Daily Management Review

More Firms In Singapore Move Online As Covid Upend Their Physical Business


More Firms In Singapore Move Online As Covid Upend Their Physical Business
The disruption to the brick-and-mortar operations of companies of Singapore caused by the covid-19 pandemic is forcing more companies from the city state to move their business online to adapt to the new trend of online shopping. 
The pandemic even forced a rethink of their business strategies among even small and medium sized companies which previously paid little focus to sell online.
“Pre-Covid, there could have been a little bit of hesitancy, in adopting some of these e-commerce strategies. They will say, no, it takes up too much time. It requires a lot of resources, a lot of investments,” Selena Ling, chief economist at OCBC bank, said on a television interview.
“But I think what has changed in terms of the mindset, really, in the past 12 to 15 months, is that it’s a ‘do-or-die’ kind of approach,” she added.
A large number of businesses, including the smaller ones, have had to set up a digital business model in Singapore because of the pandemic.
A so called “circuit breaker” — or a partial lockdown that forced most people to stay and work from home, was imposed by Singapore’s government in order to prevent the spread of the covid-19 causing virus at the peak of the pandemic last year. Ling said that resulted in many retailers and manufacturers not being able to open their physical stores.
“A lot of the businesses, even smaller ones had to pivot to this digital model. And I think a lot of the policy support has also been angled towards trying to help the smaller companies to adopt a digital strategy,” she said.
Many of the domestic brands and smaller players were driven to adapt to the changes and shift online because of the pandemic, said James Chang, CEO of Lazada Singapore, echoing the sentiments of Ling.
“Actually, (the) pandemic really drove a lot of e-commerce adoptions. In three different areas — one is many of the brands went online and many of the SMEs have started the business online,” he said, referring to small- and medium-sized enterprises. “The buyer adoption has really expedited.”
The Singapore based online retailer Lazada, the current leader in Southeast Asia, is presently engaged in helping SMEs to develop a presence of their e-commerce arms in the city-state.
“In order for an entrepreneur to start their retail business, the cost of entering has been very high. If we can bring down the barrier to the entry, we believe we can really foster and energize a much more vibrant entrepreneurial scene, which can be the foundational pillar to bring more SMEs on to doing business,” said Chang.
Since the Covid-19 pandemic hit the city state, a lot of support in propelling forward digital agendas for domestic businesses was also provided by the Singapore government.
“I think Singapore has been really supportive of enterprises both large and small, especially during macro-economic shifts such as Covid. The local government has been very supportive in wage grants, in helping to retrain and rescale,” said Henry Chan, co-founder and CEO of local e-commerce company, ShopBack.
“I think one of the big things that Singapore has done is create a financing environment that’s very attractive to young firms starting up,” said James Root, senior partner and chairman at Bain Futures, a global think tank at consulting firm Bain & Company. “Ten years ago, that wasn’t necessarily the case. You’d be hard pushed to find more than a couple of venture capital firms.”