Why Singapore firms can and should still look at expanding abroad amid Covid-19
It may seem counterintuitive to talk about expanding overseas when local businesses are grappling with the pandemic, but for the many firms we supported in venturing abroad in 2020, it seems there is no better time.
The pandemic has led to certain constraints, especially on cross-border travel, but it has also given rise to new ways of doing business. And support for internationalisation, whether from the government or industry partners, is as present as ever.
That being said, we know internationalisation may still seem daunting. We debunk five common myths that may be holding you back from seizing new business opportunities beyond our shores.
Myth #1: Firefight first, expand overseas later
Fact: Even in 2020, some 1,600 companies still joined hands with Enterprise Singapore to explore overseas opportunities and grow their market presence.
And interest could stay strong. About one in two Singapore firms are immediately investing in expansion overseas despite the pandemic, according to a HSBC survey of over 200 businesses released last December1.
Companies are seeking out new pockets of opportunities as well as access to new partners and suppliers, to stay ahead of the competition.
Myth #2: Internationalisation is only for the big boys
Fact: Size – and by extension, the resources the company has – can matter. But it has not prevented small and mid-sized enterprises (SMEs) like Peranakan food brand HarriAnns from venturing abroad, even during the pandemic.
HarriAnns, which has six outlets in Singapore, made its first leap overseas in January this year. It partnered a hotel chain to provide its cookies in countries the hotel chain operates in, gaining access to multiple markets in Asia including Thailand and the Philippines.
Meanwhile, preschool operator MindChamps has expanded rapidly both locally and overseas since starting out with a single preschool centre in 2008. It partnered institutions with a regional or global presence to enter new markets, and used a franchise model to create recurring revenue streams and scale quickly. Today, MindChamps has over 80 centres globally.
First-to-market players stand to potentially gain a higher market share advantage over later entrants. Enter a market early to establish your brand and build customer loyalty
Myth #3: Travel is a must to check out potential partners and set up shop
Fact: Not necessarily, if you ask education solutions provider LittleLives. The firm now takes an average of just two online meetings to close a deal.
For instance, LittleLives recently secured a contract for its school management system to be used by a preschool chain in Dubai. All product demonstrations and negotiations were conducted completely online.
For retailers, the shift towards online shopping amid the pandemic has also paved the way for them to break into new markets without having to set foot there.
As early as June last year, more than 500 local enterprises had been able to access new markets through e-commerce platforms under the Government’s Grow Digital scheme2.
Get a headstart in going global through Grow Digital, an initiative that connects Singapore SMEs with pre-approved e-commerce platforms and digital solution providers. You can grow your brand’s reach beyond Singapore by simply leveraging the networks of these partners.
Myth #4: If this worked in Singapore, it should work as well anywhere else
Fact: Within regions, even Southeast Asia or the rest of Asia itself, consumer preferences and cultures can differ greatly. It’s commonly cited as why ride-hailing startup Grab succeeded in the region, while its competitor, Uber, failed.
Enterprise Singapore also offers on-the-ground assistance and support to local businesses overseas, such as providing market insights and facilitating connections.
Myth #5: Internationalisation is expensive and resource intensive
Fact: It can be. However, various forms of financial and non-financial assistance are available, from government schemes to programmes and networks offered by trade associations & chambers (TACs).
Support under certain schemes, like the Market Readiness Assistance (MRA) Grant, has also been increased for this period. The MRA grant currently provides up to 80% funding support to firms looking to internationalise, while the latter provides a 200% tax deduction on eligible expenses for international market expansion and investment development activities.
The GlobalConnect@SBF programme offers access to industry knowledge, training programmes and in-market networks to help you scale your business across Southeast Asia.
If you’re looking at expanding to China, consider engaging the Singapore Enterprise Centres in Shanghai and Chengdu. Operated by the Singapore Chinese Chamber of Commerce & Industry, these one-stop business centres can help you further grow your footprint in Asia’s largest economy.
Ready to take that first step abroad?
If you are looking for an easy way to start, try our Internationalisation Toolkit, which assesses your company’s readiness to expand overseas, suggests resources or programmes tailored to your business needs and offers clear guidance on the next steps.