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Thinking of starting a business? Here are some pandemic-ready opportunities
You are now reading:
Thinking of starting a business? Here are some pandemic-ready opportunities
The pandemic has devastated economies globally, forcing many businesses to close down. Micro, small, and medium enterprises in Asia Pacific immediately suffered significant drops in revenue and disruptions to operations.
Singapore businesses were not spared, and continue to face serious challenges. But the nation state’s business sector is proving resilient. In fact, more businesses were established than shuttered over the last two years, according to Minister of State for Trade and Industry Low Yen Ling: every month, more than 5,000 firms on average were registered, compared to about 3,840 that were deregistered.
The past two years also saw the rise in popularity of businesses harnessing digital technologies, and sticky new consumer habits may help sustain this growth. In Southeast Asia, sectors like e-commerce, online media (advertising, gaming, music, and video on demand), food delivery, financial services, healthtech, and edtech led 2020’s massive Internet economy growth, based on research by Google, Temasek, and Bain & Company.
Why it’s a good idea: The pandemic rapidly accelerated e-commerce adoption in Asia. With limited mobility, people looked for ways to do their everyday activities virtually, including shopping.
According to the SYNC Southeast Asia report by Facebook and Bain & Company, 2020 saw over 70 million Southeast Asians become digital consumers for the first time ever—equivalent to the population of the United Kingdom.
What’s more, the region now accounts for over 50% of global e-commerce sales, according to research by NielsenIQ. In Singapore, 47% more households shopped online in 2020 than in 2019. Shopping frequency also increased by 11%, and spending grew by 16%.
What to look out for: Because of its popularity, expect a lot of competition from anyone. Aside from online-only stores, brick-and-mortar establishments are also taking advantage of digital channels to widen their reach and ensure their survival.
So what can you do? Stand out. Step up your marketing game, offer a stellar customer experience, and deliver an omnichannel experience across platforms. If you already have a product in mind, try this
Instant Product Evaluator Tool to see how “sellable” it will be.
Why it’s a good idea: As more people experience the impact of climate change and share information online, they are becoming aware of the importance of environmental, social, and governance (ESG) issues.
Now, a 2021 survey by World Wide Fund for Nature (WWF) Singapore and Accenture found that sustainability sways customers’ purchase decisions, with 35% saying they are willing to pay 10% more for sustainable products. Singapore’s Green Plan 2030 also highlights how sustainability will be a key area of focus for government and businesses in the coming decade.
Entrepreneurs looking to launch products and services focused on sustainability will find plenty of growth opportunities. For instance, Singapore-based software startup Handprint is helping businesses directly support positive climate action by making it easier to contribute to these causes. Also, to take care of both Earth and personal health, some may choose to purchase sustainable activewear from Singaporean brands, like Outfyt and YOF Athletica.
What to look out for: If you’re building a business around sustainability and well-being, make sure it’s genuine and true to the values of caring for humanity and the environment. Keep an eye to comply with sustainable reporting standards relevant to your industry and country while measuring positive impact. Today’s eco-conscious consumers and groups are not afraid to call out brands found guilty of greenwashing.
For tips on how your business can avoid these pitfalls, here’s a
Guide Against Greenwashing.
Why it’s a good idea: Food delivery services were already common in much of Asia, but social distancing measures and circuit breakers further increased adoption. Many restaurants looked to tech—in the form of apps and other online food delivery platforms—to get around mobility restrictions. Food and beverage (F&B) businesses will likely continue to offer delivery services post-pandemic as off-premise dining offers an alternative source of revenue.
For others, sharing kitchens with other food establishments to cut costs made perfect sense. Accelerated by the pandemic, cloud kitchens emerged as a new business model.
This new model allows firms to operate more cost-efficiently and to expand their reach quickly. Cloud kitchen users range from online-only F&B companies, as well as brick-and-mortar restaurants sharing kitchens with other restaurants.
F&B groups, such as Singapore-based Select Group and tech food delivery service GrabFood, are investing heavily in cloud kitchens to serve restaurant startups, virtual-only brands, or restaurants looking to scale while optimising costs. These give smaller food merchants a chance to try out the cloud kitchen model.
For instance, GrabKitchen, the tech company’s first cloud kitchen, houses 10 merchants, including bubble tea brand Playmade and restaurant Thai Dynasty. Orchard Food Market, a cloud kitchen run by Smart City Kitchens, hosts homegrown brands like Wolf Burgers, Wing Zone, and Sove.
Within the F&B space, plant-based “meatless meat” is also a promising niche, as interest in “conscious consumption” rose in Singapore in 2020, and demand for plant-based meat is growing. Eat Just, producer of lab-grown chicken meat, received regulatory approval in Singapore in 2020. Another F&B brand, Next Gen, started supplying plant-based chicken products to local restaurants.
What to look out for: Since this is a relatively new business model, there are a lot of unknowns. For one, you may be saving money by sharing kitchen space with others, but you’ll also need to take into account additional third-party fulfilment costs and revenues that are limited by a delivery-only model, cautions Yeoh Mei Ling of Enterprise Singapore.
Why it’s a good idea: With almost everything going digital, many individuals and organisations need help transitioning to the digital world seamlessly.
For example, if you’re an experienced professional with extensive knowledge of remote work best practices, you can consider offering consulting or corporate training services. You can also turn your attention to other in-demand corporate training topics, such as managing digital transformation, design thinking, and leadership in the digital era.
Moreover, business-to-business services can be brought right to your customers’ home offices. While consulting and training are traditionally conducted face-to-face, you can also consider a virtual mode of delivery or a hybrid. Singapore-based corporate training firm Anagram Group, for instance, pivoted to online training and webinars when the pandemic hit.
Digital marketing services are also essential in today’s business landscape, especially in the e-commerce-focused world of Asian retail. In Singapore, 52% of shoppers surveyed by Reprise Digital and Google in the first half of 2021 say they visit brand websites to gather more information about a brand or a product before making a purchase. Omni-channel sales, marketing, and communication solutions that improve customer experience will be in greater demand.
What to look out for: Remember, clients on the hunt for these services experience real pain points and expect service providers to deliver professionally and consistently in ambiguous environments. To gauge your competitive advantage, assess your experience, skills, network, and ability to transform. Stay on the lookout for new tools and insights available online. In the corporate services industry, having a credible reputation is key to long-term success. You’ll need to make sure you have what it takes to make your clients happy.
Starting a new business venture in 2022 may seem like an incredibly risky thing to do, but there are two things to keep in mind: entrepreneurship will always entail calculated risk-taking, and history tells us that it’s quite common for economic booms to follow
great moments of upheaval.
Still, it helps to be mindful of the risk-to-reward ratio. Once you’ve decided to pursue a new business opportunity, it’s time to get your digital armoury ready.
1. Stand out from competitors by innovating your business model
For starters, you’ll need to stand out from competitors who are going after your target segment. Co-authors Jonathan Byrnes and John Wass suggest innovating your business model to engage your customers better. In a Harvard Business Review article, they write about two ways to develop a high-profit business model: you can either grow your customer value or reduce your cost to serve. You can always do both, they say, but you should consider the need to transition from broad-based targeting to segment-specific targeting.
2. Strengthen your digital presence
To lower the cost to serve more customers, you need to craft a strong digital strategy as it opens up additional channels of communication and transaction. Businesses that have learned to maintain their presence in the virtual realm are more likely to find success as consumers, wallets, and payments go digital.
3. Implement SEO
Next, identify and implement search engine optimisation (SEO) best practices. Customers need to be able to find you online when they’re looking for solutions to their problems. Offering relevant information is one thing, but making it discoverable to your target audience is an endeavour worth investing in.
4. Make data-driven decisions and craft strategies
If available, use data analytics to make smarter strategies. Over time, this can grow your customer value with segment-specific offerings, and reduce your cost to serve with scale. With online channels available, such as social media or digital payment solutions, businesses can have a wealth of data at their fingertips, from demographics to browsing behaviour to spending habits. Use this information to understand your customers, make decisions, and craft new strategies.
If you’ve been dreaming about jumping into entrepreneurship, don’t let Covid stop you. It won’t be easy, but there are ways to manage the risks and multiply the rewards, especially if you are equipped with the right tools and information to guide you.
For digital and financial solutions to get your business up and running, reach out to us at UOB.