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Speech by SMS Chee Hong Tat at the opening ceremony of Franchising and Licensing Asia 2019

Speech by SMS Chee Hong Tat at the opening ceremony of Franchising and Licensing Asia 2019

President, Franchising and Licensing Association, Mr. Andrew Khoo,

Immediate Past President, Mr. Robert Leong

Distinguished Guests,

Ladies and Gentlemen,

INTRODUCTION

1. It is my pleasure to join you here today at the opening ceremony of Franchising and Licensing Asia 2019.

a. For years, FLAsia has played a key role in promoting entrepreneurship, creating business opportunities and protecting intellectual property in Asia.

b. Bringing together the franchise community, the franchise family and a plethora of established and promising brands around the world, FLAsia has been an important platform for brands to grow their businesses and expand into Asia Pacific.

c. Hosting this event in Singapore also allows all these different brands to dip their toes in the country’s cosmopolitan cultural mix before they decide whether to expand further into the rest of Asia. 

2. I am glad that FLAsia is back for its 14th  annual run amidst rising global uncertainties.

 

GLOBAL ECONOMIC CLIMATE

3. We live in a time of transition and turbulence today, shaped by geopolitical events, many of which are beyond our control.

a. These events – the ongoing US-China trade war, escalation of the protests in Hong Kong, and possibility of a “no-deal” Brexit – all these collectively weaken global investor and consumer confidence, thereby impacting global trade and economic growth.

b. Are countries affected? Definitely. Singapore has been affected, our neighbours have been affected. This trade war benefits no one. All these uncertainty, overall, has a negative impact on the global economy. That is why the IMF has repeatedly lowered its forecast for global economic growth.

c. Indeed, the business optimism index has fallen to a two-year low for the fourth quarter of 2019[1] and we expect to face strong economic headwinds in the foreseeable future but it does not mean that we need to be overly pessimistic.

4. Despite the challenging global geopolitical climate, there are still reasons for us to remain optimistic about opportunities and economic prospects in this region.

a. Asia, including Southeast Asia, remains one of the world’s fastest growing regions and is poised to become a global engine of growth in the coming decades.

b. ASEAN is on track to become the fourth largest market by 2030 with a rapidly expanding middle class and tremendous business potential[2]. As income goes up, purchasing power will increase. People will look for new ways to spend and all these provide opportunities for businesses.

c. India, too, is set to become the world’s third largest consumer market by 2025[3] and its consuming class[4] will more than triple to almost 90 million households. By 2030, Mumbai’s economy alone will match Singapore’s national GDP today.[5]

d. Indeed, as I travel to countries in the region and speak to our entrepreneurs both here and abroad, many are bullish and optimistic about the growth of their businesses in Singapore and the region.

5. Against this backdrop of a rapidly growing Asia, Singapore can serve as a gateway for entrepreneurs to tap on exciting growth opportunities in this region.

a. I am therefore heartened to see more than 197 brands from over 15 countries around the world showcasing their products and services today.

EXPANDING OVERSEAS THROUGH FRANCHISING AND LICENSING

6. In times of crisis, there can also be opportunities.  The key is how we seize these opportunities.

7. Franchising and licensing are effective means for brand owners to expand overseas, tap into the region’s growth, and diversify their revenue base.

a. Take for instance, Speech Academy Asia. 

b. One of the 2018 winners of the “Franchisor of the Year” award, Speech Academy Asia was founded in 2012 with a mission to equip children with public speaking skills – dovetailing with the Ministry of Education’s efforts to develop critical soft skills.

c. Sensing strong interest from investors and also a potential to internationalise, they seized the opportunity and ventured into franchising to grow its presence in region.

d. Today, the brand is present in 3 countries with a total of 9 franchises – proving that Southeast Asia presents plenty of opportunities for SMEs to find success in their internationalisation journey.

8. Another example of a success story in franchising is Seoul Garden, a Korean-Asian buffet that was founded in 1983 in Singapore and has grown into a household brand.

a. Even though it is a mature and well-established brand, Seoul Garden has never been afraid to continuously innovate and re-invent itself.

b. In 2004, the company decided to venture abroad and began its overseas franchise journey.

c. Owing to this spirit of innovation and hunger for success, this traditional Singapore brand has successfully established a presence in 8 out of the 10 ASEAN countries, with almost 90 overseas outlets – more than 10 times the number of outlets in Singapore.

9. Speech Academy Asia and Seoul Garden come from different sectors but are examples of how success in internationalisation and franchising depends not on your company’s size or sector – but on whether you are seeking out new opportunities and whether you are constantly re-inventing yourself.

GOVERNMENT’S ROLE IN CATALYSING INTERNATIONALISATION

10. We recognise that expanding your business overseas is not an easy journey, and there are risks involved, which is why the Government will do our part to help Singapore companies build capabilities and tap on overseas opportunities.

a. Last month, President Halimah Yacob launched Singaporium in Manila. That was the first pop-up of a series that Enterprise Singapore is organising to help our local companies expand to new markets.  

b. Through these pop-ups, Singapore retail and food companies will have the opportunity to expand brand visibility and test overseas markets’ receptivity to their offerings.

c. I recently visited the “Taste of Singapore” pop-up in Tokyo where 15 food companies showcased their ingredients and products to the Japanese market. I am happy to know that we expect to help 60 local companies reach about 2.8 million overseas customers in the Philippines, Japan, Thailand and Indonesia through this effort. 

11. The Franchising and Licensing Association (FLA) has also introduced “The Franchise Competency Framework”, the first of its kind in Asia, to help local brands internationalise.

a. Supported by the Local Enterprise and Association Development  programme (LEAD) under Enterprise Singapore, FLA’s competency framework aims to assist local companies in developing and improving their franchising and licensing strategy.

b. The Association, in collaboration with a group of certified franchise consultants, will help to certify companies and recommend them for the appropriate quality mark. This quality mark is important, especially for customers who are not familiar with your brands and products. This gives them some assurance and confidence, and that is why I think the Singapore brand name is important. It is also something we have to continue to guard and protect. I urge all our business leaders to uphold this strong Singapore brand, this strong Singapore reputation. It is for our collective good, and it is our competitive advantage when we go overseas.

12. Enterprise Singapore will continue to work and support Singapore companies and work with organisations like FLA as well as the trade associations and chambers to help companies capture growth opportunities. 

a. It is not just about what you make in Singapore. We recognise that Singapore’s market size is not as big, and growth rate is not as rapid as some of the markets in the region. We have to think about strategies to help our companies think beyond ‘Made in Singapore’. 

b. The other is ‘Made by Singapore’. In other words, you are a Singapore company but you operate overseas, manufacture overseas but you have a Singapore trusted brand name, ‘Made by Singapore’. 

c. With franchising and other partnership ideas, you are also moving to a third dimension, which is ‘Made with Singapore’. You bring a well-established Singapore brand overseas to the right partners and work with them. 

d. These three dimensions, ‘Made in Singapore’, ‘Made by Singapore’ and ‘Made with Singapore’ can help provide the strategies to help our companies to look for more growth opportunities. 

CONCLUSION

13. In today’s challenging global economic landscape, it is important that we continue to seek out opportunities beyond our waters.

a. Franchising and licensing is one way and an important way to help our companies capture opportunities overseas. It can help our companies to scale up more quickly, compared to companies doing everything on their own. In this way, companies can also grow their businesses, and diversify their revenue streams.

b. To this end, the Government remains committed to supporting companies in their journey to expand their presence internationally.

14. I would like to thank FLA and BizLink for your continuous efforts in promoting franchising and licensing as a means of helping companies internationalise.

15. Thank you for inviting me today and I wish you all the best as you embark on your franchising efforts.


[1] Source: The Straits Time – “Singapore business confidence hits near 2-year low in Q4”

[2] Source: US-ASEAN Business Council – Investing in ASEAN 2013-2014 Report

[3] Source: Boston Consulting Group – The New Indian: The Many Facets of a Changing Consumer

[4] Coined by McKinsey’s Global Institute. A household is part of the “consuming class” if their annual household income is more than USD 31,000 or S$43,000

[5] Source: McKinsey Global Institute Report – India’s ascent: Five opportunities for growth and transformation

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