Singapore firms attracted by China's vast market, fast recovery from Covid-19 pandemic

Even with the pandemic, Enterprise Singapore said it helped some 20 companies to expand to China for the first time last year. PHOTO: AFP

BEIJING - Sales at Changi Airport used to be a big part of health supplement brand NutriLife's business, but customers have dwindled following Covid-19 travel restrictions.

Izone Marketing, the company behind the brand, then decided to speed up its growth plans to make up for the fall in sales. It opened two e-stores amid the pandemic last year to target the Chinese market.

"We wanted to reach more customers," said business development manager Sarah Tan.

Even with the pandemic, Enterprise Singapore (ESG) said it has helped some 20 companies, including Izone Marketing, to expand to China for the first time last year.

ESG, which helps Singapore companies expand abroad, said it had a hand in 120 projects in China last year, a drop of 30 per cent from a year ago. The figure includes new entrants to China and expansions by firms already in China that sought ESG's help.

Mr Wong Choo Sin, ESG's global markets director for China, said that restrictions and quarantine requirements needed for international travel have made it difficult for companies to expand abroad. But some continued to persist, he added.

China's huge market and its recovering economy were key reasons that firms cited for their decision to take that first step into the world's second-largest economy.

China's economy grew by a record 18.3 per cent in the first three months this year, compared with the same period last year. In 2020, China's economy grew 2.3 per cent, from a year ago, making it the only major economy to post an expansion amid the Covid-19 pandemic.

Tetsuyu Healthcare co-founder and managing director Ng Li Lian said that the rising number of diabetic patients in China made it a good market to scale its business.

China is home to about a fourth of the world's diabetic patients, according to the International Diabetes Federation.

Data in 2019 showed that about 116.4 million adults in China have diabetes, out of about 463 million adults globally.

Tetsuyu runs Cares4wounds, a wound-care imaging, assessment and management system.

Tetsuyu Healthcare co-founder and managing director Ng Li Lian. ST PHOTO: CAROLINE CHIA

Izone Marketing's Ms Tan said that the pandemic had made it more crucial for the company to accelerate the expansion of its e-commerce business.

It first opened a store on WeChat, China's most popular social media platform, to sell NutriLife products in August last year before starting another store on Tmall, China's largest online marketplace for retail customers, that was launched in April this year.

It had planned to wait at least a year to monitor NutriLife's sales on its WeChat store before expanding to Tmall but decided to cut the wait short.

"There was definitely some hesitation... In the end, we decided to forge ahead," she said, citing reasons such as China's booming e-commerce market and its fast recovery from Covid-19.

Izone Marketing had also secured an Enterprise Development Grant from ESG for its expansion.

The grant supports companies' projects that tap overseas markets and encourages companies to improve their work processes, among other areas.

It is capped at 80 per cent of the project's cost. The ceiling will be lowered to 70 per cent, starting from April 1 next year.

Izone Marketing did not disclose the amount it received when asked.

Mr Rayvan Ho (left), founder and chief executive of Acktec Technologies opened an office in Beijing amid the pandemic last year, with the help of his business partner, Mr Xu Zhonghua. ST PHOTO: AW CHENG WEI

China's unique system of Internet controls was the reason for Acktec Technologies to expand to Beijing last year.

"China's Internet is not compatible with most other countries, so if I wanted to build an e-platform for workers in China, I needed to learn how to do it within China," chief executive and founder Rayvan Ho told The Straits Times in Beijing last month.

Mr Ho's edutech firm uses advanced technology such as virtual reality to create learning products, targeting mostly adult learners. In Singapore, Mr Ho has worked with transport and insurance companies and schools to develop training material.

Expanding to China had always been part of his plan.

Companies told ST that having partners in China helped them expand despite travel restrictions that prevented frequent flying. As the Chinese authorities made regulations more transparent and more specific, that also helped businesses' confidence in tackling the massive market.

ESG's Mr Wong said that partnerships remained crucial, especially when trips are less frequent amid a pandemic.

Kinofy Group, which offers digital business solutions to firms new to China, is working on a pilot project with property giant CapitaLand, Singapore Tourism Board and ESG to help Singapore companies build their brands here. Currently, 18 companies are on board.

The project, which taps aspiring Chinese influencers to promote Singapore brands, thus marketing products by word of mouth, will give participating companies a taste of what it is like to try and stand out from competitors in China, said Kinofy founder Paul Chong.

Kinofy founder Paul Chong. PHOTO: KINOFY GROUP

New business partners in China are also helping Tetsuyu navigate the laws in the healthcare industry and find more ways to distribute Cares4wounds. China has also introduced new guidelines to standardise wound care, which has helped the company, said Ms Ng.

Acktec's Mr Ho said his business partner, Mr Xu Zhonghua, sourced an office and built the team in Beijing while he waited for Mr Ho to fly to China. Mr Ho had met Mr Xu, a former employee at a state-owned enterprise, during a business trip to China a few years ago.

Mr Ho, who had just returned to Beijing after a work trip to various Chinese cities, said: "The expansion has been smooth so far. We are now looking to expand again, maybe somewhere in the south. We have some customers there, and another office there will help serve them better."

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