The COVID-19 pandemic caused major economic disruption worldwide. Many startups in Southeast Asia that struggled in 2020 are now beginning to find their footing once again. In fact, recent report findings from CPA Australia has revealed that Singapore startups retain a stronger position than most of their ASEAN counterparts.
How were Singaporean businesses able to pull through and come out on top? Government assistance paired with a shifted focus towards online sales both proved beneficial in keeping the country’s small businesses afloat. Many are optimistic about the future, and their success stories can help create a roadmap that other startups in the region can follow.
The Singapore government is extending more support for startups as part of their new budget
Key findings
According to the CPA Australia’s 2020-21 Asia-Pacific Small Business Survey, Singapore’s small businesses are the most resilient in Southeast Asia.
Conducted with 4227 participants, including 307 from Singapore, the findings show that 55% of the island’s small businesses stated that the pandemic negatively affected them. However, this was significantly lower than in Malaysia (67%), Indonesia (68%) and Vietnam (81%), demonstrating that the nation’s businesses felt less of an impact than its nearest neighbours.
The secret to Singapore’s resilience
The rapid digitalisation of Singapore’s companies seems to have added to their resilience, with 75% saying they earned revenue online and 57.3% making more than 10% of their income from online sales.
Additionally, many small businesses increased their social media presence which played a vital role in contributing to sales during the pandemic. In 2020, 84.6% of Singapore businesses used social media compared to just 71.2% in 2019.
Another part of this move towards embracing a digital approach included implementing digital payment methods like PayPal, Alipay, or WeChat Pay. According to the survey, 84.8% adopted new digital payment technologies in 2020, up from 69.8% during the previous year.
Aside from going down the digital route, another contributing factor to Singapore’s post-pandemic recovery was government assistance. Government support had a positive influence on their stability, according to 29% of the country’s small businesses in 2020, with 27% seeking government support as a response to COVID-19. Several government initiatives sought to help boost companies shifting towards digital platforms, and as a result, 42.8% of small businesses found accessing finance in 2020 easy compared to 29.2% in 2019.
Digital transformation success stories
Focusing on the numbers is essential, but it is equally important to take a closer look at the businesses which those numbers represent and their strategies, for not only surviving the pandemic but thriving despite the economic struggles it imposed.
One such example is the cashback platform Shopback. This Singaporean startup, launched in 2014, has benefited significantly from the explosion of online shopping during the pandemic. From April to June 2020, the platform added 500 new retailers, expanding its list of 4,000 brands. “In the first half of this year, we have driven slightly under $1 billion in sales for our merchants,” their CEO Henry Chan said.
Another Singapore-based startup to capitalise on the opportunities presented during the pandemic is digital transformation company Webpuppies. Global corporations rely on the firm for consultancy and cutting-edge solutions, so it thrived in 2020 as more firms embraced digitalisation. The company’s CEO, Abhii Dabas, said in an interview with startup.info, “The pandemic has accelerated digital transformation by 3 to 5 years. We have worked very hard to build formidable development teams across countries. We have also focused on technology consultancy and providing remote tech teams to our clients. When the pandemic hit, every medium to the large company was scrambling to digitize and automate their processes, and we were very well-placed to assist them.”
Looking towards the future
Despite the hardships of 2020, many companies in Singapore remain optimistic about the future and are increasingly likely to digitise. Since innovative companies are significantly more likely to grow, this should have an overall positive effect. The CPA Australia report shows that 18.6% of businesses are willing to introduce a new product, process, or service unique to their market in 2021, compared to 13.4% in 2020 and 13.9% in 2019. Around 53% of small businesses in the country say they are optimistic about their growth prospects in 2021 compared to other countries like Hong Kong (21.2%), Australia (41.4%), and New Zealand (44%).
In the face of a global pandemic, Singapore startups have proved that they have what it takes to survive and thrive. With the help of digital transformation and government backing, Singapore businesses survived 2020 with hopes for a better economy and more innovations in 2021. Looking at success stories like Shopback, Webpuppies, and others can show more startups in Southeast Asia that it is possible to thrive in a post-pandemic world.