Speech by Minister S Iswaran, Minister for Trade and Industry (Industry) at the 2016 ACI Asia Business Summit "Future World of Asian Consumers"

​SPEECH BY GUEST OF HONOUR MINISTER S ISWARAN, MINISTER FOR TRADE AND INDUSTRY (INDUSTRY) AT THE 2016 ACI ASIA BUSINESS SUMMIT “FUTURE WORLDS OF ASIAN CONSUMERS” ON 10 OCTOBER 2016 AT 10:30AM

Distinguished Guests,
Ladies and Gentlemen,

Good morning. 

Opening remarks

1. I am pleased to join you today for the 2016 Asia Business Summit, organised by the Institute on Asian Consumer Insight (ACI).

2. Regional and global leaders from diverse industry sectors converge at the Asia Business Summit to exchange insights and build connections. In particular, this forum aims to help multinational corporations (MNCs) and local enterprises acquire a deeper and more nuanced understanding of Asian markets in order to benefit from the growing market opportunities in the region.  

Asia is a region of growth opportunities, and Singapore remains an important gateway for companies expanding into Asia

Growth opportunities in Asia

3. The current global economic climate is marked by tepid growth and uncertainty.  Against this backdrop, Asia remains an important engine of the global economy, accounting for almost two-thirds of global growth in 2016.  Asia’s growth is expected to remain strong at 5.3% in 2016 and 2017, surpassing the global forecast of 3.1% in 2016 and 3.4% in 2017. 

4. Hence, Asia will continue to be a significant source of growth for companies.  Asia’s rising middle class will account for two-thirds of the global middle class population by 2030.  With higher disposable incomes, Asian consumers are demanding more sophisticated goods and services.  There are also distinct regional and city-level variations in consumer patterns, especially in the larger economies.  

5. Key trends in Asian consumer demand also offer new opportunities for companies. For example: 

a. E-commerce. Asian consumers are leapfrogging mature markets in the adoption of technology, bypassing personal computers and going straight   to smart phones and mobile platforms.  The total number of Internet users in Southeast Asia alone is expected to grow from 260 million in 2015 to 480 million by 2020. It will allow companies to engage consumers, current and potential, through multiple channels.

b. Health & Wellness. There is also heightened awareness of health and wellness, particularly in urban Asia with its growing population.  Asia is projected to be the fastest-growing market for organic food and beverages globally, with an estimated Compound Annual Growth Rate (“CAGR”) of 28.5% from 2014 to 2020.  It is an opportune window for businesses to meet the demand for healthy, natural products among Asian consumers.  

Singapore as an important gateway to Asia

6. Amidst these developments, Singapore serves as an important gateway to Asia for MNCs and local enterprises.  Companies see value in our location, connectivity, conducive business environment, research and innovation capabilities, and strong talent base. For instance, Givaudan established its fragrance creative centre and production hub in Singapore last year.  The Singapore centre harnesses consumer insights in the design and creation of scents for Asian consumers, and will be the base to grow Givaudan’s Asian fine fragrance business.  Another example is Philips’ Asia Pacific Centre in Singapore, which I had the pleasure of officially opening in May this year.  Philips’ Asia Pacific Centre will provide digital healthcare services in partnership with healthcare stakeholders in the region.  

7. Asia has always been a focus of Singapore’s trade and investment efforts, and we will continue to strengthen this.  For example, under the Committee on the Future Economy (CFE), Singapore is exploring strategies to deepen linkages to key Asian growth markets including ASEAN, China and India. 

The Institute on Asian Consumer Insight (ACI) is an important partner to companies that wish to capitalise on the growth opportunities in Asia

8. The Institute on Asian Consumer Insight (ACI) plays an important part in this effort. Established by Nanyang Technological University in 2011, it can help businesses develop a deeper understanding of Asian consumers, including the changing mindsets, cultural practices, buying behaviours, and emerging needs and aspirations of diverse groups of Asian consumers.

9. Since inception, ACI has evolved to become a thought leader in Pan-Asian consumer insights, developing education programmes, knowledge-sharing platforms and industry collaborations.  In particular, I am pleased that the ACI has been actively supporting companies in the areas of innovation, internationalisation and talent development.

Innovation

10. ACI is developing deep research capabilities in key areas driving consumer behaviour, such as digitalisation, health, wellness and nutrition.  Companies will be able to tap on these capabilities to develop innovative products and services targeted at the Asian consumer. 

11. To date, ACI has established numerous research collaborations with industry partners.  For example, it has involved a wide range of companies including Blackberry, DBS Bank and Unilever in their multi-market study on the psychological make-up of Asian consumers.  The institute has also helped companies develop innovative products through these research partnerships – for example, the ACI worked with Essilor to design a new lens for Asian consumers, informed by insights on the consumers’ reading habits and physiology. 

Internationalisation

12. ACI is also working with government agencies to encourage local Small and Medium Enterprises (SMEs) to adopt consumer insights in their innovation and internationalisation strategies. For example, in 2015, the institute partnered SPRING Singapore to carry out a Food Manufacturing Innovation Workshop for participants from over 20 local SMEs. The workshop raised awareness of market insights as a strategic asset for product innovation, and developed an understanding of regional and cultural differences in Asian food consumption habits to bolster market expansion strategies. 

Talent development

13. Talents with global and regional market expertise, as well as multi-disciplinary skillsets, are essential for the successful growth of companies.  ACI’s Master of Science programme and executive education programmes will support companies in the development of industry-ready talent, by training professionals to translate Asian consumer insights into innovation and growth outcomes. 

14. With these and other efforts, I am confident that the ACI will continue to be a valuable partner to companies as they seek to capture growth opportunities in Asia. 

The government will continue to support the growth of our companies through innovation, internationalisation and talent development.

15. ACI’s activities complement the government’s efforts to strengthen corporate capabilities for the future.  In particular, ACI’s focus on innovation, internationalisation and the development of global-ready talent, are all important themes for both the Committee on Future Economy (CFE) and the Industry Transformation Maps (ITMs), which were announced in Budget 2016.

16. Innovation.  The government will continue to invest in the innovation capacity of our firms, institutions and people.  Under the Research, Innovation & Enterprise 2020 (RIE2020) plan, the government will invest S$19 billion, or about 1% of our GDP, over the next 5 years to strengthen Singapore as a global R&D hub.

17. Internationalisation. To achieve the scale necessary to compete, it is important for our companies to internationalise and tap into markets beyond our borders. Hence, the government will continue to support enterprises across all sectors to access regional and global markets, by deepening our linkages to key growth markets. 

18. Talent development. Given the fast evolving economic landscape, Singaporeans must master and refresh industry-relevant skillsets and experiences throughout their lives.  Under the national SkillsFuture initiative, the government will continue to support individuals in acquiring the necessary skillsets to enable them to take on good jobs of the future. 

19. It is also incumbent upon companies to play their part by taking active steps to strengthen their capabilities and competitiveness.  Some of our SMEs are already doing so and reaping the benefits.  

• Chinatown Food Corporation Pte Ltd. Chinatown Food Corporation manufactures oriental and non-oriental foods that are sold on ecommerce platforms in both local and overseas markets.  The company has embarked on several initiatives to improve its operations. It has invested in high-technology equipment and automated systems in its product development.  The company has also participated in government training programmes.  For example, it took in a SkillsFuture Earn & Learn Programme (ELP) graduate Ms Tan Kailin Calyn, who graduated from Temasek Polytechnic before doing the Advanced Diploma in Food Technology at Singapore Polytechnic.  She is currently supporting the company’s efforts in product innovation. One of the new products that she helped to develop is a lava sesame ball, which is currently retailing online and will soon be sold in local supermarkets.  

• Luvenus Jewellery. Luvenus retails gold and diamond jewellery. It has three outlets in Singapore, including Changi Airport. In August this year, the company launched its first overseas outlet at the Hong Kong International Airport. This will strengthen its travel retail brand amongst overseas consumers, and the company aims to expand through franchises in Brunei, Indonesia, Hong Kong and India over the next few years.

Conclusion

20. The Asia Business Summit is a good platform for companies to learn from the experience of others and share insights on evolving consumer trends as well as corporate capability-building strategies, to help them seize the growth opportunities in the region. I understand this year’s Asia Business Summit will include panel discussions on the themes I have touched on, including trends affecting Asian consumer demand, and strategies for companies to internationalise. 

21. I wish everyone fruitful and productive discussions over the course of the programme.  Thank you.

​

​​