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RISE OF THE MACHINES

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ARE DOWN THE NEED FOR GOOD

STEWARDSHIP WILL 2017 SEE THE

“GREAT ADJUSTMENT”? ARE E-TAILERS READY FOR AMAZON’S ENTRY? 75 73

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AUDITED CIRCULATION: 24,794 ONLINE READERSHIP: 215,000 monthly uniques through Google Analytics The Singapore Business Review is the highest circulating and best read business magazine in Singapore. Our online readership has an average of 215,000 unique viewers, according to Google Analytics. We won the Business/Professional Media of the Year category at the 2016 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 production editor Terry Gangcuangco GRAPHIC ARTIST Elizabeth Indoy ADVERTISING CONTACT Rochelle Romero rochelle@charltonmediamail.com Angelica Biso angelica@charltonmediamail.com ACCOUNTS DEPARTMENT ADMINISTRATION accounts@charltonmediamail.com

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CONTENTS

INDUSTRY INSIGHT

prepared are e-tailers for 20 How Amazon’s entry?

Management excellence awards

COVER STORY

28 Fintech and property dominate 2017 list FIRST 10 When the chips are down,

16 Companies need good stewardship in addition to good corporate governance

11 Solar panels a bright spot

22 How to sell on Amazon in Singapore

12 The rise of the machines 14 Correlations you need to know

RANKINGS

INTERVIEWS

who’s ahead? for Singapore’s reservoirs

recognises firms and 44 SBR individuals leading the pack

32 Regional demand provides opportunities to law firms

36 Insurance firms play catch up with digital disruptors

REGULAR 24 Financial Insight 38 Legal Briefing 40 CMO Briefing

Published Bi-monthly on the Second week of the Month by Charlton Media Group 101 Cecil St. #17-09 Tong Eng Building 2 SINGAPORE SingaporeBUSINESS 069533 REVIEW | MARCH 2017

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COMMERCIAL PROPERTY

TELECOM & INTERNET

HOTELS & TOURISM

Sheng Siong locks horns with smaller M1’s roaming revenue slumps as players for HDB sites subscribers switch to OTT services

Take a peek at Singapore’s most valuable tourist attractions

UOB KayHian said, “Even though the competition for HDB commercial units remains stiff with the last three winning bids coming in as high as S$20.65 psf, the big players, NTUC Fairprice, SSG, and Cold Storage, have conducted bidding in a more rational manner.” Smaller supermarket operators have driven up prices for smaller HDB commercial units.

Subscribers wanting to make overseas calls now rely on over-thetop players, leading to the decline in roaming revenue for Singapore telco giant M1. According to DBS Vickers Securities, M1’s roaming revenue, which accounts for about 10% of its mobile yields, has continuously declined on a QoQ basis over the past eight quarters, with revenues dropping to as much as $7m.

Over the past years, Singapore has been investing in attracting tourists and visitors by promoting a number of attractions. A study by Brandscapes Worldwide revealed that Singapore is a leading tourist destination in Asia, ahead of Hong Kong, Kuala Lumpur, Bali, and Bangkok. The study found out that six of the top 11 tourist attractions in Asia are in Singapore.

Top 5 digital marketing trends in Singapore for 2017 BY TED CHONG We all know the importance of staying ahead of the curve in business and not going in the footsteps of companies such as Nokia, Kodak, Borders, etc. In this rapidly changing technology world, it is all the more crucial to keep ourselves updated of the latest trends in our bid to move things forward. In recent years, a lot more new technologies and platforms have emerged including the likes of Snapchat, Pokemon, and so on.

MAS regulatory changes create new job opportunities in audit, risk & compliance BY LYNNE ROEDER The Monetary Authority of Singapore’s regulatory changes in 2016 and planned reforms throughout 2017 has seen many financial institutions launch a recruitment drive for regulatory reporting professionals and risk control experts. This is one key finding from the latest Hays Quarterly Report for the January to March quarter.

MOST READ COMMENTARY Disruptive innovations: The case of the airline industry BY JOHANNES BOROH According to academics and scholars – such as Clayton Christensen, the father of disruptive innovation theory – disruptive technologies or innovations have several attributes. First, they introduce a different package of performance qualities from the current common technologies or products (underperforming the current ones). Second, they initially target small niche markets or customers.

4 SINGAPORE BUSINESS REVIEW | MARCH 2017


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Agenda PEOPLE | PLACES | SERVICES | OPPORTUNITIES

MEMBER OF THE RCMA GROUP

services

OPPORTUNITIES

iSwitch energy

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East Asia Institute of Management (EASB) is a four-year EduTrust certified private education institution. We offer Diploma, Bachelor’s Degree, Master’s Degree, and MBA programmes. Major disciplines include Hospitality and Tourism Management, Business Management, Accounting, Banking & Finance, Medical Bioscience, and many more. For more information, visit www.easb.edu.sg

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Co-published corporate profile

Maintaining a happy, safe, and effective school for overseas families in Singapore

The OFS welcoming environment aims to help students excel in many different ways whilst developing well-rounded individuals and fostering diversity.

T

he classroom is not the only setting for staff, almost all Singaporean. This means children’s development. Whilst subjects that the academic staff including Principals undoubtedly help students learn, there focus exclusively on teaching and guiding the are other factors to be considered that students, and developing the curriculum. make educational institutions conducive to OFS teachers currently come from around knowledge and wisdom, to learning. Thus, 40 countries, are globally focussed as a group, for families who have just moved into the city- and can extend their thinking and teaching state or just methodologies “...To sustain modern looking for a beyond national teaching policies and fresh start for systems. OFS school methods which give their children’s policy recognises the learning, individuality of every students positive finding the attitudes to learning.” student and their perfect school individual needs. is undoubtedly a major task. Overseas Family OFS teachers receive on-going and in-depth School (OFS), since its founding in 1991, has training, to ensure consistency in academic always been at the forefront of promoting standards, and coordinating their previous education that is not just limited to teaching training and experience. students various subjects. The school also OFS is authorised by the International helps students interact with the world and Baccalaureate Organisation (IB) for its Middle others around them – equally important as and High Schools, and offers the International what is taught inside the classroom. Primary Curriculum (IPC) for its Kindergarten and Elementary School. In addition, OFS Emphasis on learning offers the IGCSE examinations, administered At OFS, a modern education for the children by Cambridge International Examination is the main focus, notes its chairman, David Centre, UK, to its Grade 10 students. The Perry. The school’s administrative duties are school is also accredited K-12 by the Western undertaken by about 150 administrative Association of Schools and Colleges,

OFS focusses on individual needs of every student

8 SINGAPORE BUSINESS REVIEW | MARCH 2017

All students are taught the fundamentals of chess

California, USA (WASC). The OFS experience includes the Study Preparation Programme (SPP), which prepares students for reading, writing, listening, and speaking their lessons in English. Students study the content of the mainstream subjects, whilst at the same time converting to English as their language of instruction. OFS’ academic objectives include: “To focus on the individual needs of every student and to provide a supportive atmosphere designed to help students achieve personal academic goals.” Also, “To sustain modern teaching policies and methods which give students positive attitudes to learning.” OFS has recently completed its 25th year as a foreign system school serving the overseas community in Singapore, with students from over 70 countries attending the school. The move to its new campus in July 2015 enthused students from day one. More than the school setting, however, OFS offers a whole lot more. Integrating Mother Tongue languages OFS also includes a Mother Tongue support program in its curriculum. Many children moving into Singapore from their home country, where a different language is


Co-published corporate profile

Students learn how to understand and appreciate OFS’ extensive cultural diversity

students participate in Chess and Math spoken, tend to lose their mother tongue multiracial and multicultural communities, Coding classes, further enhances the as their primary thought language. Recent OFS students naturally and without any intellectual development of students. The academic research suggests when young pressure, learn how to understand and school has a large and fully equipped chess children lose their mother tongue as their appreciate the extensive cultural diversity of room with demo-boards, chess sets, and primary thought language, their ability to their school, and often share their insights timing clocks for all players. Chess lessons are learn can slow down. This is not a permanent with their parents. The teaching staff effect, but at a critical time of their schooling, recognise the benefits of multiculturalism and conducted by an internationally-recognised Chess Master and his assistant. Worksheets at mental processing they see students in “OFS has a ‘minimum when all levels are available so students can further ability may be in the classroom from all over rules, minimum improve tactical skills. All students are taught decline. That can have the world, they recognise punishments’ the fundamentals of chess and they practise a detrimental effect a great opportunity. Class during their scheduled lessons, plus there are on their learning in discussions often elicit philosophy.” many extra opportunities that are available to these vital early years. different perspectives help them improve their strategies and skills. OFS is therefore providing more and rarely is there a uniform response. The Math Coding at OFS, meanwhile, opportunities for its students to maintain and children naturally receive a wide range of involves students learning to code a set of develop their respective mother tongues. OFS perspectives on issues discussed in school. precise instructions that the computer can offers Mother Tongue classes in 14 different OFS has a “minimum rules, minimum understand, process, and display. Learning languages, from Pre-K2 to Grade 8: Danish, punishments” philosophy. “Diversity is far to code from a young age helps develop Dutch, Finnish, French, German, Hebrew, more important than conformity these days. creativity, curiosity, persistence, critical Italian, Japanese, Korean, Mandarin At the very beginning of the school we were Chinese, Norwegian, Russian, Spanish, determined to run the school with a minimum thinking, foresight, and improved logical thinking. Also, coding can improve problem and Swedish. Mother Tongue classes of rules for the children, and this created a solving skills and train student minds to follow are integrated into the curriculum as an happy school for them,” notes Perry. Instead, programming logic alternative to learning a second language, and teachers are trained “Self-discipline (not and to think in an do not involve extra fees. to encourage analytical manner. Each of the 14 Mother Tongue teachers are students to exercise imposed discipline) Math Coding helps qualified as teachers and are native speakers self-discipline based makes the children students learn to in the language they teach. They are also on the principle that feel more mature.” work well in teams. fluent in English to communicate effectively actions will have These transferrable with other OFS educators and management. consequences and Math Coding skills are expected to endure Parents are welcome to take a lift up to students learn to take responsibility for their in the mind far longer than any particular the 11th level of the Junior block to discuss actions. “Self-discipline emerges if you don’t the Mother Tongue programme with the have imposed discipline,” says Perry, citing the programming language. “One thing that we insist on, is no labelling of a child as being appropriate teacher. In Kindergarten, students facts that there are very few fights at OFS. smart or average or challenged, etc.,” says attend Mother Tongue classes for four “Self-discipline makes the children feel more Perry. “If we get that right and treat them all 35-minute periods a week; and in Elementary mature.” equally on arrival and through their schooling, School, four one-hour periods per week. The OFS Intellectual Development most students surpass expectations.” In Singapore, a cosmopolitan city with Programme, which requires that all Junior SINGAPORE BUSINESS REVIEW | MARCH 2017 9


FIRST NUMBERS

The gambling gods may have more to contend with than just bad luck

When the chips are down, who’s ahead?

S

ingapore’s two integrated resorts will be hoping for a pickup of Chinese custom in 2017, following what can only be called a dismal 2016. Last year saw gaming revenues drop 12% from $4.8b to $4.2b, which was bad even compared to bellwether Macau, whose gaming revenues fell just 3% to $40b. Marina Bay Sands is still the winner in the gaming turnover stakes, taking in 6 of every 10 dollars and leaving 4 to Genting. But the gambling gods may have more to contend with than just bad luck as China, a large source of gamers in Singapore, continues its crackdown on money leaving the country.

Source: iProperty Agent Survey

10 SINGAPORE BUSINESS REVIEW | MARCH 2017

Use of UnionPay cards One way mainlanders are getting money out of China is by using China UnionPay cards overseas to make purchases, essentially bypassing restrictions on currency withdrawals. Nowhere has this been more evident than in Hong Kong where insurance agencies have set up in high streets to sell wealth protection products and have been known to swipe a card through dozens of times to affect a large transfer. In Singapore, Marina Bay Sands launched a programme in 2015 to enable customers to use their UnionPay cards to purchase vouchers that then could be used to buy gaming chips. MBS says it

operates the voucher programme in accordance with the terms and conditions of China UnionPay cards. In Macau, it is understood the casinos have stopped accepting UnionPay cards for the purchase of betting chips but so far, Singapore is yet to be affected. Implications of Japan’s entry But even if the local players overcome their China syndrome, a new headache is looking on the horizon as Japan opens its first casinos in 2022. The land of the rising sun would likely dwarf Singapore in the size of its gaming market, with analyst firm CLSA estimating it could eventually end up to be a $25b market given its proximity to China and attractiveness as a tourist destination. Singapore’s integrated resorts will be hoping that if their headwinds don’t ease this year, at least they can stabilise their businesses and client base.

But even if the local players overcome their China syndrome, a new headache is looking on the horizon as Japan opens its first casinos in 2022.

Singapore gross gaming revenue estimates

Sources: Company reports; Citi Research estimates


FIRST Solar energy potential map

Source: SOLAR GIS

Wider deployment of floating solar PV systems are in the works

Solar panels a bright spot for Singapore’s reservoirs

W

hen Singapore unveiled the latest experiment in renewable energy, it was a row of solar panels floating in a major reservoir. The world’s largest floating solar panel testbed located at Tengeh Reservoir will produce 1 megawatt (MW) of energy – enough to power 250 four-room basic flats for a year. The Singapore floating testbed is the largest globally in terms of power production capacity and the number of systems being tested – which, in a way, symbolises Asia’s unsinkable tenacity to try out promising

renewable energy innovations. “Floating photovoltaic systems, those installed over our water bodies, not only help to overcome land constraints, but also have the potential to reduce evaporative losses from our reservoirs,” says Masagos Zulkifli, Singapore’s Environment and Water Resources Minister. Installing solar panels over water can improve their efficiency due to the beneficial cooling effect and subsequent increase in energy yield as opposed to solar panels that become too hot. Should the pilot

Installing solar panels over water can improve their efficiency due to the beneficial cooling effect and subsequent increase in energy yield.

prove to be economically viable and environmentally sustainable, authorities have signalled their intent to explore a wider deployment of floating solar photovoltaic systems. Welcoming renewable energy firms The floating photovoltaic testbed also serves as an entry point to bring in a wealth of new renewable energy firms to Singapore. Eight companies are currently involved in the testbed, including large corporations from Japan and Italy. “We want them to establish their business hubs in Singapore after which they will then export the know-how from Singapore — from doing the innovation right in Singapore,” says Goh Chee Kiong, Economic Development Board Executive Director for Cleantech. There are also efforts on wind. Dr Carlos Wong, chairman at CBJ Ocean Platform Engineering Corp., is making the case for the introduction of a new floating platform that carries multiple wind turbines.

The Chartist: continuing decline in private residential property prices Prices of private residential properties have continued their decline, according to a report by ERA Realty Network. There is an estimated 0.4% slide in Q4, bringing the full year price decline in 2016 to 3%. “Amongst the different geographical segments, the Core Central Region outperformed the rest of the market, with prices remaining unchanged in Q4 2016 and an overall 1.3% decrease for 2016. Prices fell 2.8% and 3.1% in the city fringe and suburban areas respectively,” says the report. Further, it says Singapore is transitioning to a period of slower economic growth, with flash estimates showing a 1.8% growth. “This period of slow economic growth has been a drag on prices, as home buyers become more price sensitive.”

Price range of new properties sold

Sources: URA Realis, ERA Research

Price range of resale properties sold

Sources: URA Realis, ERA Research

SINGAPORE BUSINESS REVIEW | MARCH 2017 11


FIRST

The rise of the machines

Survey

Sought after IT skills

Y

our local neighbourhood eatery could be under threat from the rise of self-vending machines, analysts say, with the VendCafe at Sengkang the first example of machines taking the role of hawker outlets in older estates. Vendcafe takes the place of where a typical food outlet may go, offering 30 dishes from two machines – one for western and one for local dishes – as well as drinks to go. This new trend may be one that’s set to gain ground. In fact, it’s not only JR Vending’s VendCafe at 320C Anchorvale Drive in old estates but also in new hawker centres where staff members are being prime example, where many hate to use replaced by machines. the self-service lanes. Perhaps Sheng Siong Group, the third largest chain Ditching the cashier after NTUC and Cold Storage, may In Singapore’s newest hawker centre have gotten the balance right with its CiYuan in Hougang, a dynamic duo of new hybrid check-out system in which chef and cashier is no longer needed to a staff member bags and scans the items take your order. The cashier has been on behalf of the customers, and the replaced by self-payment machines customers then head to a self-service able to dispense back change in notes kiosk to pay and collect their groceries. and coins quickly. It is the first hawker It may not be as efficient as full selfcentre to have such self-payment service check-out, but sometimes it’s machines at every stall. Even Golden nice to talk to the auntie on the way out. Village cinema at Vivo dispensed with a Sheng Siong reckons its hybrid system hundred years of movie-going tradition. has not only cut waiting times by 20% Striking the right balance between but has also reduced the number of human touch and a touchscreen cashiers per shift by 20%. The check-out is always tricky, especially when aunties’ job days may be numbered, but customers have expectations of service. at least for now a bit of service is still Supermarket check-out queues are a going a long way.

Striking the right balance between human touch and a touchscreen is always tricky.

Mobile App Watch

Popety opens doors to home seekers and homeowners Leveraging on technology – Blockchain on data validation; Artificial Intelligence for price estimation – Popety has compiled trends and insights to assist home seekers in making informed decisions faster. Popety is a 360° property management portal which brings transparency and efficiency to the real estate market for all industry participants. It aims to empower the next generation of homeowners and be the source of truth for home seekers. The platform provides information down to the unit-level for all public and private residential properties in Singapore. Connecting home seekers to homeowners (C2C), sometimes through agents (B2C), Popety is the first search-through-maintain platform in Singapore where users can pull out their phone, track events, close deals, and order services with a few taps. 12 SINGAPORE BUSINESS REVIEW | MARCH 2017

Michael Chaille, Popety CEO

The app aims to address property sector issues

Nearly 6 in 10 Singaporean Chief Information Officers (CIOs) say IT and data security is the key functional area within IT and technology which will create the most jobs over the next five years. Recruitment firm Robert Half says roles that are in high demand within the security space are cyber-security consultants, IT risk managers, as well as IT risk and compliance managers. Meanwhile, a PwC study reveals that Singaporean executives are observing an increase in security incidents, with 22% reporting at least three incidents in the past year. Robert Half research confirms data abuse and data integrity as the number one business challenge cited by 59% of Singaporean CIOs. Taking IT security seriously “Cyber-attacks have the potential to cause significant financial, operational, and reputational damage, and faced with rising IT security threats, no business operating in Singapore can afford to relax their guard. It is encouraging to see CIOs anticipating job growth in the cyber-security field as this indicates business leaders are, quite rightly, taking IT security very seriously,” says Matthieu Imbert-Bouchard, Managing Director at Robert Half Singapore. Firms are not only increasingly investing in technology but are also bringing on board IT risk and security professionals. However, notes Imbert-Bouchard, companies need to recognise they are competing for a limited pool of IT professionals with the appropriate specialist skills in IT and data security making the skills shortage within IT even more apparent.”


Co-published corporate profile

Dealing with irreconcilable differences

PKWA Law Practice LLC takes on divorce cases with immense understanding.

Family lawyers at PKWA Law Practice LLC take an individualised approach to each and every case

S

ometimes marriages just don’t work out, and these lead to divorces. Dealing with divorce matters are never easy, especially when dealing with issues of betrayal, deceit, and heartbreak, says Lim Chong Boon, Head of Family Law in PKWA Law Practice LLC, a Singaporean law firm known for its expertise on family and divorce law. PKWA Law recently won a landmark case in the Singapore Court of Appeal on division of assets, and its lawyers have been consistently named as leading family lawyers by legal and business publications. “While the circumstances of each case vary widely from one to the next, the central tenant of our practice is that we do our best to help our clients through what can feel like the darkest part of their lives,” says Lim. PKWA’s goal is to alleviate the burden and stress of divorce proceedings, allowing their clients to focus on healing and moving forward with their lives. Services with a heart PKWA Law takes pride in its dedicated lawyers and support staff working in family law to take on tasks that are admittedly not easy to do. “Being a divorce lawyer in Singapore takes much more than a keen legal mind, but also one of compassion, empathy, and understanding,” explains Lim. “Not many choose to go into what is often perceived as work that is emotionally draining. It is also less financial rewarding compared to other areas of legal practice.” As such, he notes, one of the unique defining characteristics of PKWA’s family law practice is that each and every one of

their divorce lawyers is passionate about practicing divorce law in Singapore and has made the conscious choice to specialise in this area of the law. “The issue of divorce is understandably intimidating, as such we take it upon ourselves to guide our clients through the process of divorce by translating legal jargon and principles into easy-to-understand terms and concepts, ensuring that our clients understand the process and get the advice they need to make the best decisions for themselves.” PKWA Law’s initial consultations are free and require no initial deposit or formal engagement of their services beforehand. “We do this with the understanding that seeking general advice on divorce in Singapore can be a sensitive issue,” says Lim. “Not only because it deals with a very personal area of one’s private life, but also because of the unique complexities of each and every person’s personal life, which affect how the divorce proceedings in the Singapore Courts develop.”

when it comes to dealing with divorce matters,” notes Lim. Given the highly personal nature of divorce matters, PKWA’s divorce lawyers are also sensitive to changes in circumstance and adopt a dynamic approach to problem solving throughout the divorce process. Such an approach demands not only legal acumen and technical excellence, but also creativity and flexibility to push the envelope. “Unlike most other practices in Singapore, we have not only one but an entire department of divorce lawyers specialising in this very delicate and personal area of the law,” Lim says. This means clients get the current and relevant advice when they seek PKWA’s counsel on divorce in Singapore. PKWA notes that the firm is always looking for innovative and creative ways to meet their clients’ objectives and needs. “We keep in sight the bigger picture, that is your loved ones and how the divorce will have an impact on them,” Lim stresses. The firm offers clients a one-time complimentary counselling session from an experienced external counsellor, to help them look towards the future and moving forward.

Lim Chong Boon, Head of Family Law in PKWA Law Practice LLC

Tailored approaches As divorce lawyers in Singapore, the firm is also in tune with uniquely Singaporean issues. With that understanding, PKWA crafts their approach to meet the real needs of their clients with practical and effective solutions. “No two divorces are ever the same, and we take an individualised approach to each and every case. Our staff and lawyers are also often praised for the personal touch they employ

CONTACT Company Name: PKWA LAW PRACTICE LLC Contact: 68545336 / 63976100 Address: 480 Lorong 6 Toa Payoh #16-01 HDB Hub East Wing Singapore 310480 PKWA Family Law Website: http://www.sgdivorcelawyer.sg PKWA LAW Main Website: http://www.pkwalaw.com/our-fees.html

“Being a divorce lawyer takes much more than a keen legal mind, but also one of compassion and empathy.” SINGAPORE BUSINESS REVIEW | MARCH 2017 13


FIRST

Correlations you need to know

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ome read tea leaves, others consult fortune tellers, and more still rely on analysts’ predictions. Whatever your method is, trying to predict which direction the stock market will move is a time honoured tradition. It’s helpful that the charting wizards at Citi Research have crunched loads of charts and have come up with the ones that seem to most correlate with the movements in the stock market. So which charts should you be looking at? Electronics industrial production First off, even though you may think Singapore has become a financial services centre, surprisingly electronics manufacturing output still correlates pretty well with the STI. Manufacturing remains Electronic industrial production vs STI

Sources: CEIC, Bloomberg, Citi Research

the largest contributor to Singapore GDP – 21% of 3Q16 GDP and 2015 GDP – and although this has shrunk versus levels from a few years ago, electronics industrial production has tracked stock-market cycles well in the past, notes Citi. “This has shown a meaningful uptick since January 2016, registering trends similar to bottoms of 2001, 2009, and 2011.” Port container throughput Still staying on a trade theme, the other figures to watch are the numbers of containers passing through Singapore’s ports, which also seem to be a pretty good barometer of which way the market is heading, although there has been a slight deviation. As Citi notes, port container throughput and sea-cargo statistics have also Container throughput handled yoy % growth vs STI

Sources: CEIC, Bloomberg, Citi Research

OFFICE WATCH

The Working Capitol expands with new site

The Working Capitol on Robinson is the second co-working and lifestyle space for The Working Capitol, whose flagship location is at Keong Saik Road. Benjamie Gattie, CEO and co-founder of The Working Capitol, says the new location is a response to local and regional demand for a greater diversity of working options, including a wider array of inspiring, collaborative spaces and increased exposure to cross-industry networks. It occupies approximately 55,000 sq ft across 11 floors at 140 Robinson Road. Some levels will be fully dedicated to a single organisation whilst other floors contain a mix of private workspaces for smaller companies, permanent desks in an open-plan environment, and hotdesking options for individuals and teams. The Working Capitol on Robinson also has a 20-metre outdoor lap pool, a gym space, a sky garden, a bar, and a member’s lounge. 14 SINGAPORE BUSINESS REVIEW | MARCH 2017

The project was developed by design firm Hassell Studio

been useful for tracking stock-market cycles in the past. Like many other trade indicators, this has deviated from historical trends in recent years. The Trump factor But perhaps the correlation you should be paying the most attention to this year lies with President Donald Trump and his effect on the US Federal Reserve as they mull how much and how often to increase interest rates. Because, as this chart shows, wherever the US dollar interest rate goes, the Singapore dollar interest rate follows. Some readers may be too young to remember what life was like back when Singapore interest rates were above 7%, but if anything could upset the stock market and home prices, it would be interest rates that rise faster than expected. And for that, look to America, not domestically. SIBOR vs Fed fund rate

Sources: CEIC, Bloomberg, Citi Research


Co-published corporate profile

A glance at Panasonic Factory Solutions Asia Pacific’s indoor urban farming revolution

The company’s vision is to offer advanced systems and solutions in the urban farming industry to promote sustainable healthy lifestyle globally.

The indoor farm cultivates more than 30 types of crops

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anasonic Factory Solutions Asia Pacific (PFSAP) has been known as one of the global leaders in the design, manufacture, assembly, and export of high-accuracy auto-insertion and surface mount technology machineries widely used in various product applications namely consumer electronics, automotive, and industrial. Most people may not easily associate the brand “Panasonic” with agriculture business, but that is precisely the business that it recently ventured into. Inspired to answer the ever-increasing need for food security and demand for high-quality food supply, PFSAP fused Panasonic’s technology and factory automation expertise into agriculture, creating a new motion in 2013. The vision is to offer advanced systems and solutions in the urban farming industry to promote sustainable healthy lifestyle globally. PFSAP is the first and currently the only company in Singapore which has attained both Farm License and Salad Processing License within a single site. Its signature product is the “Veggie Life” salad series, available in most of the major supermarkets in Singapore. Since 1920, still holds true till today is the inherent business philosophy by founder Mr Konosuke Matsushita, always devoted to the development of society. Food sustainability and security is one of PFSAP’s primary concerns, with growing population and shrinking arable

lands as commonly spotted in developed cities. One of those cities is our very own Singapore. The Agri-Veterinary Authority of Singapore (AVA) says the city-state imports approximately over 90% of the food it consumes. Currently, local farms provide less than 10% of vegetables and AVA aims to raise Singapore’s local self-sufficiency level for vegetables. This is one of the considerations of setting up an indoor urban farm in Singapore. 1st licensed indoor farm in Singapore With strong support from various Singapore government institutions and Panasonic’s Japan headquarters, PFSAP’s indoor farm was set up in Singapore, with only less than five members in charge of Research & Development, Sales, and Operations. Persistent learning to acquire agriculture know-how and overcome any shortcomings yielded its fruits. Within three months, PFSAP attained Farm License and Salad Processing License from AVA in October 2013, with capabilities of cultivating more than 10 types of crops. Within two years, the indoor farm has expanded from a scale of approximately 280sqm to a scale of approximately 1,100sqm, cultivated more than 30 types of crops, and innovated intensively on the automation system to increase productivity.

Birth of “Veggie Life” “Veggie Life” stemmed out from PFSAP’s desire to provide a distinguished experience to a wider mass. Especially with the benefit of locally-sourced vegetables that enables PFSAP to harvest, package, and deliver on the same day, it is confident to incorporate fresh ingredients to “farm-to-table” experience through “Veggie Life” salad mixes. Moreover, both government authorities and educational institutions are exceptionally supportive. For instance, collaborating with Singapore’s Food Innovation & Resource Centre, PFSAP ensures that “Veggie Life” salad combinations provide optimal nutritional benefits to support a healthy lifestyle and complement in taste too. “Veggie Life” currently offers a range of nutrient-dense salad mixes for consumers on-the-go: ‘Antioxidant Mix’, ‘Nourish Mix’, and ‘Vibrant Mix’, which can be found in major FairPrice supermarkets, Emporium Shokuhin, Isetan Scotts supermarket, Isetan Westgate supermarket, MEIDI-YA, Big Box Hypermart, Giant, and other major retailers. It features locally-harvested, premium quality vegetables that are cultivated in the indoor farm’s controlled soil-based, pesticide-free environment with optimum cultivation conditions to ensure stable, nutritious, high-quality output, complying with AVA and HACCP’s stringent food safety standards. PFSAP also offers individual packaged vegetables such as mizuna, mini red radish, kale, and other crop types. It supplies to hotels, restaurants, and catering companies namely Resorts World Sentosa, Les Amis Restaurant, and Ootoya Japanese Restaurant. As one of the leading Smart Factory Solutions’ providers, Panasonic Factory Solutions Asia Pacific is committed to foster indoor urban farming systems and solutions to meet the needs for stable and sustainable production of locally-harvested premium quality crops.

“Food sustainability is one of the primary concerns.” SINGAPORE BUSINESS REVIEW | MARCH 2017 15


INTERVIEW

Companies need good stewardship in addition to good corporate governance Singapore Business Review editor Tim Charlton sat down with Stewardship Asia Centre’s CEO Mr Ong Boon Hwee to understand what it means to go beyond leadership for a firm’s sustainability. We need to look at the values that drive companies and how to ensure that the shareholders have the correct understanding of the long term view.

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ood corporate governance may be the buzzword around boardrooms and investor conferences since the global financial crisis, but in the absence of other ownership controls it doesn’t necessarily make for good leadership of a company in its own right, according to Stewardship Asia Centre’s CEO Mr Ong Boon Hwee. The Stewardship Asia Centre is a thought leadership centre designed to promote long-term stewardship and effective governance amongst businesses in Asia. “A company may have done everything right from a corporate governance view, but have they done the right thing for the company,” Mr Ong asked, citing instances where all the corporate governance boxes seem to have been ticked yet firms still ended up making poor decisions that eroded or even destroyed shareholder value. One problem facing many companies as they grow beyond the initial shareholders, who in Asia are often families, is that ownership can become diluted to the point where there is no significant shareholder who can ensure the board and management runs it for the long term. “One of the strengths of Asian family businesses has typically been a focus on the long-term view, not quarterly profits,” said Mr Ong. “It can become a case of moral suasion versus monetary suasion.” Whilst most investors understand that it is the shareholders who appoint the board who then appoint and monitor management, the rise of passive fund management and now ETFs means investors are choosing entire 16 SINGAPORE BUSINESS REVIEW | MARCH 2017

markets to invest in rather than individual companies, a trend that has gained momentum post-crisis. In the case of a passively managed fund, the portfolio manager may not have as much keen interest in the running of any one company especially if the mandate is to simply match the index. Low-cost funds even do away with active fund managers, and instead rely on algorithms to balance the portfolio. But when the computers are doing the investing, the question becomes who is engaging with the board on behalf of shareholders to ensure the company is being run, or “stewarded”, with the longterm interests of shareholders in mind. It is this lack of connection between shareholders and management, which gets extended even further when many fund managers outsource management decisions to proxy companies, that is a key concern for Mr Ong. “Some funds don’t even deal with the companies, they just give decisions to the proxy companies, so you get a fragmentation of ownership and many layers between the shareholders and the board,” Mr Ong said. “Perhaps institutional investors would want a 10% shareholder to take a stake with a board seat but not control so that they can better affect stewardship over the company,” he added. Articulating principles of stewardship The industry-led Singapore Stewardship Principles (SSP) for Responsible Investors initiative was introduced in November 2016, supported by the MAS and the SGX, with the aim of articulating principles of stewardship which can supplement more traditional concepts around corporate governance. One thing Stewardship Asia Centre would like to see more of is the concept of giving a board a mandate from shareholders rather than relying on them to pick the best strategies on their own. The mandate concept would establish what the board’s ambitions and risk appetites are, and what its purpose is, so that they can better represent the interests of the shareholders. There is still much work and research to be done in what defines good corporate stewardship, as opposed to good corporate governance, but it is an area that the Stewardship Asia Centre is continuing to work on to ensure that businesses are running for the longterm benefit of the shareholders. Ultimately good stewardship comes down to values. “We need to look at the values that drive companies and how to ensure that the shareholders have the correct understanding of the long-term view to benefit and sustain not just the current generation but also future ones.”


economy watch

N E IM C E SP Higher SG$ interest rates will incentivise a more efficient use of capital

When the debt party ends

2016 was one of the toughest for Singapore with real GDP expected to come in at 1.4%, or the lowest since the Global Financial Crisis in 2008.

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ill Singapore’s debt binge over the last five years lead to a hangover once rates begin to rise? That is the question being asked by economists as the interest rate cycle begins to swing up. It may come as a surprise to some that Singapore holds the largest amount of non-financial private debt in the world amongst advanced economies – ahead of Japan, the US, and even China. And a large part of this has been run up over the last five years, whereas the US, Japan, and the UK have seen prudent private borrowers cut their debt loads. Since 2011, Singapore has added an equivalent of almost 40% of GDP – over $150b – in debt. It is unparalleled, but is it also dangerous? The first thing to look at is the forecasts for interest rates.

World trade volumes are highly correlated with GDP growth, 75% to be exact. So any pickup in world trade flows through to Singapore’s GDP.

Currently, Singapore SIBOR – the benchmark interest rate – is sitting below 1%, making all that borrowing very inexpensive. But that is about to change. As CLSA’s Chuanyao Lu notes, the Fed’s 25bp hike in Dec ‘16 is a harbinger of more to come with expected US rate increases flowing onto Singapore, bringing the 3-month SIBOR to 1.7% by end-2017. But the interest rate for corporate borrowers would likely be higher still. “The 10-year SG government bond spread over the 3-month SIBOR has now moved slightly above its long-term average spread of 135bps as the market starts to price in the risk of further rate hikes. Assuming the spread at the long-term average as the SIBOR climbs to 1.7%, it would imply a 10-year SG bond yield of ~3.0% by

World trade volume growth vs Singapore’s real GDP growth

Asia has seen the biggest build-up in private sector debt in the last five years

Sources: CLSA, CEIC

Sources: Haver, BIS, CEIC, and UBS calculations

18 SINGAPORE BUSINESS REVIEW | MARCH 2017

end-2017,” adds Lu. Indebted companies will be stretched further to repay loans, and as we have seen in the oil & gas industry with Swiber and Ezra, there has been a fair amount of bad loans made. UBS economist Edward Teather notes that the most obvious areas of capital misallocation are in the offshore oil & gas supply sectors and the property market, evidenced by falling prices and rentals. “The decline in the profit share of GDP and slackening of the labour market suggests the scale of economic adjustment needed probably goes beyond those sectors. We expect this adjustment to become more obvious in 2017, not least because higher SG$ interest rates will incentivise a more efficient use of capital. That adjustment process should keep growth weak and push unemployment higher but, absent a significant external shock, not tip the economy into recession for full year 2017,” says Teather. Trade conundrum The other big unknown for Singapore is trade. 2016 was one of the toughest for Singapore with real GDP expected to come in at 1.4%, or the lowest since the Global Financial Crisis in 2008, and the third consecutive year of falling GDP growth for the country. This impacted not just Singapore’s export-oriented manufacturing and services industries, but domestic demand as well as the decline in overall sentiment weighed on the propensity to spend. In fact world trade volumes are highly correlated with GDP growth, 75% to be exact. So any pickup in world trade flows through to Singapore’s GDP. CLSA has a positive view on world trade, Trump protectionism notwithstanding, and forecasts GDP growth of 2.5% in 17CL. “We do note that we are much more positive compared to the current consensus forecast of 1.5% for 2017, and this is primarily driven by our view of global trade recovery. We expect trade recovery to further pick up into 2018, and hence drive GDP growth to 3.5% in 18CL.” UBS is less sanguine, arguing Singapore’s growth momentum is likely to remain weak.


Co-published corporate profile

Built on quality and superior taste, 4FINGERS started fom a single store in ION Orchard in 2009

Bold, driven, delicious

4FINGERS Crispy Chicken is edgy, energetic, ambitious – and bent on growing further.

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rom a small operation just a few years ago to over ten stores now, 4FINGERS Crispy Chicken is fired up and ready to grow further, fuelled by a solid business model, quality offerings, and an edgy personified brand. After having only one store presence for five years, 4FINGERS took the first step in branching out when CEO Steen Puggaard took over, and with the investment from Chairman Vijay Sethu and a newly-hired management team from 2015. “We had the brains, muscles, and funding to propel the business. Also, the business model is very robust with great ROI opportunities, and it helped with our expansion action locally and overseas,” says Puggaard. Puggaard has been the CEO of 4FINGERS, and has been significant in growing the business from just one to 11 outlets in Singapore within a short span of 2.5 years, and also launched the brand in key markets like Malaysia. The brand is branching further internationally with their first Australian store launch in early 2017 – no small feat for a brand that only had one store presence from 2009 to 2014. Major change Puggaard oversees the overall business strategy including managing shareholders, funding teambuilding, expansion, structure and organisation. He is responsible for driving growth of the brand locally and internationally and also ensures the company is ready for rapid expansion as well as profitability in carefully selected markets. He single-handedly and successfully managed the transfer of ownership of the brand to its current main investor, Sethu.

In 2014, 4FINGERS saw a change in ownership to Sethu, an investment banker by profession, who is also the business’s current Chairman. It has been noted that the injection of fresh funds as well as the establishment of a proficient management team, combined with a highly scalable business model became the key factors catalysing the brand’s expansion, which saw an astounding 15-fold increase in revenue, from $2m in 2014, to over $30m by the end of the 2015 financial year. A new store was launched nearly every other month over the past two years. 4FINGERS currently operates 11 stores in Singapore, one in Malaysia, and two in Indonesia. More openings in Malaysia as well as Australia are in the pipeline for 2017. “The main challenge would be securing great locations for new stores,” notes Puggaard. He says 4FINGERS plans on opening another four stores in Singapore, at least three stores in Australia, and two stores in Malaysia. In Australia, the first is scheduled to launch as early as April 2017, along Melbourne’s Bourke Street, the entertainment hub for the city’s CBD. Two more restaurants in Brisbane are planned before the third quarter. “As we go about our business planning, we often look to Australia as a model. The food industry there is very mature.” Passionate and determined 4FINGERS, an original Singapore brand founded in 2009, describes itself as a joint “with superior food offerings topped off with an edgy persona.” The brand also notes that

4FINGERS CEO Steen Puggaard

it mimics the energy and attitude of trendsavvy individuals who are in tune with what’s hot and happening. For instance, 4FINGERS has been on the lookout to support talents and projects that are aligned with their values and aspirations. In the months leading up to the 2016 Rio Olympics, they sponsored rower Saiyidah Aisyah in her training and committed part of their sales proceeds towards her nutrition fund. 4FINGERS is continuing their support as Aisyah prepares for the Asian Games 2017. In December 2016, guests witnessed urban artist Samantha Lo put on the finishing touches to a 5x2m mural. A permanent feature at the restaurant, the artwork was specially commissioned in conjunction with 4FINGERS’ seventh anniversary and grand opening of the Marina Square outlet. Even as the brand continues to expand and evolve, 4FINGERS still has its priorities straight. “Consumers are getting more aware about their food and many are disenfranchised with mass-produced, processed food that the big boy brands continue to dish out,” says Puggaard. “These people demand transparency and quality and that’s what we are unabashed about. We started and built 4FINGERS on quality and superior taste, and brand experience. As long as we are still in business we intend to stand by this.”

“These people demand transparency and quality and that’s what we are unabashed about.” SINGAPORE BUSINESS REVIEW | MARCH 2017 19


INDUSTRY INSIGHT: ONLINE RETAIL our view, the lack of pre-existing retail infrastructure in many Asian geographies will make this convergence process faster than it was in Europe or the US,” Costa explains.

ZALORA found the need to adopt a physical store presence

How prepared are e-tailers for Amazon’s entry?

With more than 70% of consumers in Singapore shopping online at least once a month, e-commerce players are battling it out to win customers.

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mazon, the world’s biggest online retailer, will soon enter Singapore’s e-commerce scene. But with a number of established players already successful in their niche, how are each of them adapting and upping their game? It was five years ago when one of Singapore’s first fashion retailers, ZALORA, hung out its shingle with just 20 people crammed into a small office space and a dream to sell clothes online. Since then, the Kinnevik backed-company has raised over US$365m and now has 350 employees in Singapore and over 1,500 staff spread across its regional offices in Southeast Asia. Going beyond online ZALORA chief marketing officer Tito Costa tells Singapore Business Review that a typical ZALORA user spends 50 minutes a month on the app, which has been downloaded over 10 million times so far. “Strategically, ZALORA is preparing

20 SINGAPORE BUSINESS REVIEW | MARCH 2017

The journey is much more multidimensional now, so retailers have to be prepared to be present at every touchpoint.

for a ‘mobile-only’ market,” Costa says, noting how consumers are now expecting retailers to know what their preferences are. “By putting customer and behavioural data to work, we are able to recognise individual shoppers when they land on ZALORA, and deliver tailor-made experiences and recommendations in real time, providing them a more meaningful and relevant online shopping experience,” he adds. But whilst more than half of ZALORA’s orders come from mobile, the company found it needed to adopt a physical store presence in new cities to drive marketing. “A second trend that we see is that the experimentation of traditional retailers with online shopping and vice-versa online players are testing pop-up stores and digital showroom concepts, may lead to a convergence towards a new omnichannel digital-first retail, putting together the best of the two worlds for an optimal customer experience. In

Mastering retail omnipresence In 2014, ZALORA launched its flagship store at ION Orchard. Costa notes that one of the benefits of such a set-up is that many consumers are able to try on pieces they saw online. “We saw that a majority of sales at our pop-up stores, up to 60%, were new ZALORA customers,” he states. Costa notes one of the qualms from online customers is that they are unable to physically test out the products before they place their orders, resulting in a different product expectation as well as high return rates. Online retailing is also a game of scale with ZALORA selling off its underperforming units in Thailand and Vietnam. And certainly, even five years into its growth, it’s still a business that requires deep pockets and investment, with ZALORA’s revenue reportedly rising 78% to US$234m in 2015 but its net loss increasing 36% to $105m. Prashant Dadlani, founder of retail marketing consultancy blu, agrees that consumers go through a different journey now compared to when the early hype was seen in the e-commerce landscape. And although more than 70% of consumers shop online at least once a month, according to Visa’s Consumer Payment Attitudes Survey, it is wrong to say that e-commerce is slowly dominating retail. He points out that pitting e-tailers against traditional brick-and-mortar stores perpetuates the wrong notion and ignores the reality that there exists seamlessness across retail channels. “The journey is much more multidimensional now, so retailers have to be prepared to be present at every touchpoint,” he says. And as the market gets a lot more crowded with Amazon’s reported plans of setting up its base in Singapore, the challenge is for local e-commerce players to up their game. George Pepes, vertical solutions and marketing lead retail at Zebra Technologies, says retailers who want


INDUSTRY INSIGHT: ONLINE RETAIL to succeed in this era must master the concept of omnipresence. He cites Amazon.com, which despite starting out as a digital store has now ventured to offer real-world experience. “Besides the opening of physical stores to sell its books, Amazon also has plans to open grocery stores that provide a range of services within the confines of brick-andmortar. Singapore has recently also experienced a spate of flagship store openings – from the likes of American lingerie brand Victoria’s Secret to Japanese casual wear brand Uniqlo,” he says. “This is why today’s consumers are gravitating to stores using the latest technology and offering conveniences ranging from buying online, pickup in-store options to mobile checkout.” Online-grocer RedMart utilises the strategy quite differently from ZALORA. RedMart head of marketing Jaime Ng explains how they use traditional marketing to attract more buyers. “Apart from doing everything that is digital, we also believe there is a need to connect with offline shoppers. So we do a lot of flyering where we actually distribute flyers to the neighbourhood and we’ve seen a good traction around that,” Ng notes. The retailing market is also starting to consolidate ahead of Amazon’s move into Singapore. In November 2016 Lazada was reportedly in talks to acquire RedMart for about $30m to $40m, after the latter ran into financing problems. In a statement, RedMart says the transaction is set

to help it expand into new product categories faster whilst it continues to be independent of Lazada. Lazada itself was acquired by Alibaba, which is of a scale large enough to fend off Amazon. Leveraging on big data tech But for all e-tailers, SAP Hybris head of business Haran Pranatharthi says there is no stopping the e-commerce boom in Singapore. Citing a report by Temasek and Google, he mentions that the e-commerce market in the region is expected to be worth US$5.4b by 2025, with online transactions making up 6.7% of all retail sales. This figure compares with just US$1b in sales and a 2.1% market share in 2015. The online retail space is projected to have a 10-year compound annual growth rate of 18%. “That is a staggering 6.5x increase over 10 years. It isn’t hard to see why though; barriers to entry are relatively low. Online marketplaces such as eBay and Amazon allow anyone to set up a simple online shop and sell products within minutes. At the same time, an online store allows retailers to expand their customer pool, potentially reaching customers miles – or even continents – away,” he says. The true gem in this, he points out, comes from the sheer amount of data retailers can potentially collect. Online stores can now take note of their customers’ buying habits. For loyalty marketing company ICLP Singapore, country manager

Merging the best of digital and brick-and-mortar

Jaime Ng

Bruno Tay

Haran Pranatharthi

Prashant Dadlani

The e-commerce market in the region is expected to be worth US$5.4b by 2025

Tito Costa

Bruno Tay reckons this could turn out as a great tool, considering that retailers can now leverage on big data strategically to gain insights that allow brands to serve their customers better. “Indeed, as we move into 2017, there will likely be much closer interaction between traditional retail initiatives like discounts and promotions with technological innovations. This convergence is the next frontier in the retail market,” he says. RedMart’s Ng reveals that big data helps RedMart improve its logistics supply chain. More than allowing them to study consumer buying patterns, the big data technology also helped them to predict when products will be sold out to how many days before they run out of a particular item. “This reduces wastage of time and orders, and it actually controls the efficiency of operations. We are able to cater to more of their needs, opening up new range which therefore we are able to understand each consumer pattern,” she adds. Tay also suggests that retailers can shape up their offerings as they cultivate loyalty within its customer base. He notes how rewards are crucial in this regard, as 75% of consumers are likely to buy more if they are rewarded. “This means that increasingly, the experience of accruing points for runof-the-mill rewards is no longer good enough. There will be an expectation for retailers and brands to explore more creative forms of rewards that truly take into account their customers’ interests and needs,” he concludes. By Kiersnerr Gerwin Tacadena SINGAPORE BUSINESS REVIEW | MARCH 2017 21


INTERVIEW

How to sell on Amazon in Singapore

With the reports running hot that the world’s largest online retailer is planning to open in Singapore in 2017, we sat down with Amazon expert, Adam Hudson, to find out how local entrepreneurs can profit. you can track the daily sales of almost any item on Amazon before you decide that it’s a market that you’d like to enter. This greatly reduces your risk and is a really eye-opening exercise. You’ll be amazed at how much some people are making selling the most random things.

What are the top 3 reasons that you believe selling on Amazon is an exciting business for local entrepreneurs in Singapore? The first reason that I love Amazon for Singaporean entrepreneurs is that it’s a great way for them to launch a brand into a marketplace they understand to test and measure their ideas affordably. Once they have established their business selling to Singaporean consumers, they can easily expand by exporting their products to other markets where Amazon has their website and warehouses, like the US and Europe. These markets can all be accessed very easily through the Amazon network. Second, Singapore is uniquely positioned in regard to China. Going to large trade events like the Canton Fair, or visiting supplier’s factories anywhere in China is very easy for Singaporeans, relative to most western countries. Third, I think Singaporeans have an unusually high work ethic and are well educated about the importance of details in their professional pursuits. When you’re creating online brands and exporting to international markets, these things matter. So what kinds of products do well on Amazon? How do you know if what you want to sell will do well? Obviously, having bulky or heavy items like water, toilet paper, or laundry detergent shipped right to your door makes a lot of sense, but people order a lot more than just those consumables on Amazon these days. I personally sell in the homewares category and I like to sell things where design matters. The good news is that with software like ZonGuru, 22 SINGAPORE BUSINESS REVIEW | MARCH 2017

You said that you like to sell items where design matters. Why is that important? As I mentioned before, those mega-categories like water, toilet paper, and laundry detergent are usually dominated by famous brands where people don’t care that much about the design. So long as the price is right, they’re going to go with a brand they know. If you compare that with buying a coffee press, if I find something on Amazon by a company that I’ve never heard of but it is designed and branded in a really cool way, I’m probably going to buy that coffee press because I really like the look of it. This design and branding element is where the small entrepreneur has an opportunity. What is the most important thing to get right if you decide to start selling products on Amazon? In many ways, Amazon is much like a dating site. People type in what they’re looking for and then Amazon shows them a bunch of different options. Just like a dating site, the first thing that customers do is look at the photos. So there’s two things to get right here. First, try to have a product that is designed in such a way that it stands out from the rest. In the dating scenario, a guy with a kitten on his head is going to stand out. So getting the customers’ attention is the first battle. Second, you want to make sure that the photos are exceptionally high quality, because that’s as close as they’re going to get before they make the order.

On Amazon, because of their review system, quality is everything. If you ship low-quality products, you’ll soon have bad reviews from your customers and then you may as well not be there.

Where do you source products from and do you have any tips for dealing with suppliers? I source all of my products from China. I found my first suppliers on alibaba.com, but today I visit the Canton Fair twice a year as well. My biggest tip for sourcing products is that you should rarely choose the cheapest supplier. On Amazon, because of their review system, quality is everything. If you ship low-quality products, you’ll soon have bad reviews from your customers and then you may as well not be there. Where can people connect with you? The best place is via my website, www.reliable. education. I give away a free course there that teaches people how to start a successful business on Amazon.


Co-published corporate profile

ARA Asset Management Limited takes real estate fund management to new heights

Its strong track record and uncompromising fiduciary commitment speak volumes.

John Lim, Group CEO, ARA Asset Management Limited

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RA Asset Management Limited (ARA) has been around for less than 15 years, but few in Asia’s real estate industry would be unfamiliar with the company which has built its name on real estate fund management. It listed Asia’s first cross-border REIT, Fortune REIT, in 2003, launched one of Singapore’s most prominent REITs, Suntec REIT, in 2004, and was the first real estate fund manager to be listed on the Singapore Exchange in 2007. Just last year, it made headlines when it raised approximately US$1.8b to acquire Century Link, a newly-completed premium-grade integrated commercial property located in the Lujiazui Finance and Trade Zone in Pudong New District, Shanghai, China. The deal was the largest single-asset non-residential real estate deal in the world since 2001 and largest singleasset deal in the world since 2004. Investors’ interests first With its thrust on strong leadership and always placing investors’ interests first, ARA is driven to be the best-in-class investment manager, offering bespoke solutions and enduring value to its investors and partners. Over the years, ARA has distinguished itself with its strong track record, extensive business network, local operational expertise, and uncompromising fiduciary commitment. Its long-standing partners are testament

to its capabilities – they include Cheung Kong Property, one of Asia’s leading multinational conglomerates; The Straits Trading Company, one of Singapore’s oldest public listed companies; and renown institutional investors such as top US pension funds like Teachers Retirement System of Texas, NYS Common Retirement Fund, and California Public Employees’ Retirement System; China’s CITIC Bank; and Korea’s National Pension Service. ARA has built a diverse suite of real estate investment trusts (“REITs”) and private real estate funds that are invested in the office, retail, logistics/industrial, hospitality, and residential sectors in the Asia Pacific region. Complemented by its in-house real estate management services and advisory services, ARA creates value in every stage of the asset life cycle. As at 31 December 2016, the fast growing company manages close to 100 properties in Asia Pacific measuring over 55 million square feet with total assets under management of approximately S$36b. With more than 1,200 employees across 18 cities, the company is a strong force to be reckoned with. Pushing for sustainable growth ARA also drives sustainable growth through its tried-and-tested integrated business model involving REITs, Private Funds, and Country Desks. For REITs,

ARA has a strong multi-product, multijurisdiction REIT platform. It has a track record of establishing, listing, and managing listed REITs with close to 12% market share of the Singapore and Hong Kong REIT markets. ARA also has an expanding suite of private real estate funds which pursues value creation through proactive asset management initiatives instead of merely relying on bullish real estate cycles to turn in profits. Since listing, ARA continues to outperform the broader market index with total return of approximately 124%. As a testimony to the success and strong financial performance of the company, ARA’s AUM growth achieved a compound annual growth rate of about 37% and it has delivered an average return on equity for shareholders in excess of 30% per annum over the last 10 years. In terms of corporate social responsibility, ARA operates on a sustainability philosophy. The company has been active in giving back to the society through multiple initiatives. “Our longstanding commitment includes driving our business for sustainable growth and success, supporting philanthropy through volunteerism and charity, taking care of our people, as well as respecting and preserving our environment,” says Mr John Lim, Group Chief Executive Officer of ARA Asset Management Limited.

“Our long-standing commitment includes driving our business for sustainable growth and success.”

In 2016, ARA Asset Management Limited invested in Century Link in Shanghai

SINGAPORE BUSINESS REVIEW | MARCH 2017 23


FINANCIAL INSIGHT: INVESTMENT BANKING

2017 is expected to be a year of consolidation

Will 2017 see the “great adjustment”?

After entering a bleak forest of slow growth and restructuring in 2016, investment banks can look forward to a relatively brighter 2017 amidst a fintech-influenced, compliance-heavy environment.

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f investment banks in Singapore had a hard time coping with the flurry of challenges and changes in 2016, then 2017 will provide a much-needed breather, especially for banks that have started shaping up their operations. Analysts forecast a thrilling year ahead marked by an improving outlook as well as opportunities to collaborate with financial technology firms. Consolidation, innovation, and compliance will be the key themes in the coming months – and banks that fail to keep up will remain lost in the woods. “The winners in this environment will be investment banks that restructure successfully and develop a sharp focus on the things they do best and embrace innovation,” says Liew Nam Soon, ASEAN managing partner, financial services at Ernst & Young Solutions LLP. Liew reckons that investment banks in Singapore face a slew of hurdles that are driving down return on equity (ROE). Not only is economic growth slowing, but revenue for fixed income, commodities, and currencies is on the decline. Banks must also contend with new tax and compliance regulations that impose tougher penalties. As a result, ROE amongst investment banks has declined in the past years, forcing some to restructure their businesses. Liew says EY has been working with investment banks to restructure operations and implement new models to optimise business, taking into consideration legal entity structures and transfer pricing. 24 SINGAPORE BUSINESS REVIEW | MARCH 2017

2016 was somewhat of an ‘annus horribilis’ for the equity teams of investment banks in Singapore.

“We have seen a lot of downsizing in the past couple of years for investment banking and I think that has resonated across many financial institutions,” says Ow Kim Kit, deputy head of banking and finance practice, RHTLaw Taylor Wessing LLP. “The result is that many senior level people have been displaced, most of them very experienced, having seen through several market cycles.” She reckons the wave of restructuring was a survival necessity, preparing banks and other financial institutions for the opportunities that will be coming this year. Assimilating into new circumstances “I saw the second half of 2016 as a time when investment banking players regrouped and built the backdrop for what may be a very exciting 2017,” says Ow. “The markets will assimilate into the new set of circumstances and a positive outlook should soon emerge within the first quarter, barring any severe and unexpected situations.” Ow believes we are not likely to see that many mega deals but thinks we should expect to at least see some reasonably steady deal flow till at least early 2018. She warns though that some banks may have gone too far in their restructuring. Those that implemented severe layoffs may have let go of experienced executives and dissolved business units that will be critical to forthcoming deals. “If the investment banking sector picks up in 2017, it may be that some of these financial institutions would face


FINANCIAL INSIGHT: INVESTMENT BANKING the challenge of having young teams front complex deals or may lose out totally because they are no longer able to do such deals,” says Ow. “2017 may be the year of the ‘Great Adjustment’,” says Marcus Chow, partner at Bird & Bird ATMD LLP, explaining that banks face a lot of uncertainty this year that will put their new models to the test. He reckons the Trumpian governance approach may convince international banks to reduce their outsourcing of banking support jobs in Asia. US President Donald Trump has repeatedly warned US companies that they would face higher taxes and other penalties for outsourcing jobs abroad. “Also, your guess is as good as mine how ‘draining the swamp’ will impact Wall Street and its repercussions in Asia,” says Chow. “However, if the election promise to pull back on regulations is carried through in the US, this may cause a ripple across parallel regulations elsewhere in Asia and may lead to a late Autumn bloom.” Fintech’s promise On top of a slow-growth environment, investment banks in Singapore currently face multiple market and regulatory constraints. Customer trust has also weakened in the wake of certain interest rates and foreign exchange scandals, as well as the rising threat of cybercrime. In response, banks are beginning to leverage technology, analytics, partnerships, and industry utilities to shore up security, improve service and reduce the cost to serve. Smarter banks have even formed alliances with their upstart rivals, the financial technology (fintech) firms. “The disruption from fintech firms, which initially focussed on retail, wealth, and payments and is now extending to investment banking,” says Liew. “These fintechs are using technology innovation to capture market share from incumbent investment banks.” Liew reckons that despite the cutthroat competition between banks and fintech firms, there are opportunities for collaboration, including in cloud technology, robotic process automation, analytics, digital transformation, blockchain, artificial intelligence, and the Internet of Things. “The challenge of disruptive technology and digitisation of money flows and fund raising, which is not going to go away, will also force investment banks to rethink roles and value proposition,” adds Chow, and partnerships with fintech firms may help facilitate such transformations. “Singapore’s financial technology sector is poised for

There are collaboration opportunities for investment banks and fintech firms

growth, facilitated by its highly mature ICT market and supportive regulatory landscape. The country has one of the world’s most technologically advanced telecommunications markets, with 3G/4G subscribers reaching 8.4m and broadband internet subscribers at 4.3m in 2016,” says BMI Research in a report. “We expect the development of sandbox regulations to further advance the spread of fintech within the city-state, whilst its status as a regional banking hub will increase its attractiveness to fintech startups that are looking to enter the region.” According to KPMG, around 200 fintech firms operating in Singapore were opened in the past two years – the fastest growth rate in Asia. Add to this Singapore’s financial inclusion rate – the highest in Asia in 2014 at 96.4%, according to World Bank data. “In our view, the government’s active participation in the development of a fintech-friendly regulatory environment is key to fintech development. As part of its efforts to develop Singapore into a smart financial centre where innovation and technology are used to enhance value and increase efficiency, the government released sandbox regulatory guidelines in June 2016,” explains BMI Research. Liew Nam Soon

Strong banking and investment environment in Singapore Marcus Chow

Source: BMI Trade and Investment Risk Index (100 = lowest risk; 0 = highest risk)

Ow Kim Kit

2016 slowdown The cautiously optimistic outlook for investment banks in Singapore follows a difficult 2016 during which investment banking activities decelerated and the Singapore’s gross domestic product (GDP) growth weakened. “Mergers and acquisitions (M&A) deals and initial public offerings were fewer in 2016 and this slowdown is felt in investment banking,” says Liew. “Soft commodity prices have also affected the performance of trading desks.” He reckons the slowdown in China’s economic growth and Singapore’s GDP growth have reduced the appetite for business expansion, which negatively affected loans growth. Amidst this slowing market, local investment banks have begun to feel the heat as Chinese investment banks raised their competitive aggresion. A small consolation for investment banks in Singapore is that SINGAPORE BUSINESS REVIEW | MARCH 2017 25


FINANCIAL INSIGHT: INVESTMENT BANKING hong kong view

Strong mobile penetration to facilitate fintech

Global goliaths get humbled in HK

Source: National sources/BMI (f = BMI forecast)

the government will likely rally to bring GDP growth back on track. “We expect the government to introduce new policy measures based on the recommendations of the Committee on the Future Economy – and in the Singapore budget announcements – to help businesses improve local value creation and expand overseas,” says Irvin Seah, senior economist at DBS. Still, he expects 2017 to be a year of consolidation, noting that whilst growth has bottomed it will remain tepid due to “challenging” global conditions such as stronger US trade protectionism, tightening monetary policy from the Federal Reserve, and a slowdown in China. “2016 was somewhat of an ‘annus horribilis’ for the equity teams of investment banks in Singapore,” says Chow. “Investment banks already burdened by enhanced regulatory oversight continue a struggle against weak market and fundraising conditions.” However, Chow adds, “The reprieve is that M&A work continues to thrive and the uptick in activities on the buy and sell sides is providing a consistent stream of work for the M&A teams in investment banks.” Silver lining Analysts note that despite the dire conditions in 2016, there were notable deals that continued to pull through. Ow says in 2016 she was working on an estimated US$400m collateralised loan obligation special purpose vehicle. It will securitise Asia emerging markets loans to borrowers in the Asia-Pacific region that were originated by both global and regional banks in Asia, and is envisioned to help revive the Asian securitisation market. A leading American investment firm, alongside leading banking institutions in Asia, are joint-arrangers on the transaction. In terms of sector focus and deal value, Liew reckons a large proportion of the deals have been in real estate, industrials, and technology. State and sovereign wealth funds executed a sizeable proportion of the deals. Investment banks in Singapore may continue to find success in these sectors, provided they can shape their business to suit the prevailing slow-growth, fintechinfluenced, compliance-heavy environment. “Although we are facing slower growth, businesses will continue to need help in raising capital, managing risks, and facilitating trade,” he says. “Investment banks have restructured their businesses and it is a journey and still work in progress. Controls and compliance are key.” 26 SINGAPORE BUSINESS REVIEW | MARCH 2017

Mergers and acquisitions deals and initial public offerings were fewer in 2016 and this slowdown is felt in investment banking.

When 2016 rang in, the Hong Kong investment banking scene took a sudden underdog storyline: Smaller local players began gobbling up more deals in equity capital markets (ECM), eating into a market previously cornered by global players. Analysts reckon this trend favouring smaller, as well as mainland, players will persist in 2017 due to the challenging environment that has put dominant international houses on a slump. “The market in Hong Kong is changing rapidly. It used to be dominated by Western-oriented international and global investment banks,” notes Keith Pogson, senior partner, Asia-Pacific financial services at EY. “But this has changed quite dramatically, with both a combination of mainland players and smaller local players having a much larger share of the action and role to play.” Dividing the deals pie In the ECM space, in which Hong Kong has remained as one of the most vibrant markets globally, deals are increasingly managed and underwritten by mainland or local houses. Pogson reckons this reflects China’s dominance of the deal flow at the large end of the market, and the abundance of deals with local houses and boutiques at the smaller end. Global players, by contrast, have been constricted to super large deals or deals that require a wider market nexus, and they will not likely regain their dominance in the coming years. “Capital markets deal flow has become more bifurcated, between the previously dominant international houses, who are generally getting a smaller slice of what was a reasonable sized pie in 2016, versus local and mainland players who have clearly been on an upswing in terms of market share,” says Pogson. “Pricing has remained tight given the dynamics and this, in the long run, is difficult to see recovering back to the richer levels historically enjoyed.” A key theme in 2017 will be a shift in focus to seizing “smaller deals with great potential,” says Mark Chan, managing partner at HM Chan & Co in association with Taylor Wessing, although there will be an occasional mega transaction. He notes a lack of sizeable transactions, especially in the initial public offering (IPO) space in Hong Kong.

Investment banks’ operating performance (inUS$b)

Sources: Company accounts, EY analysis


Co-published corporate profile

OrangeTee’s innovative review system helps agents to improve business

Singapore’s first and only agent search site with customers’ reviews makes OrangeTee the winner of the Innovator of the Year – Real Estate.

Steven Tan, managing director of OrangeTee

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016 is a year of disruptions. Many organisations believe that the best way to prevent major disruption is to disrupt their own businesses. However, it is easier said than done. The fact is by doing so means that the stakeholders of the organisations must be ready to sacrifice their short-term profit in exchange of better chance of business sustainability. OrangeTee strongly believes that selfdisruption is inevitable in the light of technological advancement and shifting consumers’ preferences. In February 2016, the real estate firm launched the Property Agents Bank, Singapore’s first and only agents search site providing customers’ ratings and reviews. This new platform also provides validated information such as the agent’s profile, track records, learning experience, and their property listings. “Technology is creating a mechanism to enable unknown people to trust each other. For example, the users of AirBnB rely on information on the website to decide whether they want to deal with each other. Obviously, it makes sense for us to leverage on technology to establish trust between our agents and their customers,” says Steven Tan, managing director of OrangeTee. To ensure the credibility of the review platform, only customers who have completed transactions with OrangeTee are invited to give their feedback. All feedback given by the customers are

posted directly to the website without any filtering. “Credibility, transparency, and accountability are the fundamentals for Property Agents Bank,” says Steven. “We are confident that by empowering customers to give feedback after the service, our agents will be motivated to provide good services. Ultimately, we hope to take the lead to lift up the professionalism of the industry.” In less than 10 months, OrangeTee has received more than 3,000 reviews. According to Steven, the figure is accelerating as more consumers are aware of this channel of finding agents. As a result, more OrangeTee agents have been receiving enquiries from new customers through Property Agents Bank. Exposure for agents One of the agents is Khair Bin Salahuddin. Two months ago, he received a call from an HDB seller who found him on Property Agents Bank. Within a short time, he helped the seller to sell their resale flat and subsequently received a 5-star rating with positive review from this seller. Khair notes, “With OrangeTee pioneering Property Agents Bank (PAB), property agents like myself have more exposure to potential customers who are seriously looking for good agents. I am glad that this new initiative has been generating new leads

for me.” Hehas received 21 reviews so far. The other agent is Richard Ho. Recently he received a call from a buyer through Property Agents Bank. In about a month, he helped this buyer to purchase an Industrial property in Ubi Avenue. He says, ”Property Agents Bank (PAB) has given my customers a platform to provide truthful reviews on my service. I always like to share these reviews on social media such as Facebook as it helped me to generate enquiries from friends and/ or their friends whom I do not know. Not only that, these reviews are a strong endorsement of my services to enable me to secure exclusive marketing appointment.” So far, Richard has received 23 reviews from his customers. Moving forward, OrangeTee is going to take advantage of the success of the Property Agents Bank and take this review platform to a new level. “Our Innovation Team has started to work on a newly dedicated website. We aim to provide a more intuitive search experience for our customers and most importantly, create an online environment to drive customer engagement,” says Steven. “In the new economy, innovation is the key to success. Therefore, we must treat it as an ongoing process rather than a single event. I am so pleased that it has been one of our core values since day one.”

“Technology is creating a mechanism to enable unknown people to trust each other.”

More OrangeTee agents have been receiving enquiries through Property Agents Bank

SINGAPORE BUSINESS REVIEW | MARCH 2017 27


singapore’s hottest startups 2017

All co-work and no play makes Jack a rich boy

Fintech and property dominate 2017 list This year’s crop of hottest startups doubled the average funding of 2016’s list to $3.2m.

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his is our sixth edition of the hottest startups issue where we present notable and up-and-coming local startups. To compile the list, we first looked at the weekly startups we feature on our website, sbr.com.sg, and we then filtered by amount of funding raised. We do not include startups where funding is not disclosed, and the companies must have formed in the last three years. Then we checked our list with eight industry players to weed out any companies that do

1. Funding Societies FounderS: Kelvin Teo, Reynold Wijaya Funding: $11,700,000; Sequoia India, Alpha JWC Ventures Start of operation: June 2015 Funding Societies is a FinTech startup that offers an online peer-to-business lending platform for small and medium enterprises to secure loans. Licensed by MAS, it enables individual and institutional lenders to earn equitable returns from lending to these SMEs. It offers unsecured loans, invoice financing and micro loans. Its vision is to help SMEs and lenders grow their business and wealth, ultimately improving societies in Southeast Asia. 28 SINGAPORE BUSINESS REVIEW | MARCH 2017

not make the grade. This year’s hottest startups average funding was $3.2m compared to $1.5m last year. We don’t claim that this is the most comprehensive list, and whilst we have tried to verify funding quantums, we cannot verify all amounts declared. Nevertheless, we feel this list represents the most talked about startups in Singapore. Enjoy the read and send feedback to research@charltonmediamail.com.

2. Smartkarma Founders: Raghav Kapoor, Jon Foster, Lee Mitchell Funding: $10,650,000; Wavemaker, Jungle Ventures, Tan Chin Hwee, SPRING Singapore, Consortium headed by Koh Boon Hwee Start of operation: 2014 Smartkarma is an innovative platform that provides unique and differentiated research on the Asian markets. The cloud-based platform enables a large community of analysts, academics, and other investment professionals to create interactive research content, share ideas, collaborate as well as discuss their opinions in real time.


singapore’s hottest startups 2017 3. S pac e m o b

6. SportsHero Founder: Dinesh Bhatia Funding: $3,400,000; Nevada Iron Ltd Start of operation: May 2016

Founder: Turochas Fuad Funding: $7,900,000; Vertex Ventures, Angel Investors, Alpha JWC Ventures Start of operation: September 2016 Spacemob is a coworking space built for entrepreneurs, freelancers, SMEs, and MNCs – supported by business foundations such as health insurance, travel and software discounts. Spacemob has a digitally optimised environment that includes high-speed Internet access, a centralised booking system, wireless payments, and plans to install RFID-tracking technology to maximise space efficiency. Spacemob believes a space is what you make of it. 4 . G u a v a P a ss Founders: Jeffrey Liu, Robert Pachter Funding: $7,100,000; Vickers Venture Partners and strategic investors Start of operation: May 2015 GuavaPass is an unlimited boutique fitness platform with a community of more than 1000 bookable fitness partners and tens of thousands of members across Asia and the Middle East. It selects the best studios across all fitness verticals including yoga, cross-functional training, pilates, crossfit, dance, and muay thai. Providing convenient access to top classes, the GuavaPass platform is designed to find what fits in with users’ schedule and interests. Members can explore quality fitness studios and meet like-minded healthy living enthusiasts. They also get exclusive access to events with wellness experts and a range of privileges from GuavaPass partners. 5. ServisHero Founders: Karl Loo, Jason Kang, Nicole Sia, Paul Copplestone, Adam Burmister Funding: $3,700,000; Golden Gate Ventures, Cradle Seed Ventures Start of operation: February 2015 ServisHero is a mobile services marketplace which connects trusted and vetted local service providers via a location-aware app and web platform to consumers across Southeast Asia. Service providers are rated by their clients, and these ratings are made public to potential new customers. ServisHero currently operates in six cities across three countries (Singapore, Malaysia, and Thailand).

SportsHero is a gamified social sports prediction platform where users can predict, interact, and compete on major sports whether virtually or real-time. It makes better predictions on the outcomes of games within its social community. Top-ranked sports fans are included on the leader board and can be eligible to win daily, weekly, and monthly prizes. Fans can interact with fellow sports fans on the SportsHero network in a number of ways to make any game more interesting and engaging. 7 . S h o p m at i c Founders: Anurag Avula, Kris Chen, Yen Ti Lim Funding: $3,000,000; Angel + Institution Start of operation: December 2014 Shopmatic is an e-commerce company which helps business owners go online to sell their products and services. From developing a unique web store to listing businesses on marketplaces and social media channels, it helps business owners in managing everything that is required to grow their businesses. Shopmatic leverages technology to bring together all the pieces of the ecommerce ecosystem on a single platform. It is focussed on levelling the ecommerce playing fields in Singapore, India, and Hong Kong and plans to roll out to more markerts soon. Currently Shopmatic has over 40 team members working in four offices across Asia. 8. Touche Founder: Sahba Saint-Claire Funding: $2,800,000; Private Investors Start of operation: 2014 Touché offers a unique buying experience linking payments, loyalty, and membership programmes in a pioneered fingerprintbased biometric hardware and software solution. Customers get all their entitlements – discounts, points, offers, etc. – at the point of interaction and no longer need to carry phones, cards, or cash. Available in Singapore, the solution is designed to scale globally so Touché users can use the service anywhere in the world after their first registration. SINGAPORE BUSINESS REVIEW | MARCH 2017 29


singapore’s COVER STORYhottest startups 2017 9. Popety

1 2 . D ata S t r e a m X

Founders: Michael Chaille, Jean-Frederic Thomas Funding: $1,690,000; Angel Investors, Mediacorp Start of operation: 2016

Founder: Mike Davie Funding: $1,250,000; Wavemaker Labs, National Research Foundation, JFDI.Asia, Select Angels Start of operation: 2014

Popety is a property management portal that supports customers in their complete real estate journey. It offers the tools for homeowners to sell and rent, manage tenants, and keep track of issues and earnings. It has compiled trends and insights, down to the unitlevel, for all residential properties in Singapore to assist seekers with making informed decisions in a shorter time. It leverages blockchain on data validation and artificial intelligence for price estimation. 10. Senescence Life Sciences Founder: Shawn Watson Funding: $1,500,000; Private Equity Start of operation: 2016 Senescence Life Sciences has developed a patent-pending systematic strategy designed to target the underlying mechanisms responsible for age-related cognitive decline. The result is a product line of safe, natural, and scientifically supported brain supplements specifically designed to support and optimise the ageing brain. Senescence Life Sciences was founded on the belief that everyone can take an active role in controlling their cognitive health. This vision stems from Shawn Watson’s first-hand experience in witnessing the devastating impact of dementia within his family. Dr Watson pursued a PhD in neuroscience, investigating why the brain suffers from a progressive decline as we age. 11. Greyloft Founders: Archit Agarwal, Siddhesh Narayanan Funding: $1,500,000; DSG Consumer Partners, Wavemaker Partners Start of operation: 2014 Greyloft is a licensed real estate agency integrating a suite of services to deliver a customer-centric home finding solution. Online tools are designed to assist customers through the course of the home renting/buying process from research to paperwork and post movein support. Offline services include a dedicated team of licensed in-house property agents who assist customers in shortlisting properties, coordinating viewings, negotiating terms, and moving in. 30 SINGAPORE BUSINESS REVIEW | MARCH 2017

DataStreamX is a real-time data transaction platform and marketplace. Working directly with companies seeking to commercialise high-value data products, it unlocks new data sources making them available to data scientists and business analysts. Data products available through the platform allow for companies to do everything from conducting better analysis on their target customers to making better investment decisions that generate alpha. 13. Nextgen Shopping Founder: Rajiv Srivastava Funding: $1,240,000; Seed Investors Start of operation: October 2015 NextGen Shopping Pte Ltd is a technology company which revolutionises the future of shopping. It uses the vision of “enhancing the experience of online shopping using the latest imaging technologies”. NextGen Shopping Pte Ltd aspires to be one of the world’s best technology companies specialising in web-based 3D reconstruction, virtual, augmented, and mixed reality. It implements technologies in 3D reconstruction and visualisation and makes it available on most viewing devices. NextGen Shopping Pte Ltd, which originated in Singapore and has a development facility in India, aims to develop the world’s largest resource of 3D views and experiences for clients. 14. Biofourmis Founders: Kuldeep Singh Rajput, Wendou Niu Funding: $1,050,000; SpesNet, Eden Strategy Institute, Infocomm Media Development Authority Start of operation: 2015 Biofourmis uses cognitive technologies to analyse healthcare and lifestyle data. It has built Biovitals – the world’s first physiological data analytics engine that formulates personalised health models, resulting in highly optimised post-acute patient monitoring solutions and accurate health predictions, such as patient’s health deterioration before it happens.


singapore’s hottest startups 2017 15. Spiking Founder: Clemen Chiang Funding: $1,030,000; Quest Ventures, National Research Foundation, Angels from capital markets led by Koh Boon Hwee Start of operation: 2016 Spiking consolidates the latest disclosures published on the Singapore Exchange (SGX) to give retail investors a fast update in on share trades by significant investors. Spiking is something of a comeback for Clemen after a previous share investing training company he was involved with had to repay students course fees. SBR has tried the Spiking app and likes how it works.

1 8 . K a sh m i Founders: Rakhil Fernando, Rajinda Jayasinghe, Mufaddal Lukmanjee Funding: $800,000; VAMM Ventures, FICO Group, Akbar Brothers Start of operation: 2014 Kashmi is a social, mobile, neo-banking product with features that enable on-the-go spending, saving, lending, investing, and budgeting. Users utilise the platform as their primary bank account, wherein users can manage their finances, send/receive money to/ from friends or service providers, save, invest, and even take loans. Kashmi’s founders wanted a better way to settle debts between friends without the use of cash.

1 6 . Oh m y H o m e

1 9 . Fl y s p a c e s Founders: Mario Berta, Guillaume Martin Funding: $700,000; Future Now Ventures, Narra Ventures, Coent Venture Partner of Singapore, Rubina Real Estate Start of operation: September 2015

Founders: Rhonda Wong, Race Wong Funding: $1,000,000; PrimeFounders, Angel investors Start of operation: 2016 Ohmyhome is a real estate platform and a CEA-licensed real estate agency which lets users buy, sell, or rent HDB flats on their own. It directly connects Housing and Development Board (HDB) buyers to sellers, and tenants to landlords. All listings on Ohmyhome are genuine, non-duplicate, and easy to browse. There is zero advertising cost, no middlemen, and there are no charges for a successful search. Ohmyhome users can save their search and are notified when there is a match. Special map functions also enable homeseekers to find the ideal home near neighbouring schools or close to parents in order to qualify for proximity housing grant. 17. Zingohub Founders: Nasir Kausar, Haider Aly-Reza, Sayantan Das Funding: $900,000; Private Investors, Family Office, Turn8 Start of operation: 2015 ZingoHub is a reward-based crowdfunding, e-commerce platform that assists creators and innovators in bringing their ideas to the market. It helps aspiring artists, designers, and tech entrepreneurs to showcase their ideas and inventions to the worldwide community and offers creators and innovators the opportunity to raise funds from like-minded individuals. ZingoHub has the resources and tools to help creators and innovators become disruptive entrepreneurs.

FlySpaces, billed as an Airbnb for workspaces, is a digital marketplace that provides flexible short-term work and meeting space solutions to entrepreneurs, startups, SMEs, and mobile professionals. The need could be for an hour, a day, a week, or a few months. With a network of spaces in Southeast Asia, FlySpaces offers venues in Singapore, Manila, Cebu, Kuala Lumpur, Hong Kong, and Jakarta. For venue owners, FlySpaces acts as a digital marketing platform that connects them to a vast user base, allowing owners to optimise and monetise their space. 20. Fo o dz a p s T e c h n o lo g y Founder: Winson Tan Huey Meng Funding: $600,000; Angel Investors Start of operation: January 2014 FoodZaps is a system that streamlines customer ordering and payment processes in cafes, restaurants, and bars. The system facilitates the ordering of products through the use of a mobile device. It integrates customer billing and payment and has an online portal that generates sales reports, providing insights into customer behaviour and product popularity. FoodZaps helps F&B businesses have access to a scalable solution that will allow them to be more connected. SINGAPORE BUSINESS REVIEW | MARCH 2017 31


RANKING: LAW Firms EDITION hotels in Singapore. It also represented Pro-invest Hotels Group on its groundbreaking fund developing Holiday Inn Express branded hotels in Australia and New Zealand, which involved working with franchisor InterContinental Hotels Group’s Singapore regional head office. “Despite the downturn in the global economy in 2016, the region continued to see large amounts of economic activity and, operating from the regional hub, Singapore’s legal sector is increasingly involved in regional work,” says Anparasan. “The expansion allows us to offer our clients advice from Singapore on cross-border investments involving many countries, including the United Kingdom, India, Indonesia, and other parts of Southeast Asia.” New Mediation Act will make international commercial settlements more enforceable

Regional demand provides opportunities for law firms

Notable changes happened in 2016, including the setting up of a unified One Judiciary IT Steering Committee and the Technology Blueprint for courts.

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s 2016 unfolded, Singapore’s largest law firms saw their international clients shifting their focus on winning in Southeast Asia and the larger Asia Pacific region. Stuttering economic growth and surprising global events in the past year convinced more clients to seek cross-border advice from local firms, and leverage on the latter’s regional expertise to ride out the uncertainty. “There was a greater demand for advice on cross-border debt restructuring as clients sought to deal with the economic headwinds,” says K Anparasan, partner at Withers KhattarWong. “Surprises presented by global events in the past year, such as the outcomes of the UK’s Brexit referendum and the US elections, also contributed to an increase in demand for cross-border advice.” He adds, “Clients with investments overseas, or plans to invest overseas, 32 SINGAPORE BUSINESS REVIEW | MARCH 2017

There were tremendous prospects in the region as well as those arising from technology and socio-economic changes.

are increasingly looking for international law firms with a strong local presence and expertise in the jurisdictions they are investing in.” In response to a client landscape that placed greater value in regional prowess, KhattarWong grew two practices: Corporate and Hotels & Hospitality. The existing corporate team was expanded through the hires of well recognised partners Farhana Siddiqui and Mahesh Kumar in 2016. KhattarWong also expanded their presence in the region with the appointment of the Hotels & Hospitality team. In early 2016, the law firm began with the strategic hire of lawyers specialising in hotels and hospitality in Singapore and Australia, led by Asia Pacific Hotels & Hospitality leader Robert Williams. Recent milestones for the practice include acting for Marriott International on its appointment to operate the first JW Marriott and

Tremendous prospects Falling commodity prices and China’s economic slowdown further dampened the outlook in 2016, but clients continued to see opportunities in the region and call for legal and professional services. “There were tremendous prospects in the region as well as those arising from technology and socioeconomic changes,” says Azman Jaafar, deputy managing partner at RHTLaw Taylor Wessing. “Our active presence in ASEAN (Association of Southeast Asian Nations) kept us busy since the beginning of the year.” He cites a few key themes in 2016: Chinese funds looking at mergers and acquisitions activities outside of China, Indonesia’s recent easing of foreign investment restrictions, and Vietnam’s emergence as one of the fastest-growing markets in the world. Amongst the sectors, life sciences, technology, and cleantech industries were teeming with opportunities. Keeping up with these deal trends, RHTLaw Taylor Wessing strengthened their regional crossborder practice through the merger with PBC PARTNERS & RHTLaw to form RHTLaw Taylor Wessing Vietnam, which was launched


RANKING: LAW Firms Size comparison of law practices and profile of legal practitioners

Source: The Law Society of Singapore

in June 2016. Jaafar reckons the merger was aligned with the ASEAN Economic Community Blueprint 2025, which aims to develop a a cohesive ASEAN community integrated with the global economy. The law firm also boosted their presence in Hong Kong and Greater China through an official association with local firm H.M. Chan & Co in Hong Kong in July 2016. Jaafar says the association with H.M. Chan & Co should create “unprecedented opportunities for cross-border collaboration between Hong Kong and Greater China, and the rest of our ASEAN offices.” These recent moves to boost regional expertise further builds on the firm’s launch of the ASEAN Plus Group (APG) in 2014. The APG is made up of leading law firms from 12 lucrative markets in the region: Singapore, Cambodia, Hong Kong, Indonesia, Laos, Malaysia, Myanmar, Philippines, South Korea, Taiwan, Thailand, and Vietnam. After a turbulent 2016 that brought regional opportunities into heightened focus, the next 12 months should steer Singapore’s largest law firms to assist clients in distress and those that are on digital frontier of financial technology (fintech). “There may be increased activity in the insolvency-related practice areas due to continued stress in the oil & gas, real estate, and shipping sectors,”

says Amit Dhume, partner, funds and financial services at Colin Ng & Partners. “Fintech is gaining traction in Singapore as well, and areas of law linked to this sector will benefit.” Thriving in 2017 This year will bring on robust demand for legal services pertaining to fintech, specifically in the development of ecommerce and eBanking, mobile payments, crowd investing, and other innovative payment solutions, says Sandra Seah, joint managing partner at Bird & Bird ATMD LLP. “Fintech will continue to be a hot topic,” says Seah. “Lawyers will be grappling with the same issues that the financial services industry is facing as a result of disruptive digital technologies emerging in a highly connected world.” With fintech’s expected acceleration, the startup scene in Singapore and the rest of the region is also expected to remain active. Seah reckons angels, startups, research and development institutes, and technopreneurs will be rushing to seek legal advice on collaborations, protection of intellectual property, and fundraising regulations. Philip Jeyaretnam, SC, global vice chair & CEO, Dentons Rodyk, cites technology as a means to improve the quality of legal services. “CJ Sundaresh Menon established the Courts of the Future Taskforce to undertake a strategic study on

Lawyers will be grappling with the same issues that the financial services industry is facing as a result of disruptive digital technologies emerging in a highly connected world.

harnessing technology to enhance the administration of justice. This has resulted in the setting up of a unified One Judiciary IT Steering Committee and the Technology Blueprint for the courts over the next five years,” he says. In 2016, his firm finalised the merge with global law firm Dentons, transforming into Dentons Rodyk. As for new regulation, Jeyaretnam says, “New Mediation Act will make international commercial settlements more enforceable. This could help draw more mediation to Singapore.” Meanwhile Anparasan says the country is taking notable steps to become a more attractive arbitration venue, and serve as a boon for some law firms. The Singapore Arbitration Centre launched the sixth edition of its Arbitration Rules in August 2016, as well as its Investment Arbitration Rules, which took effect in January 2017. “The new and updated rules keep Singapore at the forefront of international standards,” says Anparasan. When taken all together, these regional and sector opportunities present a chance for Singapore’s law firms to shake off the economic jitters and outrun the competition. “The legal profession needs to be nimble, cost-effective, and sympathetic to the challenges faced by the clients to earn its place as not just legal advisors but trusted business partners,” says Seah. Still ranked number 1 in Singapore Business Review’s 25 Largest Law Firms is Allen & Gledhill LLP, with 372 legal professionals compared to 355 in 2015. Their previous chairman and senior partner, Lucien Wong, was appointed the Attorney-General of Singapore on 14 January 2017. Christina Ong and Penny Goh have taken over as cochairmen and senior partners.

Major law firms in Singapore

Source: Colliers International

SINGAPORE BUSINESS REVIEW | MARCH 2017 33


RANKING: LAW Firms 2016

Law Firm

2015

Foreign/ Local

2016 LEGAL Professionals

2015 Legal Professionals

Managing Partner

1

Allen & Gledhill

1

LOCAL

372

355

LEE KIM SHIN, SC

2

Rajah & Tann

2

LOCAL

347

334

LEE ENG BENG, SC, PBM

3

Wong Partnership*

3

LOCAL

302

302

NG WAI KING, RACHEL ENG

4

Drew & Napier

4

LOCAL

267

278

DAVINDER SINGH, SC

5

DENTONS Rodyk & Davidson

5

LOCAL

206

229

PHILIP JEYARETNAM, SC

6

RHTLaw Taylor Wessing LLP

6

LOCAL

115

109

TAN CHONG HUAT

7

Baker McKenzie Wong & Leow

9

FOREIGN

114

96

ANDY LECK

8

Shook Lin & Bok LLP

7

LOCAL

104

98

SARJIT SINGH GILL, SC

9

Withers KhattarWong

13

LOCAL

103

67

DEBORAH BARKER, SC

10

Lee & Lee

8

LOCAL

102

97

MDM KWA KIM LI

11

Clifford Chance

10

FOREIGN

94

93

KAI SCHNEIDER

12

Norton Rose (Asia) LLP

12

FOREIGN

73

72

JEFF SMITH

13

MORGAN LEWIS STAMFORD

11

LOCAL

71

75

Suet-Fern Lee

14

Harry Elias Partnership LLP

15

LOCAL

69

62

PHILIP FONG

15

Allen & Overy*

14

FOREIGN

66

66

CHRISTOPHER MOORE

16

Linklaters

17

FOREGN

61

55

CHRISTOPHER BRADLEY

17

TSMP Law Corporation

16

LOCAL

60

60

THIO SHEN YI, STEFANIE YUEN THIO

18

Herbert Smith Freehills

18

FOREIGN

59

51

ALASTAIR HENDERSON

19

Colin Ng & Partners LLP

19

LOCAL

42

49

LISA THENG

19

Kelvin Chia Partnership

21

LOCAL

42

42

KELVIN CHIA

19

Tan Kok Quan Partnership

24

LOCAL

42

39

MARINA CHIN, EDDEE NG

22

Bird & Bird ATMD LLP

20

LOCAL

40

43

LORRAINE ANNE TAY, SANDRA SEAH

23

Tan Peng Chin

22

LOCAL

40

40

WONG LIANG KOK, LIM JO SEE

24

Latham & Watkins

23

FOREIGN

37

41

SHARON LAU

25

Holman Fenwick Willan

25

FOREIGN

35

35

MERT HIFZI

TOTAL

2855

2788

DATA PROVIDED BY COMPANIES. SURVEY PERIOD: SEPTEMBER - OCTOBER 2016 *DATA RETAINED FROM 2015 REPORT

34 SINGAPORE BUSINESS REVIEW | MARCH 2017


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innovating the way brands are built

What if? What if we could see Ayrton Senna race again? What if our cars could navigate us through a natural disaster? What if we could use brainwaves to communicate? What if we could take over Pinterest? What if we could get people to queue for a store opening, online? What if we could get five salarymen to dance with a gorilla in the jungle? What if we could send a robot into space? What if we could snare an Oscar when everyone is busy chasing lions? Amazing things happen when we ask “What if?� instead of accepting what is.

Winner of Employee Engagement of the Year - Business Services


RANKING: INSURANCE FIRMS insurance wallet, social insurance, and health insurance for expats. In terms of hiring, highly innovative and technology savvy employees are sought after. In a 2017 quarterly report, Hays recruitment says a customer-centric industry today will need talents who are eloquent in the languages of the digital world. Insurance companies will need to increase their investment in data analytics by hiring professionals who have been trained to understand consumer behaviour, thereby enabling insurers to tailor-fit their services to more specific client demands.

Insurers are now able to tailor-fit their services to more specific client demands

Insurance firms play catch up with digital disruptors

Traditional business models are transformed to address emerging needs.

T

he FinTech revolution has been changing the global financial services landscape, pushing insurance firms to step up to the digital dare. Executives are challenged to transform traditional business models and offer dynamic solutions to emerging needs, ranging from standalone apps to integrated services on social media. George Kesselman, CEO and founder of Insurtech Asia, says insurers are changing their attitude to digital innovation. Such a direction has also led these companies to collaborate with startups, with NTUC and Raxel, and AXA and MyDoc as some of the recent examples of insurer-startup collaborations. Raxel’s arrival in Singapore in 2016 began with a partnership with NTUC Income, with the former providing analytics services so that NTUC may come up with more down-to-earth and customised insurance schemes. 36 SINGAPORE BUSINESS REVIEW | MARCH 2017

With the rise in the number of digital disruptions and innovations, Singapore’s insurance industry also saw the emergence of InsurTech companies.

In 2016, Singapore was introduced to its first fully direct and online life and general insurer, FWD Insurance. In September 2016, FWD announced the launch of its direct term life insurance product with a 100% direct and digital approach that will enable people to select their cover, online or using their mobile, and receive a simplified quote in under 60 seconds. Online health insurance brokerage CXA also broke some records when it raised US$25m in a US$100m valuation. Emergence of InsurTech With the rise in the number of digital disruptions and innovations, Singapore’s insurance industry also saw the emergence of InsurTech companies such as ConneXions, Shift Technology, BIMA, PolicyPal, InsBee, and UEX. These startups provide expertise and services in digital employee benefits brokerage, fraud detection, micro-insurance, digital

Who made it to the SBR’s list? AIA Singapore remains on top with total assets of $37,839,527,353. Coming at a close second is NTUC Income Insurance Cooperative Limited with total assets amounting to $30,504,022,022. Transamerica Life (Bermuda) Limited made it to the top 10, edging out the previous top 10, Swiss Life Limited. AIA Singapore has introduced AIA Quality Healthcare Partners as a way to manage rising healthcare costs and ensure affordability of insurance premiums. The platform is composed of a network of over 100 trusted medical professionals, who will provide customers access to affordable, quality healthcare services. AIA Singapore has sought to make this service available through a website, an app, and appointment services for greater customer convenience. “As a leading life insurer in Singapore, we play a vital role in addressing national issues through efforts aimed at mitigating healthcare cost inflation, keeping insurance premiums affordable, curtailing the economic burden of lifestyle diseases of an ageing population, and facilitating improvements in employee productivity levels amongst others,” says Ho Lee Yen, chief marketing officer at AIA Singapore. For individuals, AIA Singapore also launched its AIA Vitality Weekly Challenge app to encourage clients to boost their productivity and remain active.


RANKING: INSURANCE FIRMS 2016 Overall Ranking

Classification

Insurance FIRM

2015 Overall Ranking

Total Assets 2015

Total Assets 2014

1 2

General/Life

AIA SINGAPORE PRIVATE LIMITED

1

$37,839,527,353

$35,371,886,441

General/Life

NTUC INCOME INSURANCE CO-OPERATIVE LIMITED

2

$30,504,022,022

$30,880,406,566

3

Life

PRUDENTIAL ASSURANCE CO. SINGAPORE (PTE) LTD

3

$29,298,663,781

$28,643,271,548

4

Life

GREAT EASTERN LIFE ASSURANCE COMPANY LIMITED

4

$29,155,492,269

$28,111,703,499

5

Life

MANULIFE (SINGAPORE) PTE. LTD.

5

$6,572,316,259

$5,927,480,876

6

General/Life

AVIVA LTD

6

$6,182,611,883

$5,519,093,619

7

General/Life

OVERSEAS ASSURANCE CORPORATION LIMITED

7

$5,742,571,772

$4,852,414,817

8

Life

TOKIO MARINE LIFE INSURANCE SINGAPORE LTD

8

$5,056,107,876

$4,610,419,476

9

Life

HSBC INSURANCE (SINGAPORE) PTE. LIMITED

9

$4,352,838,661

$3,714,125,569

10

Life

TRANSAMERICA LIFE (BERMUDA) LTD. (SINGAPORE BRANCH)

12

$2,865,132,882

$2,018,326,026

11

General/Life

ALLIANZ SE, SINGAPORE BRANCH

11

$2,757,029,569

$2,277,480,987

12

Life

SWISS LIFE (SINGAPORE) PTE. LTD.

10

$2,608,932,053

$2,892,170,834

13

Life

AXA LIFE INSURANCE SINGAPORE PRIVATE LIMITED

13

$2,076,233,377

$1,877,838,101

14

General/Life

SWISS REINSURANCE COMPANY LIMITED

14

$1,871,018,603

$1,844,646,351

15

General/Life

MUENCHENER RUECKVERSICHERUNGS GESELLSCHAFT

16

$1,672,279,116

$1,510,034,032

16

General

IAG RE SINGAPORE PTE LTD

17

$1,664,329,935

$1,406,864,426

17

General/Life

ASIA CAPITAL REINSURANCE GROUP PTE LTD

15

$1,598,469,347

$1,673,535,283

18

General

FIRST CAPITAL INSURANCE LTD

18

$1,229,154,899

$1,116,760,277

19

Life

OLD MUTUAL INTERNATIONAL ISLE OF MAN LIMITED SINGAPORE BRANCH

20

$1,097,485,976

$887,238,018

20

General

ODYSSEY REINSURANCE COMPANY

21

$956,782,371

$878,129,087

21

General

AXA INSURANCE SINGAPORE PTE LTD

19

$955,421,350

$953,561,515

22

General

EVEREST REINSURANCE COMPANY

22

$908,790,749

$865,579,254

23

General

AIG ASIA PACIFIC INSURANCE PTE. LTD.

23

$893,050,316

$861,907,560

24

Life

ZURICH INTERNATIONAL LIFE LIMITED (SINGAPORE BRANCH)

25

$840,001,931

$690,631,680

25

General

INDIA INTERNATIONAL INSURANCE PTE LTD

24

$792,077,432

$799,631,732

26

Life

FRIENDS PROVIDENT INTERNATIONAL LTD (SINGAPORE BRANCH)

26

$771,371,433

$525,214,733

27

General

PARTNER REINSURANCE ASIA PTE. LTD.

42

$717,169,394

$264,471,229

28

Life

SCOR GLOBAL LIFE SE SINGAPORE BRANCH

29

$642,678,801

$532,133,949

29

General

ALLIANZ GLOBAL CORPORATE & SPECIALTY AG, SINGAPORE BRANCH

28

$630,408,823

$589,982,475

30

General

MSIG INSURANCE (SINGAPORE) PTE. LTD.

27

$626,372,666

$632,139,170

31

General

TOKIO MARINE INSURANCE SINGAPORE LTD

30

$529,044,004

$500,459,575

32

General

ALLIED WORLD ASSURANCE COMPANY, LTD, SINGAPORE BRANCH

-

$500,452,892

-

33

General

SOMPO INSURANCE SINGAPORE PTE. LTD.

31

$479,574,338

$476,562,549

34

General

QBE INSURANCE (SINGAPORE) PTE. LTD.

35

$441,420,880

$396,081,167

35

General

THE TOA REINSURANCE COMPANY LIMITED

32

$435,316,729

$458,839,678

36

General

LIBERTY INSURANCE PTE LTD

36

$404,777,807

$384,546,363

37

General

ROYAL & SUN ALLIANCE INSURANCE PLC, SINGAPORE BRANCH

34

$404,232,775

$404,232,775

38

General/Life

SCOR REINSURANCE ASIA-PACIFIC PTE LTD

33

$397,822,919

$411,227,936

39

General

XL RE LTD

37

$360,689,165

$342,797,744

40

General

CHINA TAIPING INSURANCE (SINGAPORE) PTE. LTD.

39

$328,674,850

$311,833,786

41

General

AXIS SPECIALTY LIMITED (SINGAPORE BRANCH)

-

$326,658,467

-

42

General

SWISS RE INTERNATIONAL SE, SINGAPORE BRANCH

50

$318,702,667

$178,187,890

43

General

SINGAPORE REINSURANCE CORPORATION LTD

38

$307,609,089

$328,534,161

44

General

FEDERAL INSURANCE COMPANY

40

$284,869,471

$295,637,218

45

General

BERKSHIRE HATHAWAY SPECIALTY INSURANCE COMPANY

-

$282,625,368

-

46

General

UNITED OVERSEAS INSURANCE LTD

41

$272,559,322

$266,747,693

47

General

ENDURANCE SPECIALTY INSURANCE LTD, SINGAPORE BRANCH

46

$254,006,490

$207,611,894

48

General

AXA CORPORATE SOLUTIONS ASSURANCE SINGAPORE BRANCH

44

$251,646,915

$217,355,026

49

General

SIRIUS INTERNATIONAL INSURANCE CORPORATION

43

$247,678,931

$218,062,134

50

General

XL INSURANCE COMPANY PLC, SINGAPORE BRANCH

47

$227,508,348

$200,667,909

DATA COMPILED FROM MONETARY AUTHORITY OF SINGAPORE: NOVEMBER 9, 2016

SINGAPORE BUSINESS REVIEW | MARCH 2017 37


Legal briefing

MAS to get more powers under reforms The changes may strengthen Singapore’s position as an international centre for debt restructuring.

C

orporate law in Singapore is expected to be affected by amendments to the Securities and Futures Act, as well as the Companies Act. The proposed changes are said to be in line with the citystate’s initiative to reinforce its major financial centre status. Five partners share their thoughts including what the new year has in store for Singapore’s legal industry. SFA changes Amit Dhume, partner, funds and financial services, Colin Ng & Partners, says that as far as the area of corporate law is concerned, amendments to the Securities and Futures Act (SFA) recently passed by the parliament will bring investment schemes that invest in physical assets like plantations under the regulatory ambit of the Monetary Authority of Singapore. “This will offer better protection to retail investors,” says Dhume. “The manner in which net personal assets is calculated for a person to qualify as an ‘accredited investor’ will also be tightened, and accredited investors will have an option to be treated as a non-accredited investor by financial institutions.” Sandra Seah, joint managing partner, Bird & Bird ATMD LLP, notes the SFA may be amended to provide stronger safeguards for retail investors and to strengthen enforcement against market misconduct. Commercial entities offering securities will likely need to reassess how best to manage their risk in their product offerings. “The changes to more stringent regulation and stricter

“The proposed changes to the Companies Act in 2017 are in line with Singapore’s initiative to reinforce its major financial centre status, and to position itself as a hub for restructuring and insolvency practice.” supervision by MAS of the capital markets will allow fairer and more transparent markets to support trade and economic growth,” she says. Amendments to Companies Act Sim Lin Piah, director, banking & finance department, Tan Peng Chin, believes that changes to the Companies Act in 2017 will have the most impact on cases in the next 12 months. “Such changes include obligations on companies – including foreign companies registered in Singapore – to disclose beneficial ownership in line with the Financial Action Task Force goals and new provisions to support debt restructuring,” he says. The former, he notes, will have a wider impact but the latter – embracing the concept of rescue financing, and which will be accessible to all companies “with a 38 SINGAPORE BUSINESS REVIEW | MARCH 2017

Amit Dhume

Sim Lin Piah

Lorraine Tay

Sandra Seah

Sean La’Brooy

substantial connection to Singapore” – will have profound implications for the restructuring and insolvency practice. He adds that the proposed changes to the Companies Act in 2017 are in line with Singapore’s initiative to reinforce its major financial centre status, and to position itself as a hub for restructuring and insolvency practice. Sharing similar sentiments is Seah, who says the Companies Act will be amended to include new provisions to support creditor schemes of arrangements and to enhance creditor protection. “Such amendments may strengthen Singapore’s position as an international centre for debt restructuring and possibly encourage more companies to apply for judicial management in this challenging economic environment,” says Seah. More disputes cases It has been an interesting start to 2017 on the dispute resolution front, says Sean La’Brooy, partner, professional liability and insurance practice, Colin Ng & Partners. “It is likely that we will see more international parties bring their disputes to Singapore, particularly for international commercial arbitrations, in light of the introduction of a framework for third-party funding under the Civil Law Act (Amendment) Bill 2016 which was passed by Parliament on 10 January 2017,” says La’Brooy. La’Brooy further notes that Parliament also passed the Mediation Bill 2016 which is part of efforts to develop Singapore as an international commercial mediation centre. “A key aspect of the Bill is that it will allow parties to record settlements arising from mediation as an Order of Court,” says La’Brooy. “With greater enforceability and confidentiality assured, mediation will be an attractive alternative to court proceedings as a dispute resolution mechanism for businesses of all sizes to consider.” The Ministry of Law says introducing third-party funding will enable international businesses to use funding tools available to them in other centres, promoting the citystate’s growth as a leading international arbitration venue. Enhancing disputes capabilities According to Lorraine Tay, joint managing partner, Bird & Bird ATMD LLP, one of the challenges faced today is the tide of uncertainty, heightened by political changes around the globe. Tay also says that the world is already beginning to see some impact on the political and economic state of play in Asia, particularly with key players like China, Japan, and the Philippines. “From Singapore’s perspective, it is important that we continue to play a pivotal role and provide stability as an international hub, with a transparent, efficient, and effective legal framework,” Tay says. “In this regard, with the passing of two recent bills – Civil Law Amendment Bill and the Mediation Bill – Singapore seeks to bolster its offering as a commercial arbitration and dispute resolution hub.”


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CMO Briefing

Going virtual takes marketers only halfway Customer experience still needs to be holistic, by connecting via multiple virtual and physical touchpoints.

W

hilst technology plays an increasingly bigger role for marketers to easily reach more consumers, meaningful connections are still crucial. In 2017, Scott Anderson, CMO of Sitecore, expects to see game-changing innovation as consumers push digital transformation to new heights. When widespread consumer adoption meets rapid technology evolution, expectations change. He cites a survey by Sitecore and Vanson Bourne, which found that six in 10 consumers expressed a shortfall between their expectations and the experiences that brands deliver. “Whilst the survey revealed that missed expectations come with such negative consequences like shared complaints and lost business opportunities, 75% also expressed increased loyalty when brands get it right,” he notes. “Innovative brands are – and should – start to leverage on the latest technology to leapfrog old business models and provide enhanced services whilst exceeding consumers’ expectations.” Immersive videos, AR, and VR Smriti Kataria, director of research and marketing at Near, says that with customers spending more time on devices, and making more decisions on them, there will be an increased focus on driving holistic customer experience through multiple virtual and physical touchpoints. This means, Kataria says, many marketers will invest in data platforms that would enable them to make sense of the massive data available today – and act on it. “Videos will continue to grow through 2017 for the simple reason that they work. What will emerge in 2017 are the new ways of making these videos immersive. This could vary from streaming them live to creating relevant and engaging video content.” 40 SINGAPORE BUSINESS REVIEW | MARCH 2017

The challenge for marketers will be to learn how to create content for these formats, to fully leverage the opportunities they offer.

According to Marta DeBellis, Adobe APAC vice president of marketing, technologies such as augmented reality (AR), virtual reality (VR), and machine learning captured the imaginations of marketers globally in 2016 with the introduction of Nintendo’s new AR offering Pokemon Go. “AR and VR will change the way marketers can engage with consumers and drive experiences with what is possible today,” says DeBellis. “The challenge for marketers will be to learn how to create content for these formats, to fully leverage the opportunities they offer.” In addition, DeBellis notes, machine learning and data science will offer significant productivity opportunities for marketers, allowing them to focus their time on their overall strategies and away from day-to-day analytics and data management. DeBellis notes, though, that whilst data has given marketers the power to demonstrate return-on-investments and drive business growth, it is well worth remembering that creativity still plays a significant role. Analytical marketing Eva Phua, marketing director of SAS, says that whilst delivering personalised customer experiences may sound simple, the fact is many organisations are still struggling to get started. “The problem lies with multiple organisational silos, disintegration of online and offline data, rigid customer databases, as well as being locked into inflexible legacy systems – all of which only provides a fragmented view of the customer,” Phua notes. In 2017, analytical marketing will be at the forefront of business growth and soughtafter personalised customer experience growth. But whilst the use of customer experience-related technology and processes will be a differentiator, delivering superior customer experience isn’t just about deploying machines and implementing systems, Phua notes. “The success of such efforts rely on the people who build and manage these systems,” she says. “We expect to see a higher demand for the marketers who will be able to unite the art and science of marketing, to engage customers the way they want it across multiple channels, devices and media, whilst still respecting the privacy of the customer.” Apps are apt The future is mobile and something that marketers will need to continuously consider, says Pamela Knaggs, marketing manager of Skyscanner. “We see this as not only central to our business but to the future of travel planning and booking. Our Travel Content Survey suggests that at least 49% of users in Singapore search for travel content whilst commuting,” she says. It is no longer just about “optimising” your content for mobile, Knaggs says, but the ability to provide customised user experience based on search preferences and integrated with a user’s on-the-go lifestyle. “Based on feedback from customers, we see a preference for integrated apps that can make the experience from search to booking flights, hotels, and cars as easy and seamless as possible.”


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OPINION

Ben Chew

A bird’s eye view of temporary and contract employment in Singapore

I

s contracting the new normal? With offshoring, redundancies, and talks of economic slowdown, it’s quite a respite to see optimism in the contracting space with demand for contractual workers on the rise in 2016 and beyond. Many financial institutions in the region are focussed on hiring contractual talent, instead of permanent hires, owing to the slump in the global economy. Also what is interesting is that a lot of senior and experienced professionals in Singapore from the banking and finance industry are open to working on contracts. With flexi-work and remote working arrangements as an employment option on the rise, the issues of global talent crunch and skills shortage seem to have been temporarily addressed with contracting models at play. Supporting this boom are the advancements in technology that facilitate easy global connectivity across markets to connect with professionals and get work done at lower costs. Singapore which was then known for being an immature market for contracting has seen an evident increase in the number of temporary and contractual workers in recent years. According to the Manpower Ministry’s 2015 Labour Force Report, there were 202,400 contract employees in Singapore in 2015, thus forming 11.3% of the resident workforce. Employees who have worked for the company for at least three months as terms of the contract are entitled to annual leave, sick leave, maternity leave, paternity leave, adoption leave, and extended childcare leave. Supporting contractual workers Unlike freelance work, which requires an employee to work on specific projects, contractual hires are on fixed-term employment contracts, and their association with the company ends on expiry of the contract period, unless further renewed. Generally contracts in Singapore and Hong Kong are for duration of a year, and this work model is being increasingly used by large banks and corporations such as Citi, Standard Chartered, J.P. Morgan, and HSBC, to name a few. Whilst hiring contract workers is made with an attempt to reduce headcounts and costs incurred without impacting productivity loss, banks in Singapore are cautious when it comes to turning a contractual employee into a permanent one – unless they prove themselves to be high-performing and valuable to business. Contracting is not just restricted to blue-collar jobs today, even white-collar jobs in banks and financial institutions have been impacted by the gig economy. Ministry of Manpower (MOM), National Trades Union Congress (NTUC), and the 42 SINGAPORE BUSINESS REVIEW | MARCH 2017

BY BEN CHEW Business Director TBC HR Consulting

Singapore National Employers Federation (SNEF), have jointly congregated efforts to support contractual workers in the region by setting up Tripartite Guidelines on the Employment of Term Contract Employees. Why opt for contract working? Some of the undeniable advantages of contract working until you secure a permanent job are: 1) It’s easy to move on. If you do not like the environment of your current contract, you can easily move on to a new contract without worrying about how it may appear to your new employer. You do not need to show loyalty, the contract only seeks excellent service. 2) You are your own brand. This means you cannot take your job for granted. If you do not meet your employer’s expectations there is always someone in queue to replace you. The competition has got a lot tougher, and if you charge a premium, then your performance should justify your income demands. 3) You have to earn your keep and the employer gets what they want. This creates a win-win situation for both the employer and the employee into a contract. 4) Added flexibility and more benefits are rewarded when an employee exceeds performance expectations. With companies emphasising on profits and competitiveness, the contractual workers are consistently evaluated based on their performance In the years to come, businesses especially structured around projects have the greatest propensity to hire contractual staff. Contractual staffing will be seen in industries like oil & gas, engineering, pharmaceutical, financial services, and IT, along with demand in bluecollar professions as well.

More are employing contractual workers


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Management excellence awards

SBR recognises firms and individuals leading the pack

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ingapore Business Review honoured nine top business leaders from across several industries in the city-state during its 2nd Management Excellence Awards (MEA) at Shangri-La Hotel held on December 6, 2016. Nominations for MEA were evaluated by an esteemed panel of judges comprising Nexia TS managing director Henry Tan, RHTLaw Taylor Wessing LLP deputy managing partner Azman Jaafar, Mazars managing partner Denis Usher, and Deloitte SEA managing director Jeff Watts. The event, which was attended by over 160 executives, coincided with the magazine’s 3rd Business Rankings Awards (BRA), putting into limelight companies that made it to the SBR industry ranking lists. SBR also recognised exceptional young professionals aged 40 and under from across various fields. Congratulations to all the winners!

WINNERS OF THE Management excellence awards 2016 AND BUSINESS RANKINGS AWARDS 2016

Advertising Moove Media Agriculture ​Panasonic Factory Solutions Asia Pacific - Agriculture Business Division D. Employee Engagement of the Year Business Services Dentsu Aegis Network, Singapore Health Products & Services Farrer Park Hospital Marketing Research Kadence International Banking OCBC Bank - Business Banking Commercial Service Centre Consulting The Nielsen Company (Singapore) Pte Ltd

II. Business Ranking Awards Largest Real Estate Agencies ERA Realty Network Pte Ltd - Rank #1 Orangetee.com Pte Ltd - Rank #4 Largest Accounting Firm

I. Management Excellence Awards

PKF-CAP LLP - Rank #13

A. Executive of the Year

40 and Under Most Influential Lawyers 2016

Food & Beverage Steen Puggaard, 4FINGERS PTE LTD

Kenneth Szeto - Colin Ng & Partner Calvin Liang - Tan Kok Quan Partnership Tom Platts - Stephenson Harwood (Singapore) Alliance Michelle Yong - Stephenson Harwood (Singapore) Alliance Yvonne Tang - Drew & Napier Lim Siau Wen - Drew & Napier Foo Yuet Min - Drew & Napier Scott Clements - Drew & Napier Chan Wei Meng - Drew & Napier Jaikanth Shankar - Drew & Napier Chia Voon Jiet - Drew & Napier Ong Ken Loon - Drew & Napier Benedict Teo - Drew & Napier Charmian Aw - Drew & Napier Tan Shijie - Rodyk & Davidson Joseph Lee - Rodyk & Davidson

Financial Services Ng Beng Tiong, ARA Asset Management Limited Consumer Products (Non-Durables) Dr Andy Adhiwana, Auric Pacific Group Limited Patent Research Deepak Syal, GreyB Services Materials & Construction Industry William Tan Kwang Hwee, Ley Choon Group Holdings Ltd Agriculture Wong Chiak Yeen, Panasonic Factory Solutions Asia Pacific Transportation Desmond Kuek, SMRT Corporation Ltd Consulting Joan Koh, The Nielsen Company (Singapore) Pte Ltd Real Estate Roy Ling, Vingroup JSC B. Innovator of the Year Life Insurance AIA Singapore Team, AIA Singapore Business Services Dr. Patrick Khor, iBosses Pte Ltd Real Estate Steven Tan & Team, OrangeTee.com Pte Ltd C. Team of the Year Oil & Gas MODEC Management Services HR Team 44 SINGAPORE BUSINESS REVIEW | MARCH 2017

Hottest Female Entrepreneurs and Leaders 2016 Peiru Teo - La Belle Couture Masami Sato - B1G1 Louisa Lee - DP Dental Danielle Warner - Expat Insurance 40 and Under Top Entrepreneurs 2016 Justin Fulcher - Ring MD Arthur Brejon - Lazada Singapore Brad Robinson - Ritual Gym Paul Tenney - Ematic Solutions Lawrence Koh- iFly Singapore 40 and Under Hottest Restaurateurs 2016 Dawn Wee and Damien Koh - Joe & Dough Sharma Das - Cato Restaurant 40 and Under Most Influential Business Professors 2016 Jan Ondrus - ESSEC Business School, Asia-Pacific Aarti Ramaswami - ESSEC Business School, Asia-Pacific Onur Boyabatli - Singapore Management University (SMU)


Chiak Yeen Wong of ​Panasonic Factory Solutions Asia Pacific

40 and Under Top Entrepreneurs 2016

40 and Under Most Influential Business Professors 2016

CEO Dr Andy Adhiwana of ​Auric Pacific Group Limited

CEO Jayne Kwek with the Moove Media Team

40 and Under Hottest Restaurateurs 2016

The Nielsen Company (Singapore) Pte Ltd Team

Elaine Tang of Dentsu Aegis Network

SINGAPORE BUSINESS REVIEW | MARCH 2017 45


Eng Kian Lee of PKF-CAP LLP

40 and Under Most Influential Lawyers 2016

VP Fernando Mendoza with MODEC Management Services Pte Ltd Team

CEO Dr Timothy Low of Farrer Park Hospital

Patrick Young of Kadence International

Singapore Business Review Magazine Team

Hong Sen Yong of AIA Singapore

Hottest Female Entrepreneurs and Leaders 2016

Judy Yeo of OCBC Bank


Manfred Seah of SMRT Ltd

Ng Beng Tiong of ARA Asset Management Limited

Steven Tan of OrangeTee.com Pte Ltd

ARA Asset Management Limited Team

CEO Steen Puggaard of 4Fingers

Networking opportunities

William Tan of Ley Choon Group Holdings Ltd

Marcus Chu of ERA Realty Network Pte Ltd

Networking opportunities

SMRT Corporation Ltd Team


EVENT COVERAGE: FUJI XEROX directly-managed business bases in Myanmar (April 2013) and Cambodia (October 2015). In Myanmar, the company reported a fourfold increase in sales from 2013 to 2016, proving that it has succeeded in being a pioneer in these markets. But with more businesses engaging in a digital transformation and launching paperless initiatives, companies such as Fuji Xerox need to keep up with the changing customer preferences. This is why Fuji Xerox has been expanding beyond its printer/copier business and developing its Solutions & Services business since 2008. “Paper usage might be decreasing but it will never disappear,” said Masashi Honda, senior vice president of Fuji Xerox, adding that there will always be a demand for paper media despite the increasing importance of digital. Fuji Xerox Suzuka Center

Fuji Xerox products, solutions backed by “Genko-Itchi” President Hiroshi Kurihara revealed Fuji Xerox’s three-pronged strength as a company in a recently-held media tour in Tokyo, Japan.

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rue to the Japanese culture of passion, precision, and excellence, Fuji Xerox strives to deliver products, solutions, and services founded on a “unity of words and deeds,” or “Genko-Itchi,” as they call it in Japanese. Founded in 1962, Fuji Xerox was established as a joint venture between Rank Xerox Limited and Fuji Photo Film Co., Ltd. With a capital JPY20b (US$176m) and sales revenue of JPY1,183.4b (US$10.4b), Fuji Xerox is one of the major companies in the field of document services and communications. Speaking before the press at the Fuji Xerox Media Tour held in November 2016, president and representative director Hiroshi Kurihara revealed Fuji Xerox’s threepronged strength as a company. First is the company’s ability to carry out business processes. Second is their knowledge of unstructured 48 SINGAPORE BUSINESS REVIEW | MARCH 2017

Hiroshi Kurihara

Katsuhiko Yanagawa

Masashi Honda

data, or data that are exchanged in day-to-day work in miscellaneous forms such as conversations, voice memos, or emails. “Fuji Xerox has been conducting research and development initiatives in the field of natural language processing and knowledge processing. Through these researches, we are developing a technology that converts unstructured data to easy-to-handle data. We are confident to establish a unique position in the market in terms of big data,” said Kurihara. Lastly, Fuji Xerox excels in its ability to gain in-depth knowledge of customer thru direct sales operations. According to Katsuhiko Yanagawa, director and executive vice president at Fuji Xerox, the company is the first to establish direct sales operations in emerging economies in Southeast Asia ahead of its competitors. The company set up a sales subsidiary in Vietnam in May 2010, as well as

State-of-the-art Suzuka Center About four hours away from the hustle and bustle of Tokyo lies the Fuji Xerox Suzuka Center in Suzuka-shi, Mie. Established in 2010, it is one of the four manufacturing sites that the company operates in Japan and employs a total workforce of 1,621 as of January 2016. “We incorporate a resource recycling production system, where we not only collect used products and parts but also assemble parts and products using reusable items, contributing to the establishment of an environmentally sustainable society,” said Masaharu Furukawa, director of Suzuka Center. According to Fuji Xerox, its Integrated Recycling System is composed of three concepts: the central concept is the ‘closedloop system,’ in which postconsumer products are effectively reused as resources; the ‘inverse manufacturing,’ which aims to create products with little environmental impact under the premise that their parts are to be reused; and lastly, the ‘zero emission,’ in which parts that cannot be reused are separated, recycled, and used again as new materials. By Roxanne Primo Uy


Singapore Business Review (February - March 2017)  
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