Pte Ltd

Festo Southeast Asia

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

EVENT COVERAGE: SBR AWARDS

Listed, local and international firms reign on top at Singapore Business Review Awards 2019

ver 150 guests graced the dinner and awards held at the Conrad Centennial Singapore on Thursday, 11 July. With one of the most efficient and connected transport systems in Asia, not only is Singapore a thriving business hub for local companies, it is also quickly becoming the go-to location for foreign investors. In an effort to recognise the companies that have remarkably contributed to the economy and forged ties with neighbours in the region, Singapore Business Review presented this yearâ&#x20AC;&#x2122;s International Business Awards, Listed Companies Awards, and National Business Awards. The winning companies were honoured at a joint awards ceremony held on 11 July 2019 at the Conrad Centennial Singapore. In its sixth year, the International Business Awards continues to laud the most outstanding international firms operating in Singapore. The Listed Companies Awards in its fifth year recognises publicly listed companies in the city state for their most unique and innovative practices. Meanwhile, homegrown Singaporean companies were celebrated in the fourth edition of the National Business Awards. This yearâ&#x20AC;&#x2122;s nominations were judged by a panel consisting of Ng Jiak See, executive director and head of corporate finance advisory at Deloitte Singapore & Southeast Asia; Choo Eng Chuan, ASEAN markets leader and partner, international and corporate tax services at Ernst & Young Solutions LLP; Toh Kim Teck, assurance partner at Foo Kon Tan LLP; and Henry Tan, managing director at NEXIA TS. The dinner event was attended by distinguished guests from the U.S. Embassy in Singapore, Canadian Chamber of Commerce, and Singapore-Malay Chamber of Commerce and Industry. Asian Healthcare Specialists Limited

United Global Limited

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

Singapore Business Review congratulates the following winners: International Business Awards

AMITY GLOBAL INSTITUTE - Education Daimler Financial Services Africa & Asia Pacific Ltd - Financial Services Edrington Singapore Pte Ltd - Food & Beverage AIA Singapore - Life Insurance Hoffmann Quality Tools Asia Pacific Pte. Ltd - Machining and Tooling Ardentec Singapore Pte Ltd - Manufacturing gumi Asia Pte Ltd - Media & Entertainment

Listed Companies Awards

United Global Limited - Chemicals AEM Holdings Ltd - Electronic Manufacturing Asian Healthcare Specialists Limited - Health Products & Services ESR Funds Management (S) Limited - Real Estate Biolidics Limited - Technology Singapore Telecommunications Ltd - Telecommunications

National Business Awards E-TECH BUILDING SERVICES PTE LTD - Building Services & Facilities Global Indian International School - Education NOVU Fasthetics - Health & Wellness Axe Factor Pte Ltd - Hospitality & Leisure Adventus Singapore Pte Ltd - IT Services

Biolidics Limited

Singapore Telecommunications Ltd

Global Indian International School

2019

ESR Funds Management (S) Limited

AMITY GLOBAL INSTITUTE

Adventus Singapore Pte Ltd

Hoffmann Quality Tools Asia Pacific

Ardentec Singapore Pte Ltd

gumi Asia Pte Ltd

E-TECH BUILDING SERVICES PTE LTD

Daimler Financial Services Africa & Asia Pacific Ltd.

AEM Holdings Ltd

NOVU Fasthetics

Axe Factor Pte Ltd

Edrington Singapore Pte Ltd

AIA Singapore

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

IT SERVICES CASE STUDY OF THE YEAR

Adventus front office

Intelligent application of virtualisation technology Property development company Soilbuild Group tapped on Adventus’ expertise to eliminate high costs and enhance high availability of servers.

eading integrated property development company Soilbuild has been running its business applications on a fleet of physical servers since the last technology refresh. This traditional approach required high investments on the server infrastructure, which amounted to high yearly appreciation of these fixed assets. Moreover, the servers were prone to a single point of failure, whereby if one server went down, all business applications on that server would stop running. After a rigorous evaluation process, Adventus was selected for the project due to its reliable and proven track record of success. Adventus designed a solution and implementation plan that revolved around Soilbuild’s IT vision and future requirements. To improve the performance and capacity of Soilbuild’s physical servers, Adventus increased their storage space and RAM by 50% and 100%, respectively. These minor upgrades were for 65% of Soilbuild’s servers. Upgraded servers were equipped with a bare-metal hypervisor as the virtualisation platform to achieve high availability. 46

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

Adventus applies cutting edge technologies intelligently and adds enormous value to its clients.

Adventus explained that this technology was ideal for Soilbuild’s requirements and it was aligned to the company’s needs. Additionally, Adventus’ experience in the field of virtualisation proved essential at this stage of implementation and improvement. As a result, all production servers were successfully migrated as virtual machines onto the virtual hosts. With specialised tools and proprietary processes,

Trustworthy ICT solutions

ith a wide footprint across Asia, Adventus believes that companies that wish to become winners in today’s globalised and ultracompetitive marketplace must learn to effectively leverage technology to create driven advantages and introduce business innovations. “The team from Adventus Singapore has clearly differentiated themselves from their competitors by not blindly advocating popular solutions but was focused on addressing our needs with the right solutions instead,” said Tan Chee Yong, assistant manager at Soilbuild Group Holdings Ltd. “Adventus has proven themselves to be a

Adventus completed the migration smoothly without having to shut down any production server in the process—a testament to the company’s stellar reputation in ICT. Upon implementation, Soilbuild saw 30% annual cost savings on required hardware costs to run its business applications, and hardware was reduced by 35%. Soilbuild’s former physical servers demanded double the current hardware investments to keep up with achieving the high availability architecture of their systems. With the new upgraded servers, extensive costs were eliminated along with the risks associated with a single point of failure. High costs from yearly license fees that came with adopting high-class virtualisation technology were also waived with Adventus’ intelligent deployment of a solution that met Soilbuild’s needs. Soilbuild reaped cost savings benefits by deploying 35% of their fleet of servers for the Backup and Disaster Recovery Infrastructure project. With the rehashed servers, Soilbuild had no need to purchase additional hardware for the project. Besides cost savings and high availability, the Adventus team was able to deliver the project successfully without any major impact on the production servers in the process, closing minutes of downtime during migration.

trustworthy system integrator that applies cutting edge technologies intelligently and adds enormous value to their clients,” he added. Adventus is a leader in delivering state-ofthe-art information and communications technology (ICT) solutions and pertinent services that bring about positive transformations to businesses.

TECHNOLOGY CASE STUDY OF THE YEAR

Technology Case Study of the Year

Bestinet’s staff support for FWCMS

Malaysia leads the way in managing migrant workforce Bestinet protects both workers and employers with its cutting-edge Foreign Worker Centralised Management System (FWCMS) software.

hen Malaysia implemented the Foreign Worker Centralised Management System (FWCMS®), the groundbreaking system was able to single-handedly streamline the country’s immigration and hiring processes like never before. The system, developed by tech solutions provider Bestinet, eliminates all manual processes and makes the recruitment and management of foreign workers more efficient and transparent. “Being an online system, it greatly reduces the need for manual checks and paper documents as everything is integrated on a single platform. With less paper to manage, there is a higher sense of visibility and accountability when we need to make any decision as all the information can be found easily,” said a Malaysian Government spokesperson. Strengthening the supply chain FWCMS® is an online management system that enables governments from countries sending and receiving labour to monitor the process in real time. It is a multi-touch-point system, involving a full-fledged web-based

The system combines safety, health, welfare and compliance in a unified single management system.

online management system backed by a secure data processing management infrastructure developed for the Government of Malaysia. “It is a system that combines four key components of safety, health, welfare and compliance in a unified single management system, benefitting all stakeholders,” explained Ismail Mohd Noor, CEO of Bestinet Sdn Bhd. “It is a system designed to eliminate unnecessary middlemen

Improving lives through better recruitment

efore FWCMS came into effect, all application and submissions had to go through immigration and could take weeks for approval. Some applications were rejected after waiting for weeks. “Now, all submissions are done online to respective agencies in Malaysia and no manual submission is required,” says Ahmad Kamal, Head of Liaison & Recruitment, Foreign Workforce, FGV Plantations Sdn Bhd. “The alerts and notifications assist us on regulatory compliance and statuses, resulting in faster worker arrivals in Malaysia.” Besides its full software, “the staff from the FWCMS One Stop Centre (OSC) are always

and exploitation from the migrant worker recruitment process. With the implementation of 20 modules, the chances of exploitation during the entire process diminishes due to real time data updates as well as connectivity between the labour sending and labour receiving countries,” he added. FWCMS® allows medical screening to be carried out by accredited Medical Centres and results available online in real time, including registration of demographic and biometric data. “In the past, migrant workers had to wait around two to three months to find out if they are eligible to work in Malaysia. By the time, the workers already have paid a large amount of money to middle men and medical fees paid. With FWCMS®, the online real-time eligibility verification guaranteed the workers no longer risk losing their savings and time as the worker only proceed for medical screening if they are eligible,” Ismail noted. The benefits are deeply felt by all stakeholders in the recruitment process. “Their comprehensive approach to how the system was designed in handling workers from cradle to grave has smoothen the entire process; not just for us but also many others involved in the supply chain. FWCMS® also supports the United Nation’s Sustainable Development Goals while promoting good governance in the public sector,” the spokesperson added.

available to assist and even make personal calls to explain and find solutions,” said Zubaidah Mubarruck Ali, Director, Agensi Pekerjaan Fayyaz Sdn Bhd. “FWCMS acts as ‘problem solver’ between recruitment agencies in Malaysia and the Immigration. It is our listener and communicator, and it cuts short the process time,” she added.

Ismail Mohd Noor, CEO, Bestinet

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

Industrial Automation Case Study of the Year

Festo’s holistic technological training solutions help to upskill the competencies of individuals for Industry 4.0

Festo Delivers Industrial Training and Smart Automation to Asian Carmaker

German automation specialist Festo worked with Vietnamese auto manufacturer VinFast to set up worldclass training labs and factory systems.

hen Vietnam’s first volume automaker VinFast unveiled its initial two car models in the 2018 Paris Motor Show, it set a bold release schedule of mid-2019 amidst a vow that it would only take half the usual time to develop a new car. To make this happen, the automaker partnered with automation technology provider Festo. VinFast tapped Festo to set up several labs capable of providing training that meets the DIHK standard in Germany. Nguyen Tien Dong, Head of VinFast Training Centre, said Festo was chosen because it provides holistic training solutions in all fields of technology for industrial automation. These solutions are available in 40 languages and have benefitted over 42,000 clients worldwide. As part of the partnership, Festo provided not only training equipment, but also lab designing and training for VinFast trainers. “What Festo can provide are closely matched with what the VinFast Training Centre needs,” said Dong, noting that there are currently eight labs which house Festo solutions, including basic and advanced pneumatics, basic and advanced hydraulics, controller-sensor-fieldbus, MPS, PA and the cyberphysical learning and research platform CP Lab. 48

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

What Festo can provide are closely matched with what VinFast needs.

The VinFast Training Centre is critical in developing highly skilled workers for the carmaker’s newly built 335-hectare production complex on Cat Hai Island near Hai Phong. The training centre will ensure the factory, designed to be one of the most advanced in the world, operates smoothly despite its complex web of systems, data collection and managements systems, and interconnected sensors and cloud servers. Overcoming challenges Festo began working with VinFast in 2018, fully aware that it needed to meet the automaker’s unique

VinFast’s newest SUV model

INDUSTRIAL AUTOMATION CASE STUDY OF THE YEAR requirements, both on project timelines and local operative support. “Although there was a rather tight timeline to be kept in the delivery of components to VinFast, the swift delivery was executed successfully due to close collaboration between Festo parties from various countries,” said Nguyen Hoang Khanh, Country Manager for Vietnam, Festo. Headquartered in Germany with about 20,000 employees in over 250 branch offices in 61 countries, Festo leveraged on its global presence to accelerate its delivery schedules in the provision, installation, and commissioning of lab equipment in the VinFast training centres, as well as technical and maintenance support. VinFast leaned on Festo’s experience in providing high-quality training worldwide in local languages to upskilling a largely domestic workforce in its Vietnam plant. Festo equips VinFast employees with practical training in the use of new technologies through CP Lab, where workers can learn how to program facilities, set up networks and optimise many other aspects of the production workflow. Industrial automation solutions Besides training equipment and skills learning, Festo is a critical supplier to VinFast’s manufacturing processes, particularly industrial automation solutions via original equipment manufacturers at all stages of VinFast’s production line, from the body-in-white stage where a car body’s sheet metal components are being welded together, through to painting, sub-assembly and general assembly. Festo advised the carmaker on manufacturing solutions and provided maintenance, repair and operations. VinFast was especially keen on receiving inputs from Festo since the German company is a member of Germany’s Industry 4.0 initiative and actively involved in all key standards associations. “With the real and virtual world growing increasingly closer together, modern information and communication technologies are merging with industrial processes and increasingly changing the production landscape,” said Philippe Andre Vyain, Technical Manager at VinFast. “It is therefore important that the VinFast manufacturing facility harnesses and is integrated with Industrial 4.0 technologies to achieve greater efficiency and productivity.” “At Festo, we recognise and understand that different customers have unique needs and require different expertise at varying points of their productivity process, be it simulating engineering designs or perhaps providing maintenance support,” said Khanh. Growth in 2018 and beyond Having entered Southeast Asia in 1977, Festo continues to expand its market share in the budding region. Overseeing this business sector from Festo is Ee Sian Lee, Head of Sales Cluster for Southeast Asia and the Pacific: “2018 was a successful year for us. In terms of unit sales, we achieved record-high sales at many of our national companies.” Looking forward, Festo expects to galvanise growth in Vietnam, following major foreign direct investments in their manufacturing sector, as well as increased demand from the local market for goods made domestically as the nation continues to develop. The growth potential in Vietnam’s automotive industry is very large. The market is relatively untapped, with a low percentage of local car owners. However, this figure is set to increase as the standard of living in Vietnam rises and more people buy cars. Festo currently has offices in Hanoi and Ho Chi Minh, with competent local staff to serve the Vietnamese market. Festo also expanded its regional logistics centre in 2017 to better support the Vietnam market as well as other countries in Southeast Asia.

VinFast’s manufacturing plant in Cat Hai Island near the City of Hai Phong

Leading with innovation

With VinFast and other companies looking into cutting-edge technologies to improve their industrial production processes, Festo is continuing to invest around 8% of its revenue annually on research and development. “One of the reasons Festo is at the forefront of industrial automation is due to our strong emphasis on research and development,” said Lee, adding that the German company currently has 100 new products ready for patenting annually. In addition, Festo established the Bionic Learning Network, a research network that links the German conglomerate to leading universities, institutes, development companies and private inventors. “It is important for companies to stay ahead in terms of innovation and sustainability. As a leader in tomorrow’s world of production, we are acutely aware of our world resources,” said Lee. “Environmental protection, energy management and sustainable construction are closely linked with one another. Besides treating the environment with care, the economic and efficient use of energy in the face of advancing climate change is a key task of the current era.” Festo is also actively advancing the use of AI for industrial applications, making a big commitment in the field with its takeover of the software company Resolto in April 2018. All of these contribute to a more well-rounded delivery of solutions, as highlighted recently with its VinFast partnership. “Festo has a holistic view of the changes in the production world, considers different perspectives and – in addition to technology – also takes other key points into account, such as the interaction between man and machinery and the issue of training and qualification,” said Lee. “Likewise, the Festo solution to VinFast is comprehensive, covering both the business and training side of the house while ensuring that the manufacturing facility is also digitalised, serving as a learning factory for greater efficiency and productivity.” SINGAPORE BUSINESS REVIEW | DECEMBER 2019

FINANCIAL SERVICES CASE STUDY OF THE YEAR

Daimler’s eContracting process with just a few clicks

Daimler Financial Services unveils digital contracting technology Daimler Financial Services’ online system covers everything, from a car finance calculator to documenting and performing back-office checks.

anual car loan processing and lengthy car purchase contracts has become a thing of the past for Mercedes-Benz Financial Services Singapore (MBFS). A part of Daimler Financial Services, a global provider of comprehensive financial and mobility services, the company’s groundbreaking eContracting solution was launched in Singapore as the first end-to-end Digital Contracting in the country. This one-of-a-kind project digitises the entire contract process, covering a range of functionalities, from offering a car finance calculator to providing documentation and performing backoffice checks, even enabling clients to receive the final digital contract within minutes. With Daimler’s eContracting technology, a process that previously took days to finish can now be completed in just a few clicks. How it works eContracting is a major contributor to the company’s global focus on developing a fully digital lending experience for its customers. Using an online loan application, customers can check their finance eligibility and process loans within minutes, without 50

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

Through Daimler’s eContracting technology, a process that took days to finish can now be completed in a few clicks.

ever stepping foot in a physical bank. Upon arriving at the car dealer, sales associates use a digital pointof-sales application to scan the customer’s ID card. By using optical character recognition (OCR), the system retrieves the customer’s information and automatically updates the application. The sales associate can then retrieve the approved credit application and complete any missing information,

Local and global footprint

ith its host of benefits, eContracting has transformed the customer experience from a manual, paperbased process into a fast and convenient digital method. The process was developed within a span of just 24 weeks, and is now available in Mercedes-Benz dealerships nationwide. “The eContracting process not only brings about added customer value, but also greater operational efficiencies at the showroom,” added Eric Chan, managing director at Cycle & Carriage Singapore. Currently, one of every two Mercedes-Benz passenger cars sold is financed by MBFS Singapore. It is a company of the Daimler Financial Services Group, headquartered in Stuttgart, Germany, which does business in 40 countries and has an employee base of more

eliminating the need to manually fill out cumbersome forms. “eContracting has improved our business in terms of speed and efficiency. Filling in multiple forms can now be replaced with the simple scan of an ID,” said Kliff Lim, sales executive at Passenger Cars. The dealer can also upload any required documentation and digitally trigger the creation of the contract. Once this is completed, the client will then receive a message on his or her smartphone using OTP secure technology. This allows the client to validate terms and digitally sign the electronic contract using ‘click to sign’ technology. This technology enables customers to sign the contract anytime, anywhere using their mobile device of choice. The system will then trigger automated back-office processes such as auto activation of the contract, which will allow clients to set up regular monthly payments from their bank account. The system also allows for the automatic disbursement of payments to the car dealer. “Customers can now apply for credit online, get real-time approval, and sign their contract digitally. For the dealer, it gives them the ability to transact after hours, and for our employees, of course, it creates a better working experience as they don’t have to process papers manually anymore,” shared Anamika Talwar, managing director of Mercedes-Benz Financial Services Singapore.

than 12,000 people globally. Daimler Financial Services Africa & Asia Pacific is headquartered in Singapore and provides innovative financing, leasing, and insurance for passenger cars and commercial vehicles from the Daimler Group, as well as dealer financial services and commercial fleet management. It is present in 11 markets and has more than 1,300 employees.

Secure a digital contract in minutes

FINANCIAL TECHNOLOGY CASE STUDY OF THE YEAR

CoAssets Pte Ltd’s online investment platform connects retail investors to unique projects from a variety of industries.

High-yield alternative investments for the average Singaporean Through CoAssets Pte Ltd’s digital platform, new and experienced investors have the opportunity to back movie projects for as low as $5,000.

hen Bryan, an executive at a top Singaporean bank, wanted to diversify his investment portfolio, he considered lending money to businesses via debt crowdfunders and ended up selecting CoAssets Pte Ltd (CAPL), an online investment platform in Singapore, which is a subsidiary of CoAssets Limited (hereafter, CoAssets) in the Australian Securities Exchange (ASX: CA8). “They have been around for 6 years and they provide quality deals on their platform,” said Bryan. “They have also managed to keep their default rates low which is definitely a plus point.” CoAssets Pte Ltd (CAPL) connects Singaporean investors like Bryan to a wider variety of passive income projects, and in 2018, the platform’s non-performing loan rates for loans past 90 days improved to 0% from 2.2% in 2017. Meanwhile, the weighted annual rate of return was 9.91% in 2018. The debt-based investment platform has grown its registered investor base to more than 60,000 members across the island since it was set up in 2013 by entrepreneur, Getty Goh, and Dr. Seh Huan Kiat,

What makes CoAssets Pte Ltd stand out is they’re regulated and licensed by MAS in Singapore.

who were on a mission to make highyield investments more accessible to the average Singaporean. “We aim to provide investment opportunities for the mass market. Traditionally, it takes a large sum of capital and an exclusive network to find interesting and suitable investment opportunities in a variety of markets and asset classes,” said Getty Goh, CEO of CoAssets Ltd. “Peer-to-peer lending, through

Beyond Singapore

n Hong Kong, CoAssets engages in financial technology advisory services with Fintech Pte Ltd and has an associate company, Brighten Finance Ltd, which has a money lending license. Meanwhile in China, CoAssets funded cumulative deals of RMB 58.94 million in the last 12 months. The platform has been particularly aggressive in user acquisition, driven primarily through the conversion of Da Xian Bing (DXB) users. “By working closely with DXB through the use of dual signup and shared login, and refining the user experience, we expect to be able to continue growing our new user conversion rate,” said Goh. CoAssets’ strategy in China to attract users through technology-driven improvements

CAPL, offers the regular man on the street a simple way to get on board and tap into different markets,” he added. With an average minimum investment of $5,000, investors can back an array of projects in industries. Jun Kai, a Singaporean engineer currently employed in Japan, invested in a movie project starring Aaron Kwok, citing the absence of platform fees charged to investors and low default rates (0% in 2018) as factors that make the platform better than rivals. “What makes CAPL stand out from other global crowdfunding companies is that they’re regulated and licensed by MAS in Singapore and it gives me a greater sense of assurance,” added Jun Kai, referring to CAPL securing a Capital Markets Services license in 2017. To reduce risks, CoAssets conducts extensive due diligence and even developed a risk assessment model (CRAM) with one of the top four global accounting firms. CoAssets says the platform also attracts high-net-worth individuals. “The company has used Singapore’s branding and location to build strong business relationships with partners in other Asia-Pacific countries such as China and Hong Kong, working with family offices, loan brokers and alternate financing companies to uncover investment opportunities,” said Goh.

on its platform follows CAPL’s success in Singapore where it integrated the online platform via iOS and Android apps. “We can simply ‘invest’ with a touch of a button and CAPL’s [user engagement] managers will follow up with you upon confirmation. This makes the process efficient and seamless,” said Bryan.

Getty Goh, Executive Chairman and CEO of CoAssets Ltd.

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

CHEMICAL

United Global delivers higher profits as it explores M&A and new businesses

The Group is exploring the possibility of developing sub-brands to facilitate its entry into new and existing markets.

atalist-listed United Global Limited of an equity stake in the Group’s subsidiary, looks set to soar, with mid-year United Oil Company Pte Ltd. figures bringing good news for the This year, as United Global celebrates its corporation and its shareholders. With net 20th anniversary, the company received profit attributable to shareholders (for the Singapore Business Review Listed the three months ended 30 June 2019) Companies Award 2019 (Chemicals), in jumping 2.7 times to US$2.4 million, the recognition of its unique and innovative independent lubricant manufacturer and practices. Jacky Tan, United Global’s trader continues to grow its presence and Executive Director and CEO, attributed profit within the region. the win to the Group’s efforts in In November 2018, the building excellence and innovation. “The steadily Group incorporated a whollySince its inception in 1999, increasing numbers owned company, United United Global has continued to can be attributed produce a wide range of high Renewables Company Pte to astute business quality, well-engineered lubricants. Ltd, with the intention of exploring opportunities in It has also expanded its target moves, such as the renewables industry. In exporting goods markets by diversifying its inDecember that same year, to a joint venture house brands to include United Oil, the Group started making U Star Lube, Bell1, HydroPure and partner, which inroads into the Philippines Ichiro. boosted United through a 45% stake in With the Group’s in-house R&D Global’s trading facility, United Global is committed a joint venture company, volume and United Fuels Alliance Pte to developing new products and contributed to Ltd, which operates a 30,000 processes, as well as improving Group revenue existing product formulations and cubic metre storage facility rising 60.8% to in Subic Bay Freeport Zone processes. US$39.4m. ” and supplies fuels to more United Global’s competitive than 75 retail fuel stations in edge lies in its ability to customise the country. products to cater to new technology and The Group has also continued exploring machines that its customers may use. business opportunities outside of the Over the years, the Group has grown its region. On 23 April 2019, it extended distribution network within Asia Pacific and its MOU with Spanish oil major, Repsol new markets, for instance, in Africa and the Lubricantes Y Especialidades, S.A. for an Middle East. additional six months to 21 October 2019. While lubricants was its core product, Repsol is presently working on completing the Group looked out for opportunities to a feasibility study to explore the acquisition diversify and grow the company sustainably.

United Global’s production plant in Indonesia

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

In October 2017, United Global formed a 40% joint venture with M-TechX Group of Japan to produce oil-absorbent nanofibre materials. While M-TechX owns the technology to this new and exclusive technology for the mass production and commercialization of nano-fibre, United Global will leverage on its extensive distribution channels across more than 30 countries to cross-market the nano fibres that the joint venture company is producing. Tan said that the Group had faith in nano-fibre’s commercial potential, given its “superior absorption capability and versatility for use in various applications and industries.” Nano-fibres are known for high absorption rates, strong adhesion, and high molecular recognition. These properties have been proven to be useful in a wide variety of industrial applications such as oil absorption, thermal insulation for construction, sound absorption for automotive, and filters for airconditioning ad purification. Tan noted that while United Global’s initial focus will be on developing markets in Japan, Indonesia, and Singapore, the Group hopes to eventually begin scaling operations on a global level. The Group is also exploring the possibility of developing sub-brands to facilitate its entry into both new and existing markets. Looking towards the future, management will continue to look at growth opportunities such as entrenching its presence in markets, adding new distribution points around the globe, expanding its product range, and exploring M&A opportunities. With solid numbers and promising future plans, United Global is definitely a company to keep on your radar.

United Global’s production plant in Tuas, Singapore

HEALTH PRODUCTS & SERVICES

Asian Healthcare Specialists, operating under “The Orthopaedic Centre” brand, won at Singapore Business Review’s Listed Companies Awards 2019 The group’s core business is supplemented by specialist anaesthetic capabilities as well as an in-house physiotherapy practice.

n July 11, Asian Healthcare Specialists Limited was recognised by Singapore Business Review as an outstanding healthcare company, receiving the SBR Listed Companies Awards 2019 – Health Products and Services category. About Asian Healthcare Specialists Operating under “The Orthopaedic Centre” brand, Asian Healthcare Specialists are an experienced group of orthopaedic specialists who provide a wide spectrum of general and subspecialised orthopaedic, trauma and sports services, such as knee/ hip replacements, sports medicine/ surgery, spine surgery, foot/ankle surgery and minimally invasive orthopaedic procedures. Each of the medical specialists are subspecialists in specific areas of orthopaedic, trauma and sports medicine, ranging from specialities in spine (neck and back), shoulder, elbow, hip, knee and foot and ankle. The core business is supplemented by specialist anaesthetic capabilities as well as an in-house physiotherapy practice. The Group aims to be a one-stop integrated healthcare provider for all musculoskeletalrelated medical care, including postsurgery rehabilitation services such as physiotherapy and ancillary services such as pain management. Bringing life to ageing joints The human body is made to move. Being active throughout your life has immeasurable benefits, adding years to your life and quality to those years. Orthopaedic surgeons help to treat and prevent problems in the spine and four limbs, getting you back into shape for the challenges in the coming years. The team at The Orthopaedic Centre comprises a team of highly specialised surgeons, anaesthetists, and physiotherapists to provide the most advanced and comprehensive treatment—employing minimally invasive techniques, including state-of-the-art computer-assisted and robotic technology to deliver safe and effective treatments to the patients.

Dr. Yue Wai Mun, Chief Medical Officer, receiving the award on behalf of Asian Healthcare Specialists Limited

“Our goal is, and has always been, to give movement, quality and life to years.” A joint effort To help patients with all their bone and joint problems, the combined expertise of a group of orthopaedic surgeons with subspecialty interests in the spine, shoulder, elbow, hip, knee, foot, and ankle is essential. All aspects of orthopaedic problems are covered, ranging from developmental (e.g., flat foot, curved spine), traumatic, and sporting injuries (e.g., fractures, dislocations and ligament tears) to degenerative joint problems (e.g., painful bunions, arthritic knees, and chronic back pain). An anaesthetist experienced in dealing with orthopaedic patients has recently been added to the team to ensure patients’ surgeries go smoothly and safely. The team of physiotherapists works closely with the doctors to aid patients in their recovery before and after surgery. Less is more Minimally invasive surgery means doing the surgery without causing unnecessary damage to the surrounding tissues. In the limbs, this is done by using keyhole techniques with an arthroscope (a camera for the joint). Minimally invasive surgery in the spine is also possible with the help of microscopes and usage of X-ray machines in the operating theatre. The benefits include less pain, less bleeding, and faster recovery with smaller cosmetically

pleasing scars. It can also decrease the length of hospital stay and time off work. Advanced Technology The use of computer-aided and robotic surgery in the knee is a good example of how to employ the latest technology for patients’ benefit. The knee joint replacement surgery is more accurate, delivering reproducible and consistent results. Advanced cartilage regeneration procedures employing the latest techniques offer patients a chance to repair and preserve their joints, perhaps even to avoid a joint replacement in the future. Sustainability Sustainability is intrinsically a part of our mission. As our utmost priority in decision-making and our guiding doctrine, we also take into consideration the best interests of our stakeholders such as our patients. Our goal is, and has always been, to give movement, quality and life to years. This ethical foundation ties in with sustainability, where we consider the interest of all our stakeholders and focus on the longer-term prospectus of the Group,” said Dr. Yue Wai Mun, Chief Medical Officer of Asian Healthcare Specialists Limited. SINGAPORE BUSINESS REVIEW | DECEMBER 2019

TECHNOLOGY

Biolidics: Bringing Clarity to Cancer Biolidics is disrupting the cancer diagnostic market with its liquid biopsy technology and solutions.

ancer remains one of the world’s biggest medical challenges and the increased prevalence of cancer has inadvertently created an area of enormous opportunity. Biolidics’ technology is focused on many important unmet medical needs in the cancer diagnostics field that provide improved outcomes for individual patients. Revolutionising cancer diagnostics As a medical tech company, Biolidics’ journey started in 2009 as a spinoff from the National University of Singapore with a core mission, lowering healthcare costs and improving clinical outcomes for cancer patients with its technology innovations. Since then, Biolidics has developed and commercialised the ClearCell® FX1 System, a fully automated CE-IVD medical device which relies on a novel patented technology to separate and enrich cancer cells from biofluids (e.g., blood). The ClearCell® FX1 System allows users of the system to perform liquid biopsies to test for the presence of cancer cells (specifically circulating tumour cells, or CTCs) in blood samples or perform further analysis on cancer cells. Due to its minimally invasive nature, liquid biopsies (e.g., analysis of the circulating tumour cells in blood samples) are useful at various points of the diagnostic and treatment journey of cancer patients. Of these techniques, the analysis of CTCs, as employed in Biolidics’ ClearCell® FX1 System, has been noted to be highly developed, as the presence of CTCs is a fundamental prerequisite to metastasis and their enrichment and characterisation offers potential for many applications throughout the various stages of a patient’s cancer journey, from cancer screening and staging to personalised treatment, and post-cancer monitoring. As a result, cancer patients can minimise invasive procedures, improve clinical outcomes, and optimise cost and

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

efficiency with the laboratory developed tests that utilise Biolidics’ technology.

Once these laboratory developed tests are approved clinically, it is expected to lead to an increase the demand for Upstream liquid biopsy technology ClearCell® FX1 System and higher usage Biolidics recognised that technology of CTChip® FR1, which are required to innovation alone is not enough to meet perform the liquid biopsy tests. access to patients and growth objectives. Biolidics is also strengthening its Biolidics developed the ClearCell® FX1 market presence in Asia, providing other System as a platform IP technology with opportunities to expand its offerings new business models to further enhance through services, partnerships and the commercial scalability, allowing its market expansion. products to be used in a greater number of hospitals and laboratories globally. Creating value for stakeholders Enhancing the market position of its 2018 was a momentous year for products in China, Japan, the EU and the Biolidics as it successfully listed on the US, Biolidics’ technology and equipment Catalist Board of the SGX-ST, raising have been gaining more awareness $6.1m in net proceeds to expand the and interest, which is validated by its company’s clinical services applications strategic partnerships with leading and customer segment, advance its industry players and established pipeline products as well as for general healthcare institutions. corporate and working capital purposes. Biolidics’ quality assurance capabilities Since its IPO listing, Biolidics have been recognised through its ISO has gained strong traction in its 13485 certification, CE-IVD, US FDA expansion plans and improved financial Class I registration and NMPA (formerly performance. For its half-year results, CFDA) Class I registration (for the MGI Biolidics’ revenue surged 50.0% with EasyCell System). increased sales of its ClearCell® FX1 System and CTChip® FR1 biochip. Global endorsements & partnerships Ivan Lew, executive director and CEO, Underscoring the strengths of its said, “Our roadmap ahead is clear with technological capabilities, Biolidics our strong technology leadership and has entered into five partnerships, a relentless focus on the commercial four in China and one with Sysmex applications of our technology Corporation, for the development and business performance of the and commercialisation of laboratory company. Our challenges ahead may be developed tests using Biolidics’ ClearCell® substantial, but our opportunities are far FX1 System and CTChip® FR1 biochip. greater.”

Analysis System. Analysisofofcirculating circulatingtumour tumourcells cellsininblood bloodsamples samplesisismade madeeasier easierwith withClearCell ClearCell®®FX1 FX1.

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

FOOD & BEVERAGE 2019

The 500-sqft boutique serves as a hub for whisky education and experience.

Edrington Singapore launches the The Macallan Boutique @ 1855 Maker of premium Scotch whiskies partnered with local premium wine & spirits retailer for a first-of-its-kind downtown boutique.

he Macallan Boutique @ 1855 is a first-of-its-kind downtown boutique in partnership between Edrington Singapore and leading local premium wine and spirits retailer 1855 The Bottle Shop. Located at Marina One, the quaint Boutique measures a space that fully encapsulates the brand essence of The Macallan—one of the world’s most admired and awarded single malts whose reputation is based on a product of outstanding quality and distinctive character. The 500-sqft boutique aspires to be a hub of exploration, education and experience,

bringing to life the brand’s foundation and promise with a compelling narrative. It seeks to be a platform for the brand to consistently engage with its consumers and create a lasting impression for both fans and new consumers alike. As guests step into the retail space, a charming tasting bar awaits them, where they can look forward to a guided flight tasting of The Macallan whiskies hosted by The Macallan Boutique Associate. Two options of whisky flights will delight your senses where one can easily make a booking via the newly launched booking platform:

“It has always been our vision to create a space in Singapore that showcases our products and weaves in our brand story beautifully.”

The Macallan Trilogy – A Mastery of Wood is a flight of three 12-year-old expressions— Sherry Oak, Double Cask and Triple Cask Matured. This collection of cask-led flavours unveils the skills and craft of The Macallan Masters. The Macallan Exceptional Oak Casks flight comprise Sherry Oak 12 Years Old, Triple Cask Matured 15 Years Old and Rare Cask, exhibiting the art of cask selection and The Macallan's unrivaled dedication to the quality of wood. The Macallan’s extensive range of exquisite whiskies, limited editions and merchandise are available at this flagship boutique. Expect the core 12-year-old age statements of Sherry Oak, Double Cask and Triple Cask Matured, as well as the prestigious Masters Decanter Series— Reflexion, No. 6 and M. Those uncertain of which expression to take home will be pleased to find an interactive screen which provides guidance to the art of choosing the perfect bottle for every occasion, based on their preferred tasting notes and serving style. The in-house boutique associate will also be on hand to ensure each bottle is an informed purchase made with confidence. As a result of innovation, inspiration and collaboration, this experiential space won the Singapore Business Review International Business Awards in the Food & Beverage category. Coral Gill, regional brand director of Asia Pacific, said “The opening of The Macallan Boutique @ 1855 marks a monumental moment for the brand. It has always been our vision to create and own a space in Singapore that showcases our products and weaves in our brand story so beautifully. Our commitment to delivering the best experiences to fans and consumers remain steadfast and it’s exciting to see the progress of this Boutique unfold—it is definitely a game changer.”

CONTACT For Bookings: https://www.themacallan.com/ en-sg/Macallan-Singapore-Boutique Facebook: Facebook.com/TheMacallan.sg Instagram: @TheMacallan_Singapore Phone number : (65) 6602 8228 Address: Marina One, 5 Straits View, #01-24 Singapore 018935 Opening Hours: Monday to Friday, 12–9PM A Macallan boutique associate captains the bar for your preferred whisky flight.

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

MANUFACTURING 2019

Ardentec strives toward customer satisfaction with reinvented engineering design The company and a vendor co-developed a measurement gauge and pogo pin solution to improve the TDR success rate.

here are numerous companies specialising in providing semicon assembly and test services but only a few are able to nurture their customers with absolute perfection— Ardentec holds the attitude of integrity and the spirit of continuous improvement towards total customer satisfaction and strive for the innovative testing technology. Dacing the challenges entailed with a poor pogo pin design and the absence of a reference value for the Tester Head Docking and Redocking Process, Ardentec Singapore Pte Ltd partnered with a vendor to co-develop a measurement gauge and reinvented the pogo pin to a four-point crown tip design. With this innovation and the adoption of new technologies, Ardentec Singapore received the Manufacturing Award during the recently concluded International Business Awards. Being the extended arm of Ardentec Corporation Taiwan (as a strategic location) in Southeast Asia, the company is dedicated to providing its regional customers with better services through a shorter cycle time to meet their demands. Ardentec is believed to be a perennial company with its engineering capabilities, technical innovations, employee endeavours and passion. Ardentec observed that timedomain reflectometry (TDR) is the top contributor amongst machine downrate failure modes. TDR applies a signal input into a transmission line and measures a reflected return signal as a function of time, reflecting the electrical quality of

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

“Ardentec holds the attitude of integrity and the spirit of continous improvement towards total customer satisfaction. ” signal paths from a tester channel to a probe card’s tip. Over a 6-month period from August 2017 to January 2018, the company’s J750 tester platform recorded an average monthly TDR failure count of 140 cases, which contributes about 43% of TDR failure rate. Each time the TDR fails, the tester has to be down for further troubleshooting as it will impact the wafer electrical testing result to customer if it is not fixed. Typically, this failure takes two hours to recover the tester system. At present, troubleshooting is conducted blindly without any reference value for the Tester Head Docking and Redocking Process. Test head planarity gap can cause pogo pins to have uneven compression force and can lead to TDR failures. Meanwhile, the docking head’s offset loading force can cause the pogo pin to be abnormally worn out, thereby resulting to an intermittent contact issue. The existing design of the pogo pin results to a poor contact between the pogo tower and the probe card, which is the fixture used for wafer electrical testing. On the other hand, the single plunger tip design causes the contact to be deteriorated due to wear and tear coupled with wafer electrical testing during production. To solve this, Ardentec co-developed with a vendor a measurement gauge for tester head planarity check and initiated to redesign the pogo pin. Because of its ineffective single

plunger tip structure, the pogo pin was redesigned to a four-point crown tip design to have better contact between the pogo tower and the probe card. This four-point crown tip pogo pin design has been patented and used since the 2nd half of 2018. With these solutions, the TDR success rate has significantly and consistently improved from 57% in January 2018 to around 90% from November 2018 to March 2019. The troubleshooting time required to fix TDR failure was also reduced from two hours to 30 minutes per case. The TDR failure rate improved from an average of 140 cases per month to an average of 32 cases monthly, thereby reducing downtime. This saves 264 hours spent in downtime per month, which the company can utilise for production. For these innovative solutions and enhanced results, Ardentec Singapore received the Manufacturing Award during the recently concluded International Business Awards, presented by Singapore Business Review. The branch was also hailed runner-up across Ardentec Group’s company-wide QCC competition, earning the qualification to represent Ardentec in the Taiwan regional-wide QCC Competition in 2019. The Singapore Economic Development Board has filed these manufacturing innovations as a Productivity Grant Project.

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

SINGAPORE SINGAPOREBUSINESS BUSINESSREVIEW REVIEW ||SEPTEMBER DECEMBER 2019

OPINION

NEERAJ SUNDARAJOO Adapting to the world of cloud kitchens in Singapore

ood tech has become an exciting place to in the last few years as an increasing number of players look to tap into a nearinsatiable appetite for food delivery services. The numbers are staggering, to say the least. According to data published by Statista, the revenues in the online food delivery space in Asia will amount to over US$58b in 2019, with a projected CAGR of 10.5%. Over 60% of this revenue comes from the platform-to-consumer delivery segment. In Singapore itself, the online food delivery services revenue is expected to be over US$342m this year, growing at over 27% YoY. By 2023, this figure is forecast to be close to US$600m. Whilst food delivery is all the rage and perhaps justifiably so owing to its consumer-facing nature, there is an equally significant shift in another part of the food supply and delivery chain with the emergence of cloud kitchens or remote, centralised kitchens (some are even calling these ‘Ghost kitchens’). Several cloud kitchens have opened in Singapore in just the last year. These include a 13,000 sqft facility by Smart City Kitchens in Tampines, three by Deliveroo and two by Foodpanda, and we expect some more to mushroom in the near future. Online delivery platforms disrupted the marketing and distribution of the finished product, cloud kitchens are disrupting the production cycle. To be clear, the idea of remote centralised kitchens isn’t entirely new—catering services for airlines that have relied on the facilities of a centralised kitchen is just one case in point. But, as with most industries and segments that have been disrupted by technology, the lower barrier to entry and promise of scale at significantly lower costs that cloud kitchens promise F&B operators are irrevocably altering the F&B landscape. Words like ‘aggregation’ and ‘assetlight’ that are associated with so many modern businesses are now a part of the F&B business lexicon as well. Kitchens are the next frontier of the other kind of SaaS business (Space-as-a-Service) after shared offices & workspaces! The appeal of cloud kitchens Prima facie, cloud kitchens offer a win-win proposition for both F&B operators and consumers. Convenience and choice are probably two of the biggest attractions for consumers ordering from delivery platforms. As more restaurants—both existing brickand-mortar ones as well as emerging delivery-only ones—opt to use cloud kitchens and expand their reach to a wider audience, consumers will eventually benefit on all the aforesaid fronts. This in turn completes a virtuous cycle with a boost in consumption that the restaurants benefit from. On the other hand, saving in space and initial set-up costs is the key draw for restaurants and F&B operators, especially in a city like Singapore with its high property rental costs. Many of the main selling points of subscription-based software solutions such as low initial capital investment, reasonable recurring costs and not 64

SINGAPORE BUSINESS REVIEW | DECEMBER 2019

NEERAJ SUNDARAJOO Co-founder & CEO Zeemart

being bound by long-term commitments are applicable to those ‘subscribing’ to be a member of a cloud kitchen. The potential to increase their reach and revenues without being constrained by their physical location and the speed to market are the other advantages. Whilst cloud kitchens seem a lot more appealing to delivery-only food businesses and start-up restaurants, they also provide popular brick-and-mortar restaurants that currently face the pleasant problem of customer-queues and waiting times with a cost-effective means to scale their operations to new areas leveraging on the data and consumption patterns of the area. Another area where I believe cloud kitchens will have an important role to play in the very near future is in the realm on storage and inventory management. From the efficiencies and economies of scale of group procurement to just-in-time inventories, possibilities galore. How exactly these opportunities manifest will be worth paying close attention to. The need for prudence Whilst the proliferation of cloud kitchens seems likely to enhance F&B operators’ profitability, be it with increased revenues or better operational efficiencies and reduced costs, I recommend that F&B owners in Singapore be prudent and exercise due caution before jumping on the bandwagon. Some aspects that they need to look at closely include: Cost-benefit Just as ‘offshoring’ may not yield the same financial benefits for all businesses, operating from a remote kitchen may not be best option for several restaurants. A restaurant owner should carry out thorough due diligence and evaluation of the unit economics of the operation. Typically, a brick-and-mortar restaurant spends about 10-20% on its real estate costs, about 30% on food costs and 20-30% on labour. A cloud kitchen is likely to make the biggest impact on the real estate cost aspect, but it is for a restaurant owner to determine whether optimising other parts of the business may yield better outcomes. Terms & conditions Getting complete clarity of the terms and conditions of the cloud kitchen operator and being comfortable with those is important to avoid complications further down the line. These include the more obvious potentially contentious issues like hidden costs and exit clauses to ambiguous but equally serious issues such as exclusivity. Recent developments in Singapore where restaurants operating from a certain cloud kitchen were not allowed on some delivery platforms are a stark reminder that a restaurant needs to cover all bases to protect their business lest they be caught blind-sided.

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