Speech by Minister Chan Chun Sing at the 27th Singapore Retail Industry Conference and Exhibition

SPEECH BY MINISTER CHAN CHUN SING AT 27th SINGAPORE RETAIL INDUSTRY CONFERENCE AND EXHIBITION AT SUNTEC CITY CONVENTION CENTRE ON 5 SEPTEMBER 2018, WEDNESDAY, 9.25AM

1.            Good morning everyone. We all know that in the next few years, if it has not already happened, your sector will face great disruptions. Today, we have 140,000 workers in the retail industry in Singapore. Even if it moves by 10 per cent, there are 14,000 workers who may be displaced, have to find new jobs, and acquire new skills in order to take care of themselves and their families. So it i​​s not a simple matter and it is not something that we take lightly.

2.            The question then is what can we do together. I am sure that all of you will agree with me that in the retail world, life is not just tough, life has always been tough because we can never compete on the size of our market and hopefully we will never need to compete on the basis of price. So unlike other bigger markets where people can compete on price, or on the size of the market, we have to think about how we can distinguish ourselves in the very crowded retail scene not just in Singapore, but beyond Singapore, and increasingly in the cyber space where there are no more borders and there is no more geographical insulation to the concept of retail.

3.            Today, our competitors are not the shops down the street in the next mall. Our competitors are worldwide. If we look at it pessimistically, then we say that life is tough because competition now has intensified. But if we look at it positively, this is also our opportunity to transcend the limitation of our local companies. Technology is neutral. All these things that we will be speaking on relating to technology at the conference today, that is neutral. Whoever masters it wins. And this actually frees up Singapore’s constraints of size and geography.

4.            I met a group of similar audience in a similar room and in this building. It was a group of 400 accountants. I asked them - In five years’ time, do you think you will have higher pay and better jobs? 200 of them said no, life is going to be tough. The other 200 said life will be great. That was rather interesting. I asked them what was the reason? The 200 of them who said that life will be tougher and the 200 of them who said life will be better all came up with the same reason – technology. The 200 of them who said life will be tougher said that because they were accountants, the accountants outside Singapore would be able to take away their jobs without even coming to Singapore. The 200 of them who said that life would be better said that because of technology, they could then go out and serve customers across the border without even having a physical presence there. So which group was correct? Both of them were correct. Technology is neutral. Whoever can master it and whoever can provide that level of service and have adjacent services wins. For those who just depend on the traditional model of providing very basic accountancy services, which can be replaced by a robot or the super excel sheet, will be eliminated. Therefore, this same story applies to the retail industry as well.

5.            Many of you have leveraged the digital space to go overseas to explore new markets, and you have grown steadily. But yet there are others who are struggling because they are constrained by the size of the local market.

6.            If we cannot compete on the basis of price and size, we then need to compete on the basis of our connections, quality and brand. We need connections to the rest of the world to expand our market beyond the Singapore market. Quality of assurance; quality of our products; quality of our innovation in order for us not to compete on price, but to compete on quality, creativity, and so forth. And we compete together as Brand Singapore.

7.            Two weeks ago, I launched YumSing! in the food industry. I asked them how are they doing in the international markets. They said that they were doing not too badly and that they have come together in the food industry to use the little red lion logo. This little red lion logo commands a premium because in many markets in Asia where the growing middle class is demanding more and better quality products, the little red lion speaks of quality, assurance and safety. They are coming together with the brand called ‘Tasty Singapore’. They are working together to generate the collective brand consciousness. And because of that, they have found new ways to break out of the local market.

8.            This is why today, I am also very happy to see the efforts of Singapore Retailers Association (SRA) and Textile and Fashion Federation (TAFF). I am very happy to see TAFF is taking charge of the incubator – Design Orchard. This will be an incubator to bring about the best design and the most innovative ideas to showcase what Singapore can offer. We need not be confined to competing on the basis of our size or price, but we compete on the basis of the quality of our ideas, and we sell our brand of assurance to all beyond Singapore and in Singapore. So thank you to TAFF for taking ownership. Enterprise Singapore (ESG), which is part of the Ministry of Trade and Industry (MTI) family, is proud to partner you in this, because you have shown the way in how we want to brand our Singapore products to help people come together, incubate their ideas, and go forward.

9.            So that is the first part that we need to collectively come together to brand ourselves and help each other to have the equivalent of the little red lion that says that this is Brand Singapore. It speaks of quality, assurance and innovation.

10.         But having done that, there are two other areas that MTI would like to work together with you. I like the backdrop on stage here. It says a lot about the digital world and the connection between the physical world and the digital world. But that is all conceptual. It can only come about if our workers and managers are equipped with the skillsets to conquer new frontiers. So this is the second part of the work that we need to do very urgently.

11.         How do we retrain our workers, equip them with the new skillsets to exploit these market opportunities? We mentioned just now that there are 140,000 workers in Singapore. If 10% of them move to the e-commerce space, we will need to retrain quite a substantial number of Singaporean workers in these new skillsets. But I will not start with the workers first. I would suggest that we start with the managers first, because when the managers seize the opportunities and they move and change their model of working, the workers will quickly and very cleverly follow. But these are all new skillsets that we need to acquire.

12.         Those of you who have participated in China’s Singles’ Day, the 11th of November, know that one day of sales is equivalent to three months of sales in Singapore in your respective companies. For some of you, it may be even more. But how do we seize these opportunities unless we have new competencies amongst our managers and workers.

13.         Beyond putting up a nice portal for e-commerce, we must also rework our supply chains. This excludes music and books that you can e-consume, the rest still need fulfilment. And SRA needs to work closely with the various supply chains to ensure that as we reach out to new markets, we can fulfil the demands of the new markets. The last thing we want is to send the brand everywhere and when the demand comes in, we cannot meet it. Therefore, the reskilling of our workers and managers are most important. When I was in NTUC, we never started with going to the union to tell the workers to retrain. We started off by getting the SMEs to identify new opportunities, and they go back and tell their bosses about the need to change. Therefore, conferences like this is important because it helps our people, including our managers and leaders, to understand the opportunities and take leadership in what they need to do.

14.         Last but not least, MTI would like to work closely with the Trade Associations and Chambers (TACs) to build up the real capabilities for the respective TACs. MTI and its agencies can only establish the macro economic framework to create an enabling environment. But MTI cannot be the agency to know which subsector or which line of work we should invest more; invest less or to shift resources. That is where we need to partner the TACs, because it is you, whether it is SRA or TAFF, who is most equipped to bring to share your market knowledge on how we should apply the policy levers to bring about success for the retail industry. Without your participation, we will still be operating on the highest level of policy formulation without closing the gap on what the ground needs. So my promise to you is that MTI will work closely with SRA and TAFF to ensure that we build up your capabilities, because we want to help each and every retailer in Singapore through your organisations, and we will see how best we can support you.

15.         So on that note, I am not a pessimist, I am also not an optimist, I am just a realist. I know the challenges that many of you face. We are in this together with you. We will do what we can to support you. If Design Orchard is a pilot project that works, we will see how we can scale it up to brand Singapore. If digital capabilities are new skillsets that are required, we will see how best to support all of you so that we can grow this together.

16.         Ultimately, we must always remember that we never compete on the basis of our size or price, we want to compete on the quality of our ideas, and the brand assurance that we can give to the market collectively as Brand Singapore. This is so that when people see a Brand Singapore product, it speaks to them of a product that they can trust, is safe and innovative. On that note, I wish you the very best on your onward journey, if there is anything that MTI can be of help to you, let us know, and we will work on it together.

17.         Thank you very much.