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Speech by Minister Iswaran at the Consumer Goods Forum Global Summit 2018

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KEYNOTE ADDRESS BY MINISTER S. ISWARAN, TITLED ‘PREPARING FOR A DIGITAL WORLD’, AT THE CONSUMER GOODS FORUM GLOBAL SUMMIT 2018 ON WEDNESDAY, 13 JUNE 2018, 2PM, AT MARINA BAY SANDS EXPO AND CONVENTION CENTRE

Mr Peter Freedman, Managing Director of the Consumer Goods Forum,

The Global Summit Committee,

The Singapore Summit Taskforce,

Distinguished Ladies and Gentlemen, 

Opening

1. I am pleased to join you this afternoon at the Consumer Goods Forum Global Summit 2018, here in Singapore. 

2. We meet today at a time of great uncertainty in the global trade environment.  The rhetoric and actions against trade and economic integration have sharpened of late.  This adverse trajectory poses a serious challenge to the global economy and its growth prospects.  Now more than ever, nations who are committed to free trade and open markets, must come together to offer a constructive alternative by forging new pathways for closer economic partnership.      

3. Against this backdrop, Southeast Asia (SEA) remains a bright spot.  Through our sustained economic integration efforts, the region has seen steady progress over the last five decades.  ASEAN’s GDP has grown hundredfold from US$23 billion in 1967 to more than US$2.5 trillion in 2016.  This strong growth is expected to continue through both traditional and digital channels.

4. The region’s internet economy was estimated to be worth US$50 billion in 2017, and is projected to quadruple to US$200 billion by 2025.  The drivers of this growth are 600 million consumers with a median age below 30, who could potentially leapfrog the technology evolution curve and directly adopt smartphones and e-commerce as a way of life. 

Leveraging Technology to Serve Fragmented Markets and Diverse Demands

5. Southeast Asia is a fast-growing but also diverse market, in terms of its cultures and business practices.  Conventional methods would require a significant investment of resources (in terms of time, market research, and manpower) to access such a varied market.  However, technology can play a catalytic and enabling role in introducing new goods and services, as well as different models of customer engagement that are tailored to local needs.

6. One good example is our home-grown classifieds marketplace Carousell.  While printed classified ads have moved onto the internet since the turn of the century, Carousell adopted a different approach – mobile classified ads – when it first launched in 2012.  This aptly tapped the preferred engagement modality of consumers in SEA, where mobile accounted for 72% of the overall e-commerce web traffic in 2017. 

7. Carousell is now present in eight markets across the Asia Pacific and hosts 144 million listings across a wide variety of categories.  Its success to-date has helped it secure S$113 million in Series C funding recently, which the company will be using to invest in AI and machine learning capabilities, to better serve its customers. 

8. Notwithstanding the growth of e-commerce and mobile-commerce (m-commerce), traditional commerce still accounts for almost 70% of fast-moving consumer goods sales in the region’s major cities. 

9. Indonesian startup, Warung Pintar, saw an opportunity with this, and used technology to redesign an existing product to meet the modern needs of the local market.  The company helps street vendors upgrade their kiosk with a range of tech devices such as a digital point-of-sale (POS) system, free Wi-Fi router and power bank chargers.  Not surprisingly, these upgraded kiosks quickly gained popularity amongst private hire drivers and the local community.  As a result, the first kiosk vendor’s revenue grew five-fold within just a few months.  

10. Singapore too recognises the important and transformative role of technology and that is why we have committed to become a Smart Nation by 2025.  We have invested in digital infrastructure and connectivity to complement our talent pool, conducive business environment and strong Intellectual Property framework, in order to better serve local and foreign companies in adopting new solutions and seizing opportunities in the digital economy. 

11. Besides establishing a local presence, companies can also use Singapore as a launchpad to navigate the diverse consumer landscape in this region.  This is evident from the 70 global consumer and retail companies that have established their regional headquarters in Singapore in the last 20 years, including the likes of e-commerce giants who have done so recently.  In 2017, Amazon launched its Prime and Prime Now services, while Alibaba took a controlling stake in Lazada, a US$3 billion unicorn that is headquartered in Singapore. 

Partnerships for Innovation and Transformation for Retail

12. Innovation has been and will remain a cornerstone of Singapore’s economic development strategies.  On the other hand, industry transformation also requires strong partnerships between all stakeholders in each industry.  That is why both innovation and partnership were key strategies emphasised by the Committee on the Future Economy.  With this in mind, we have sought to drive innovation and transformation for retail and other sectors through various partnerships.  

13. First, we launched 23 Industry Transformation Maps (ITMs).  These are industry-specific growth and competitiveness plans that are supported by the four pillars of Innovation, Productivity, Jobs & Skills, and Trade & Internationalisation.  The Retail ITM, for example, encourages retailers and malls to adopt innovative technologies, like in-store analytics and augmented reality customer interfaces, to improve back-of-house productivity and front-of-house store experience for shoppers. 

14. One such retailer that has successfully utilised innovative retail technologies to transform their customer’s retail experience is Commune.  Founded in 2011, Commune is a local furniture design business.  The company’s 3D floor planner and virtual reality simulation at their Defu Lane Experience Centre allows customers to recreate their home environment and visualise how Commune’s furniture will fit in their homes.  This has enhanced their customers’ retail experience and provided greater assurance, which the company believes will help to drive sales. 

15. Second, our economic agencies have pursued new partnerships with the academic community and industry to raise the productivity and innovation levels of retailers.  The Retail Centre of Excellence (RCoE) is one such joint initiative.  With the support of then-SPRING Singapore (now ESG), the Economic Development Board (EDB) and the Singapore Management University (SMU), as well as the deep expertise and rich experience of its Founding Members, the centre aims to collaborate with retailers, retail experts and knowledge partners to empower retailers in Singapore and the region, through the sharing of knowledge, insights and learning points. 

16. Lastly, the Infocomm Media Development Authority (IMDA) and Enterprise Singapore are working closely with the industry to create digital solutions to help traditional Small and Medium Enterprise (SME) retailers participate in the digital economy.  For example, retailers can leverage on the Productivity Solutions Grant and IMDA’s pre-approved digital solutions, under the SME Go Digital initiative, to digitalise their business and improve their operational efficiency.  Retail store Robinsons was a beneficiary who tapped on this initiative.  Instead of having to deal with 200 SME suppliers manually through a range of physical and electronic channels, Robinsons integrated all 200 suppliers on a common e-procurement platform, which has allowed them to improve their sales planning and inventory management.  

Working with employers and unions to upskill our workers and ensure they are future-ready

17. As we transform our economy, we must also continue to invest in our people and equip them with the requisite skills to stay relevant in the digital world.  One way we are doing so is by partnering employers, industry associations and unions to develop and implement Skills Frameworks for our workers so that they are future-ready.  Specifically, the Skills Framework seeks to provide a common understanding of the key existing and emerging skills required, facilitates skills recognition by employers and supports the design of industry-relevant training programmes that could be readily applied at work.  In addition, it contains key information on career pathways in the specific industry.

18. For example, the Skills Framework for the Retail industry identified mobile application marketing, social media management and data analytics as the skills in demand today.  The framework also highlighted the potential vertical and lateral career progression options for workers in the sector.  For example, a Wine Waiter in Food and Beverage (F&B) industry can either choose vertical career progression to become a Wine Specialist and eventually a Sommelier, or progress horizontally to become a Service Supervisor of an F&B retail space and eventually an Outlet Manager.  This allows individuals already in or wanting to enter the industry to more actively plan and evaluate their own career pathways to build an enriching career for themselves.

Closing

19. In closing, I would re-emphasise the significant opportunities that are available in South-East Asia arising from market growth, technology trends and evolving consumer preferences.  I hope this event will spark greater interest in addressing these market opportunities by embracing data and technology to drive innovation and improve existing business processes in the consumer business sectors.  I congratulate the Consumer Goods Forum on the successful organisation of this year’s Global Summit in Singapore and I wish you all a fruitful time at the summit. 
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DATE PUBLISHED 14 Jun 2018
LAST UPDATED 14 Jun 2018
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