SBF UnConference on Internationalisation
Singapore companies cite financing as the No. 1 challenge to expand share in existing markets
- Finding reliable local business partners was the key challenge for market entry
- Collaboration with larger enterprises was cited as a strategy to facilitate market entry
- 84% see Asian markets as their most important market with some 58.4% earmarking ASEAN for future growth
6 August 2014 [Singapore] - The Singapore Business Federation (SBF) conducted an un-conference on internationalisation last week to gauge members’ challenges and success in venturing overseas. It was attended by some 150 company representatives - made up of SMEs and large enterprises with annual turnover of over S$100 million.
Sharing on Successful Overseas Market Accesses
A lively dialogue session on internationalisation moderated by Victor Tay, Chief Operating Officer of SBF, featured prominent members of the business community - Seah Moon Ming, ED and Group CEO, Pavilion Energy; Douglas Foo, Chairman, Sakae Holdings; Ambassador Shabbir Hassanbhai, Director Indo Straits Trading; and Lau Tai San, Chairman & MD, Kim Ann Engineering.
Mr Seah, also Vice President of SBF China Business Group shared the critical factors for successful market penetration. He commented that businesses should emphasize on relationship with Government and Strategic Partners when engaging a new market and CEOs should personally invest in these relationships to ensure smooth business operations.
While 58.4% of companies highlighted ASEAN as the key market for future growth potential, some 7.8% of companies earmarked Africa as their focus. Mr Shabbir Hassanbhai highlighted that Africa, comprising of 54 countries is a continent of possibilities for long-term investment. He shared that the 1.1 billion population and the large young middle-class consumers make it one of the promising markets in the world.
Issues and Drivers behind Singapore Enterprises
Another highlight of the un-conference was a participants' poll on internationalisation to uncover issues and drivers behind Singapore enterprises and the global trends which matter.
Of the participants polled, 48% possessed more than 10 years of experience operating or venturing overseas and some 50% derived their annual turnover from overseas markets. The remaining 18% of the companies operate in Singapore as the only market.
Some 80.4% of companies cited growing revenue streams (40.2%), developing overseas business potential for future growth (26.4%) and increase global market share (13.8%) as the top 3 reasons for increasing international activities.
Assistance and Programmes needed by Participants
24.7% of participants polled cited availability of financing as the top challenge in expanding their share of business in existing markets. They indicated that tax incentives like Double Tax Deduction programmes were less effective to their needs. Whereas finding reliable local business partners was the No. 1 challenge for market entry. Other challenges posed to companies include low brand acceptance, manpower challenges, restrictions on investment and foreign ownership, trade barriers or non-tariff measures, intense market competition, favouritism show on local companies, uncompetitive pricing and low margins.
Some 19.4% preferred M&A support for international acquisitions, while 34.7% of participants cited collaboration with larger enterprises as an important strategy to facilitate market entry. Aligning to the business needs, Victor Tay shared that moving forward, SBF will be establishing a programme to consciously match-make companies and form consortium amongst larger enterprises and small businesses for successful forays into overseas market.
In terms of market interest, Asia (83%), and in particular ASEAN (58.4%), emerged top of the list of businesses as an important growth market. 45% of companies however experience difficulty in finding business partners - a key barrier faced when entering a new market.
SBF CEO Mr Ho Meng Kit said, "Over the years SBF has inked some 150 MOUs with over 60 overseas business chambers and government agencies. We have led numerous business missions to Asia, Africa, the Middle East, Europe and the Americas and have received hundreds of visiting business and official delegations from all over the world. We urge businesses to tap on SBF's network of overseas contacts to leverage trade opportunities and private and public sector projects. Through the various global business divisions, companies can seek new business opportunities by participating in trade missions and exhibitions organised on a regular basis."