Karana gets US$1.7M seed funding for its ‘whole plant-based’ meat alternative made from jackfruit; Investors include Henry Soesanto, CEO of Monde Nissin, foodtech fund Germi8, Big Idea Ventures; Karana will also use the funding to launch its plant-based products in restaurants in Asia. More here

Has COVID-19 pushed us into the digital future?; If the pandemic has exposed anything, it is the need to transform the industry “T minus ten minutes” from now; However, the digital transformation we need has to balance between machine intelligence and human imagination. More here

Here is what a bag of popcorn can teach us product pricing; ‘Anchoring’ may be one of the simplest and most powerful tactics you can use in your pricing; It’s about using the human need to make comparisons in order to make supposedly rational and correct decisions; It allows us to hack our customers’ brains, influence their decisions to a certain extent. More here

Zilingo cuts Singapore and global headcount, puts Singapore HQ up for rent; The fashion e-commerce startup has laid off another 11 employees as part of a 12 per cent global cut to its staffing; In April, the Temasek-backed startup had laid off less than 5% of its 796-strong global workforce. More here

Myanmar’s telemedicine startup MyanCare secures US$600K led by SPARX; Japan’s Scala and AIN Holdings co-invested; MyanCare offers MyanCare healthcare app and YinThway paediatric medical call centre service; WHO says Myanmar has one doctor for every 2K patients in urban areas, only one healthcare worker for every 5K patients in rural areas (This article is yet to be published).

Vietnam to commercialise 5G in October; It’s one of the few countries that can produce 5G equipment; The government will facilitate directing local businesses to invest in research and production of the equipment towards commercialising 5G products this year. More here

Singapore tops autonomous vehicles readiness index for the first time; The island state edged out the Netherlands which had ranked first in the past two editions of the index; The ranking reflects Singapore’s leadership in areas of consumer acceptance and policy as well as legislation pillars. More here

How fintech can help reach the unbanked and underbanked in SEA; The region’s 70% of the adult population is either unbanked or underbanked; Integrating blockchain in financial services can significantly enhance access to credit by using alternative sourcing data such as payment transactions. More here

Thailand’s NRF seeks to invest in 100 startups over 2-3 years; This will allow the food distribution major to learn about food innovation and tech; In 2019, NRF invested in 19 startups globally; This year, it has invested in another 12 startups, aiming for 40 by year-end. More here

Indonesia’s Bukalapak turns street sellers (warungs) into banking agents; Users will be able to deposit and withdraw cash at warungs, and conduct transactions such as transfers and payments; About 5M warungs move over US$70B worth goods a year, a quarter of Indonesia’s US$380B retail market; The Ant Group-backed e-tailer is valued at US$2.5B. More here

Thailand Post plans Smart Mailboxes using IoT; It will work with CAT Telecom to produce the mailboxes that can detect when parcels are deposited; By the end of 2021, they aim to install up to 22K smart mailboxes nationwide to cover the increasing needs of customers, especially those in e-commerce and logistics industries. More here

MDIF invests US$750K in Indonesia’s Arkadia; The company owns news portal Suara.com, sports portal Bolatimes.com, ads platform Iklandisini.com; The investment will enable Arkadia to further develop its regional content and networks. More here

A snapshot of the 3 startups graduated form VIISA’s batch 7; The three startups are Ask Locals (traveltech), Medigo (medtech), Gring (employee training); So far, VIISA has accelerated 32 startups over six batches; It is looking to launch batch 8 in August 2020. More here

How early investment in tech pays off when startups expand to other markets; Ohmyhome’s co-founder says investing early in tech allows you to see opportunities to fill gaps in the market; By automating administrative tasks as much as possible, employees will be freed up to do higher-value work.  More here

Korea sets up K-Startup Centre (KSC) in Singapore; It focuses on fintech and cybersecurity; The KSC is supported by ESG and will serve as a launchpad for Korean SMEs and startups to plug into Singapore’s and the region’s innovation ecosystem; ESG also has a partnership with Korea Institute of Startup and Entrepreneurship Development. More here

Japan’s IntegriCulture, Singapore’s Shiok Meats partner to ramp up cell-based seafood production; The two will develop inexpensive cultured serum for growing shrimp meat in the lab; Shiok Meats raised US$3M in a bridge round last month. More here

Mastercard, fintech startup tonik partner to create digital Neo Bank in Philippines; As a mobile-only bank, tonik will be able to develop a highly customised, scalable banking solution; It’s set to launch by Q3 of 2020, with a full range of banking services, including transactional savings account with a debit card, savings, term deposit accounts, consumer loans. More here

Sunway, Celcom, Huawei ink MOU to develop 5G in Sunway City in Malaysia; The collaboration will see the development of smart solutions in the areas of public safety and security, telehealth, e-learning, hospitality, leisure and retail experience using the latest telecom tech; It will also contribute towards achieving sustainable development. More here

Indosat launches digital operation with Ericsson, Huawei; The digital transformation will make the Indonesian telco’s back-end system more sophisticated; The telco reported 56.2M mobile consumers and registered a 7.9% yoy increase in revenue to US$454M in Q2. More here

Philippine government eyes support for e-commerce boom; The country has one of the slowest internet speeds in SEA; Reforms can be done by opening the telco sector through amendments in the foreign investment and public service laws. More here

Thai Tapioca Starch Association’s (TTSA) new president to promote local startups in global arena; It will build network with international startups and work closely together with government and business sectors; TTSA will also team up with Thai SME Association to help SMEs make a smooth transition from traditional business to digital business. More here

Singapore digibank contender picks Tencent’s cloud platform to provide digital banking to SMEs; The collaboration will have a focus on inclusive and green finance and aims to create a regional flagship digital bank; Asia Digital Banking Corporation is a Chinese consortium that includes Shanghai Jifu, JIC Technology Investment; More here

Line looks to influencer commerce in Thailand; The partnership aims to help brands increase their sales during the economic downturn while attracting influencers to the platform; Line recently launched Line Idol as a place where artists and online influencers can connect and engage with their fans by becoming chat friends via official accounts. More here

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At the beginning of this year, the labour market was strong. The Straits Times reported that over the past 10 years, local employment had grown steadily to 80.8 per cent with low unemployment at 3.1 per cent according to the Ministry of Manpower.

Real wages grew by 3.8 per cent over the last five years. If you were a business leader who foresees strong growth for your company, you would be mass hiring like Dyson who sought 2,000 new employees over four years.

As a forward-looking employer, you might have hired for stellar growth in your business. This is especially common if you are involved in promising technology sectors. Then you witnessed an unprecedented 80 per cent drop in revenue in three months.

Don’t worry. You are in good company. Even established companies such as Grab had to retrench five per cent of their workforce, followed by Airbnb with 25 per cent and Singapore’s 3,220 retrenchments in the first quarter of this year alone.

This scenario is more common than you think. If this reflects your situation, you must realise that there must be a better way to deal with all these upheavals. Even if your business is super resilient like Facebook or Microsoft, who can afford to hire more during this period of economic carnage, steps to increase the resilience of your workforce should be accepted by the organisation.

Also Read: In brief: Whole-plant based meat brand Karana raises US$1.7M

Accept the reality of retrenchment

One of the major drivers of employment pain lies in the false belief that economic cycles will last every 10 years. The reality is that while COVID-19 happened slightly over 10 years after the Global Financial crisis of 2008, companies had been forced to retrench due to a variety of factors such as technology disruption, competition, or poor management. There is a significant chance that you have to conduct a responsible retrenchment exercise for your company and cut working ties with cherished employees.

The table showed that despite the worst pandemic since the 1918 Spanish Flu, the first quarter retrenchment was the lowest over the past five years. 2015 was the famous year when Singapore added a net 100 new jobs over perceptions of peak workforce and 2016 saw record retrenchments for middle-aged and highly skilled workers.

Genting Singapore and RWS had to cut their manpower in 2016 over China’s economic slowdown and graft fighting campaign. Hence, this is not the first time where even large companies had to bow to changing macroeconomic conditions. This would not be the last time either. The reasons for retrenchment would be different for each period but volatility is clearly here to stay.

Hire millennials

Millennials grew up in an era where their parents experienced uncertain employment conditions in the 1980s, 1990s and 2000s. If you recall, the major events were the 1984 recession, 1997 Asian Financial Crisis, SARS of 2003, and the Global Financial Crisis of 2008. They have seen their parents join and leave jobs at least three times in their lives as job security eroded steadily over the past three decades.

Also Read: How SSIVIX LAB aims to make a difference in time of global health crisis with a one-stop healthcare app

The majority of millennials are working in full-time jobs now, but they are open to jobs with lesser security such as self-employment and freelancing. They will do it for the sake of more money, recognition, and good co-workers. For millennials, the definition of security lies not in the security of full-time work but in the skillset which they possess. In other words, they value career security over job security.

So, while they might be sad initially to receive your retrenchment letter, they bounce back faster than you imagine. They can always work for someone else or themselves in the meanwhile and you can hire them back when the company gets back on its feet. Ninety-three per cent embraced life-long learning and would probably be glad to take a master’s degree during the break.

Flexible working arrangements

Permalancing might not be familiar with you yet. It involves the combination of freelancers and permanent work assignment. Freelancers focus on doing piecemeal jobs which might not work if you have to continuously brief a person to a piece of recurring job. You would get the operational flexibility to increase and decrease your production capability with permalancers.

Permalancers would typically work with two to three companies at any one time. It would not be devastating for them to lose a client. You might have to pay more for permalancers than employees.

Clearly define work scopes for established positions would be necessary. Established positions are work areas where the work value is defined, requires specialised skills, and could be done in a reasonable set of time. Scope creep is a common blunder for companies, be it with employees or other forms of labour.

For instance, 3E Accounting has a clear work scope even for their interns. They have a structured and consistent process to deliver results. This type of structured process provides permalancers with the confidence to take on regular projects in the long run. Clearly, this would not apply for all companies as some work processes are inherently complex.

Stability in volatility

We live in interesting times. How we organise our ability to contribute to society, be it for monetary or other rewards, would determine our quality and way of life. It is not just about structural skills mismatch but also the arrangement for skills to be applied for goods and services to be created. That arrangement had to provide a level of stability in this volatile environment.

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Trade tensions between the US and China have been the talk of the town since the year 2018. With the two world powers undergoing a lengthy trade dispute, there are unending speculations on the impacts on both nations, and also the probable spillover effects on the Southeast Asian (SEA) countries.

Rumour has it that Vietnam is poised to be one of the biggest winners of all – let us dive a little into it.

According to the Foreign Investment Agency (FIA) of Vietnam, the total newly registered, adjusted and contributed capital of foreign investors have been stagnant since the trade war started, after experiencing a surge of 47 per cent in the year 2017. This is mainly due to the dive in capital inflows for existing projects over the past few years.

On the other hand, a spike can be observed from the year 2018 onwards when it comes to newly registered capital and capital contribution for share purchases – the number of new projects granted has increased by 18 and 27 per cent in years 2018 and 2019, respectively.

Apart from that, the FIA has disclosed that Manufacturing and Processing Industry is the top industry that the capital flows to, accounting for 65 per cent of total foreign direct investment (FDI) and recording a 48 per cent growth in the year 2019.

Also Read: Why is Vietnam going to emerge the strongest post-COVID-19?

This is not surprising since it reinforces the common belief that the US-China trade war is accelerating the pace of businesses relocating their operations elsewhere from China as a diversification strategy.

Vietnam is well known as a rising manufacturing hub in the region, particularly for these top sectors: (1) Electronics sector; and (2) Textile, Garment and Footwear sector.

To name an example of the relocation of operations, Luxshare-ICT, assembler of Apple’s AirPods wireless earphones in Vietnam, has gone on a hiring spree for thousands of new workers in June this year.

Another phenomenon that can be observed that supports the possibility of production moving away from China away to Vietnam is that Vietnam’s share of US apparel imports has benefitted as China’s share in the market is slipping – the country even surpassed China and ranked the top apparel supplier to the US in March and April this year.

Taking a glance at Vietnam’s position in the global value chain for both these sectors, the country primarily engages in mid-stream (lowest value-added) activities – being very dependent on imports of raw materials and only playing the role of manufacturing and assembling products for exports.

Vietnam is also highly reliant on foreign players, backed by the fact that FDI holds 80 per cent of the local market share of the Electronics sector, while 80 per cent of material supply for textile and garment production in the country comes from overseas.

Also Read: Is Vietnam the new golden child of tech startups in SEA?

Undeniably, Vietnam is emerging as an alternative favourite for businesses to set up their supplementary manufacturing facilities due to a number of reasons, mainly to take advantage of the affordable labour costs and free trade agreements (FTAs) that it has to offer.

The recently ratified EU-Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investment Protection Agreement (EVIPA) are the spotlights of all FTAs, helping Vietnam to harness the opportunities arising from the shift of supply chains.

However, the nature of the manufacturing industry in Vietnam poses a potential threat – if the country does not move up in the value chain, other countries in the region such as Thailand or Cambodia might also compete in terms of labour costs.

Despite the government’s efforts to spur investments into hi-tech manufacturing and infrastructure to align further with the global supply chain, only a few multinational companies (MNCs) have limited research and development (R&D) activities in Vietnam, namely Samsung, Renesas Design Vietnam, and the latest one being Qualcomm with its first R&D facility in SEA.

Apart from the above, other considerations include the size of labour pool, availability of skilled workers, capacity to absorb a sudden surge in production demand, and many more. Therefore, it is important for businesses to take a step back and rethink their relocation strategy – given that the country still has a long way to catch up with China’s pace, would it be ultimately more feasible to go for the ‘China-plus-one’ strategy instead?

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Before the dawn of the 21st century, the e-commerce space was largely dominated by American companies. US-based companies such as Amazon and eBay were leading the global e-commerce space and are amongst the most well-known e-commerce sites in the world.

However, in the last two decades, their leadership position appears to be challenged by their Asian counterparts.

In the early 2000s, Alibaba.com, a Chinese tech company under the leadership of Jack Ma revolutionised online cross-border business-to-business (B2B) transactions, allowing buyers across the world to easily discover and acquire affordable Chinese made products.

Soon, other business-to-consumer (B2C) focussed Chinese marketplaces such as JD.com, Tmall, Taobao, and Pinduoduo also started to emerge, this time enabling millions of consumers globally to browse and purchase affordably priced, quality products from furniture to consumer electronics.

As a result, eMarketer reported that in 2018, Taobao and Tmall, which are part of the Alibaba Group, were generating a total Gross Merchandise Value (GMV) of US$515 billion and US$432 million respectively. This number far exceeded Amazon’s GMV of US$344 billion.

Also Read: Why humanising e-commerce will be the game changer for DTC brands

In another example, Amazon Prime Day 2019, which is Amazon’s biggest annual shopping event, generated a whopping US$5.8 billion in sales. However, this was only a fraction of Alibaba’s Singles Day 2019 event for the same year, which generated a sales volume of US$38 billion, which was six times larger in comparison.

So how did Chinese e-commerce companies leapfrog other global giants to become the undisputed leader in e-commerce globally?

China’s massive consumer market

Unknown to most, Chinese e-commerce growth is largely locally driven as a result of the explosive growth of affluent and internet savvy Chinese consumers. In fact, the International Trade Administration estimated that China alone accounts for over 50 per cent of all global online transactions.

China has been a notable economic miracle this past half-century.  Since it started to open its economy to the world in 1978, its GDP has on average grew by 10 per cent per annum and lifted more than 850 million of its 1.4 billion population from poverty.

This has created an entire segment of nouveau rich middle class, with high disposable income and a vast appetite to acquire various luxuries from around the world. According to the World Economic Forum, the proportion of Chinese consumers making cross border e-commerce transactions had doubled from 34 per cent in 2015 to about 67 per cent in 2017.

Also Read: B2B e-commerce in Asia is increasingly successful. Here’s what we can learn from them

As China leads the way in e-commerce globally, it becomes important for both major consumer brands and technology companies around the world, eager to participate in this ever-growing tech-savvy Chinese market to be aware of some of the emerging online shopping trends.

Here are some key observations to prepare for:

The growing dominance of mobile payment and mobile shopping

Over the past decade, there has been widespread adoption of mobile payment methods and the prevalence of mobile shopping, to the point where it’s now the default mode of transaction across the country. In fact, according to JP Morgan, almost three out of every four e-commerce transactions in China are carried out on a mobile phone, generating over US$873 billion in sales annually.

In addition, the sheer monopolistic prevalence of mobile payments such as Alipay and WeChat pay has made the country almost entirely cashless. According to PwC, Mobile payment methods are so prevalent in China that they account for about 85 per cent of all online payments in China.

Furthermore, the rise of “super-apps” such as WeChat has integrated mobile shopping into the daily life of many Chinese residents. They provide users with an integrated, comprehensive suite of services from messaging, shopping, lifestyle, entertainment, and payment.

The rise of influencer online marketing

As a precaution against counterfeit products, which was unfortunately common in the past, Chinese consumers are heavily reliant on online reviews to guide their purchases.

As a result, consumers have grown to rely on digital influencers, live stream videos, and online articles to learn about the latest trends, popular products and to ascertain if they can trust a particular product or brand.

Online marketplaces such as Tmall and JD.com have thus invested heavily in enabling good product review capabilities and also driven a trend towards live steam online shopping events.

Also Read: DTC and native: Is it the perfect e-commerce partnership?

Furthermore, many of the live streaming sessions provide interesting content that engages consumers while steering them towards a purchase. In fact, live stream shopping events are so popular that in 2018, Alibaba’s Taobao Marketplace generated more than US$15.1 billion in gross merchandise volume (GMV) through live streaming sessions, an increase of almost 400 per cent year-on-year.

Emergence of the inverted O2O strategy

Traditionally, O2O (offline to online) refers to brick-and-mortar stores expanding their business sales channels to online spaces. However, in China, another form of O2O is emerging, which is from online to offline where Chinese online giants are starting to open physical stores, interacting with the same customers on both fronts.

This has completely redefined customer experience and has integrated technology and data in a far more pervasive way.

For example, in Herma Supermarkets (owned by Alibaba Group), customers can buy, dine, and order products straight from the shelf like a regular supermarket.

Also Read: Top 10 predictions for China cross-border e-commerce in 2019

However, shoppers can easily scan the products with their mobile phones to receive more information (e.g. pricing and product specifications) and pay for them directly through Alipay, a mobile payment method. Customers can also indicate on the spot collection or have the products delivered straight to their homes.

The omni-channel retail strategy has greatly increased convenience and improved shopping experiences for consumers, making it a popular retail strategy in China. McKinsey estimated that about 85 per cent of shoppers in China have engaged with both online and offline touchpoints during their purchase journey.

The longevity of Chinese marketplace dominance

China’s success over the e-commerce space is largely attributed to its massive domestic markets. In other global markets such as North America and Europe, Amazon still has a secure footing. However, China’s e-commerce companies are in no rush to invest heavily beyond its borders to claim world dominance.

There is still significant room for growth within China’s borders with the growing affluence of consumers and digital savviness in third and fourth-tier cities.

The next few decades belong to the Chinese, as they slowly expand their foothold overseas. Is China the emerging global e-commerce leader? I think that there is definitely clarity in that question.

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