The Big Read in short: Back on their old stomping grounds overseas, S'pore firms need to find their way again

SINGAPORE — As the Covid-19 crisis waned, Mr Michael Teo decided sometime last year to ramp up operations in Malaysia again for his company EduCareerSG, which matches jobseekers with firms in Singapore that are willing to offer employment and sponsor their education.  

But he met with an unexpected business foe: Job scams, which had proliferated during the Covid-19 years amid employment anxieties as entire sectors in various countries got upended. 

Cases of Malaysians being lured by lucrative job offers that turned out to be scams had grabbed headlines during the pandemic, with victims finding themselves held captive in neighbouring countries and being forced to work for crime syndicates.

Such cases have made the general population in Malaysia cautious of employment offers from overseas companies — and EduCareerSG became an indirect victim of people's wariness, said Mr Teo.

“We faced a lot of scepticism, and they were doubtful if we were really (offering jobs) from Singapore,” said Mr Teo, who co-founded EduCareerSG in February 2018. He added that this also made it more challenging to attract the right talent for his clients. 

While some challenges like that faced by EduCareerSG came from the left field, other companies that spoke to TODAY highlighted issues such as rising operational costs, manpower crunch and customers' evolving preferences in their key markets.

WHY IT MATTERS

While lessons learnt by Singapore companies from the pandemic days — including the importance of maintaining a resilient supply chain — should not be forgotten, they cannot be the main factors underpinning business decisions today, said business analysts and industry players. 

Enterprise Singapore (EnterpriseSG) chairman Peter Ong said in February that while it was understandable for companies to be cautious amid uncertainties, it should not result in them “simply standing still”.

“Instead, I urge companies to boldly pursue growth and to keep transforming. Both to make up for the lost Covid-19 years, and also to gain early advantage in areas where they can be competitive,” he said during the annual year-in-review briefing for EnterpriseSG, which is the government agency championing enterprise development. 

But as many Singapore companies have realised, returning to their old overseas stomping grounds is not as straightforward as it seems. 

These firms need a new post-Covid playbook or risk undoing the gains they had previously made in their international forays. 

THE BIG PICTURE

Examples of challenges faced by Singapore companies returning to various overseas markets are:

• Manpower crunch

Mr Khoo Kia Tiong, chief operating officer of suits retailer Benjamin Barker, acknowledged that manpower is “a challenge”, without going into details.

However, he said that the brand, with its 14 stores locally and seven overseas in Australia, Cambodia, Malaysia and Vietnam, manages this issue by offering “attractive commission schemes” to its staff.

• Supply chain disruptions

For another Singapore company Modellscape, an events firm specialising in fabrication setups for corporate trade shows, pandemic-related travel restrictions had posed logistical challenges in Saudi Arabia, one of its key markets, and Shanghai, where the firm has an office and a fabrication facility.

Its managing director, Mr Yam Chau Wang, said that at that time the firm faced pressure “to eliminate our dependence on sources that are unstable, for example our usual supply chain from China and Singapore”.

This prompted them to set up a presence in the Middle Eastern kingdom in October last year which allowed for local procurement.

“Though the cost is higher, it improves our efficiency and real time responses to our clients which in turn leads to having more opportunities for us,” he said.

• Rising operating costs

Extra Space Asia has presence in South Korea, Taiwan and Malaysia, as well as “in land-scarce places such as Hong Kong and Singapore (where) property prices are always on the high side,” said its chief executive officer, Mr Kenneth Worsdale.

With property prices “at an all-time high” in today’s climate, it has become “more challenging to purchase or rent a property”, he added. 

THE BOTTOMLINE

According to Enterprise SG, there are many opportunities that Singapore companies can seize globally in three types of markets: Mainstay markets, markets with specific focus, and emerging markets.

These opportunities may arise from trends and emerging areas such as growing digitalisation and the green economy, as well as the reopening of key markets such as China.

The agency as well as business experts advise firms to relook how they approach their overseas markets, in order to better tackle challenges that has become more acute in the post-Covid world and to capitalise on new opportunities.

These may include diversifying talent sources to grapple with manpower crunch, finding new ways to penetrate international markets to avoid being cut off by middlemen, and banding together with other Singapore companies to collectively provide more value to the desired market.

The experts and business analysts also suggested banking on the Singapore brand, which may prove advantageous in a world increasingly fraught with geopolitical tensions.

Singapore’s reputation is “arguably more valuable than before, as it is viewed as a friendly jurisdiction by firms in many developed countries as well as developing ones”, said Assistant Professor Terence Fan from the Singapore Management University.