Start Singapore : Singapore '10th best place in the world for start-ups'

(Above, from left) Carousell co-founders Lucas Ngoo, Quek Siu Rui and Marcus Tan, and Zalora's pop-up store (below) in Ion Orchard in 2014. Research by Bain & Co showed that e-commerce in South-east Asia is facing an extreme polarisation between sophistic
(Above, from left) Carousell co-founders Lucas Ngoo, Quek Siu Rui and Marcus Tan, and Zalora's pop-up store in Ion Orchard in 2014. Research by Bain & Co showed that e-commerce in South-east Asia is facing an extreme polarisation between sophisticated, digitally savvy shoppers in urban centres and an emerging wave of consumers outside the top cities. PHOTOS: ST FILE, ZALORA
Carousell co-founders Lucas Ngoo, Quek Siu Rui and Marcus Tan, and Zalora's pop-up store (above) in Ion Orchard in 2014. Research by Bain & Co showed that e-commerce in South-east Asia is facing an extreme polarisation between sophisticated, digitally sav
Carousell co-founders Lucas Ngoo, Quek Siu Rui and Marcus Tan, and Zalora's pop-up store (above) in Ion Orchard in 2014. Research by Bain & Co showed that e-commerce in South-east Asia is facing an extreme polarisation between sophisticated, digitally savvy shoppers in urban centres and an emerging wave of consumers outside the top cities. PHOTOS: ST FILE, ZALORA

Two reports published last month could help policymakers, entrepreneurs and investors decide on the factors to develop a start-up ecosystem or help digital entrants expand their operations, while other research points to ways in which companies can join forces with new-tech outfits to improve innovation.

Singapore '10th best place in the world for start-ups'

Singapore has shot up seven places to rank as the 10th best place in the world for start-ups to do business, according to research firm Compass.

In a recent report, it noted that government funding support here, the ease of doing business and the presence of a South-east Asian regional market all combined to lift Singapore's rating since the 2012 league table.

Bangalore, which was ranked 15th, was the only other Asian city that made the top 20. Silicon Valley topped the league table, with Montreal at No. 20.

The higher a city is ranked, the more well developed is its start-up ecosystem, which would attract more investors and entrepreneurs.

The index takes into account funding activity, the number of start-ups and their valuations and market reach, as well as the quality, availability and cost of tech talent. The Compass findings were based on interviews and data collected from entrepreneurs and investors.

Singapore received high marks for market reach as 49 per cent of customers of the start-ups here are overseas - the highest proportion in the Asia-Pacific region. The top target markets are the US, China and Indonesia.

However, tech talent is Singapore's biggest bottleneck. The amount of time it takes to hire an engineer here is 17 per cent more than in Silicon Valley, and salaries are higher than in the rest of the Asia-Pacific region.


Online shopping market in S-E Asia hits $8.4b

The South-east Asian e-commerce market hit US$6 billion (S$8.4 billion) in turnover last year and is expected to grow sharply this year, thanks to a growing class of non-urban consumers who are discovering online shopping on their mobile phones.

However, policymakers urging Singapore e-commerce start-ups to go regional should pause to read Clearing The Digital Haze, a report from management firm Bain & Co.

It noted that e-commerce in South-east Asia is facing an extreme polarisation between sophisticated, digitally savvy shoppers in urban centres and an emerging wave of consumers located outside the top cities.

The latter group can now afford to buy mobile phones as prices have dropped to US$50 and below, allowing them to access the Internet for the first time and discover online shopping.

Mr Florian Hoppe, partner of Bain & Co, told The Straits Times: "So this group of consumers are getting very active but behaving differently.

"For example, they pay usually with cash, and their goods are also delivered differently - not by the international couriers but by taxis or bikers - quite unlike urban customers, who pay by credit cards and whose goods are usually delivered by international couriers."

So to crack this growing market, Singapore's e-commerce players must understand the online shopping behaviour displayed by this group of consumers, from the items they like to their preferred payment and delivery methods.

Bain's research also showed that apart from Singapore-based Lazada and Zalora, e-commerce sites here like Carousell and Reebonz have negligible or no presence in South-east Asian markets.

It is the indigenous e-commerce players that are thriving.

Mudah, a Malaysian e-commerce site, has more than 20 per cent of the country's online market, selling a wide variety of goods, from electronics and home appliances to cars and sporting goods.

The situation is similar in other South-east Asian countries.


Big firms 'should partner start-ups to innovate'

Big businesses have to start paying attention to start-ups if they want to innovate and remain relevant, said a report from European business school Insead.

It found that 68 per cent of the top 100 companies on the Fortune Global 500 list are already engaging with start-ups.

The report highlighted DBS Bank, which is working with start-ups. It noted that DBS supplements its talent development programme with three-day hacking challenges, where staff are paired with start-ups to build mobile solutions addressing banking challenges.

Last year, about 800 employees took part in various programmes, including hackathons and start-up bootcamps called accelerators.

The report advised businesses embarking on corporate start-up engagement to take baby steps.

They could hold "demo days" where selected start-ups pitch their business ideas to investors for funding, or corporate executives could go on study trips to visit fast-growing start-ups in other cities.

Alternatively, businesses could also set up start-up bootcamps to allow them to see entrepreneurs working on new innovations without having to invest a lot.

Grace Chng


•Send news on start-up development to chngkeg@sph.com.sg

A version of this article appeared in the print edition of The Straits Times on February 11, 2016, with the headline 'StartSingapore'. Print Edition | Subscribe