With digital trade further accelerating in Southeast Asia, Singapore’s geographical advantage primes it to be the region’s e-commerce hub. The country’s revenue in the e-commerce market is projected to reach over US$7 billion this year, and the number of users is expected to amount to 4.1 million by 2022 as well, according to Deloitte.

On top of this, simplified COVID-19 measures and major easing rules have also contributed to brick-and-mortar sales. Retail sales increased 12.1 per cent in April year on year, largely attributable to higher tourist spending, and this positive trend is expected to continue as Singapore moves closer to normalcy.

As local retail industries, both online and offline, experience exponential growth, the storage sector must also evolve to support this trend. Beyond conventional storage spaces, there is much potential for the industry to cater to these growing businesses through capitalising on shared synergies between storage and retail.

The need for end-to-end storage solutions

As Singapore’s retail markets grow, so too do the demands of such businesses. Larger stock inventories would require more space, and busy entrepreneurs are seeking holistic, end-to-end solutions that cater to their logistics needs.

These demands largely lie in order fulfilment, where business owners discover inadequacies in last-mile delivery services, especially with the surge in demand. From their warehouses and storage spaces, these businesses often have to source a separate supply chain logistics provider to handle their delivery.

A third-party provider may sometimes cause more problems than it solves, due to inflexibility, service quality, logistical hassle and more. Furthermore, it adds another layer of cost and administrative work.

Additionally, e-commerce businesses find themselves without a conducive all-in-one space for daily storage cum logistical operations. Such tasks include packing, dispatching/receiving, stock-taking, and even photo-taking or live streaming for sales and marketing purposes.

Also Read: VFlowTech lands US$3M to scale low-cost, long-duration energy storage solutions beyond Singapore

Renting a separate studio or workspace eventually incurs additional cost and more travel time, challenges that busy entrepreneurs face as they establish their business.

What a one-stop storage solution looks like

Noting these pain points, there is the need for industry players within each part of the supply chain to successfully identify gaps which they can plug. With storage playing a huge role in end-to-end logistics, particularly for businesses within the retail industry, storage providers should look to introduce value-added services that can help make daily work processes even more seamless for businesses.

These can come in the form of onsite facilities that complement and optimise their customers’ operations, such as order fulfilment areas for packing, invoicing and stock taking, pick-up and return points for goods, and breakout areas for work discussions, photography and live streaming studios, and more.

Once they have established the support that they can provide to businesses for necessary day-to-day operations, storage providers should also look to extend in-house delivery services or collaborate with a delivery partner to achieve a suite of end-to-end offerings.

Another example of such services would be warehouse logistics, where businesses can outsource their logistics management responsibilities to the storage space. Business owners need not worry about warehouse storage and manpower issues, as the end-to-end warehouse management service would be handled externally, be it receiving of shipment, warehouse management, order processing, packing of orders or delivery dispatch.

This is particularly helpful for businesses when stock volume increases, and order numbers get overwhelming. These entrepreneurs can then concentrate on generating sales while leaving the time-consuming tasks of warehouse management to the storage provider.

Through these holistic, value-added facilities and services, the aim is for storage spaces to play an even more integral role in the supply chain and effectively morph into a one-stop integrated solution not only for storage but for overall business and extended operational needs.

The larger role of storage in supporting Singapore’s booming retail economy

E-commerce will continue to increase in popularity even after the pandemic. As many have discovered the slew of benefits that the digital economy brings, consumer behaviour and expectations have changed. As such, the market must constantly answer and anticipate these evolving needs.

Also Read: Why Singapore’s local supermarket– Melvados swears by old-fashioned business sense

While physical retailers are currently experiencing a bounce-back in sale figures, many have also seen the advantages of e-commerce and increasingly embraced it. In fact, many have switched to a fully digital presence.

With modernisation setting the perfect environment for business growth, the number of e-retail businesses in Singapore is set to rise, and they will need even more cost-effective options to store goods and fulfil orders as they pit themselves against their competitors.

In meeting these industry trends, the self-storage industry is set to flourish at an even quicker pace, projected at a 6.3 per cent CAGR for the forecast period of 2021 to 2026. Currently, there are more than 30 operators across 80 facilities island-wide, up from less than 10 operators just five years ago.

The self-storage market must continue pivoting and adapting its services to meet these changing needs, such as the implementation of holistic services while integrating more technology within their facilities to provide users with increased efficiencies.

With the industry growing alongside the e-commerce market share, the need for a physical space for storage, along with the full suite of value-added services will become a norm. In the future, storage spaces will eventually evolve into dispatch centres.

With Singapore’s plans to become a leading e-commerce hub in Asia, buoyed by government incentives and policies, the environment for e-commerce is ripe and set to thrive, with innovative storage solutions as its catalyst.

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Singapore-based early-stage VC firm Insignia Ventures Partners has announced the final close of its latest funds, totalling US$516 million.

According to a statement, this included US$388 million for the main fund IVPF III, US$28 million for an entrepreneurs’ pool that invests alongside the main fund, and US$100 million for Annex Fund I. These funds will focus on early-stage technology investments in Southeast Asia.

Investors in the new fund include unnamed sovereign wealth funds, foundations, university endowments, and renowned family offices from Asia, Europe, and North America.

“We could have raised a much higher amount, but we have learned that smaller, tighter funds do better,” Founding Managing Partner Yinglan Tan said.

“We see a once-in-a-decade opportunity to capture outlier returns, as the winners become very obvious when the tide goes out,” he went on. “At the same time, winners cannot just be defined by valuations and scale but are ultimately companies with sustainable unit economics and concrete value creation. A fine balance between speed and endurance defines our search for outlier returns.”

Also Read: (Exclusive) Sequoia Capital’s Venture Partner Yinglan Tan quits, launching a new VC fund

Launched in 2017, Insignia Ventures backs companies in the consumer, cryptocurrency, enterprise, education, fintech, gaming, healthcare, logistics, marketplace, and proptech sectors. It has invested in more than 50 companies, including unicorns such as auto retail platform Carro, Indonesian digital investment platform Ajaib, AI for business intelligence company Appier (listed in Japan last year), and GoTo (listed in Indonesia this year).

Insignia Ventures’s other investments are fintech firm Payfazz (now Fazz Financial), Indonesian commerce enabler Shipper, the Philippines’ first fully digital bank Tonik, mental health tech company Intellect, conversational AI market leader WIZ.AI, and open banking platform Brankas.

The VC firm aims to be more aggressive in “next-decade sunrise sectors” like web3, climate tech, healthcare and agriculture.

The press release mentioned that Insignia Ventures’s enterprise value is over US$46 billion on US$304.9 million of invested capital, with a loss ratio of less than 2 per cent. Its portfolio companies have also attracted US$7.7 billion in follow-on funding.

“The impact made by the biggest companies out of Southeast Asia in the past decade will be surface-level compared to the impact market makers of the next decade will be making. There is understated but critical alignment between the solutions coming out of these areas and long-standing problems in the region from end-to-end food sustainability to trust with institutions,” Tan added.

“The solutions to these problems cannot be solved by technology startups alone, and these sectors may still be early. However, the right founders matched to the right problems can move the needle, and that is precisely why we cannot waste a minute in this “golden hour” to back them.”

Insignia Ventures announced its maiden US$120 million fund in 2017 and launched its second fund worth US$200 million in 2019.

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Hiring offshore developers in Vietnam is a common strategy for businesses to scale up their tech operations without getting hindered by the limitation of local tech talent. It enables companies to save cost and time while also diversifying their manpower.

However, recruiting and securing tech talent overseas is anything but simple. It also requires a significant up-front investment to successfully build and grow a tech team in Vietnam. So we always recommend our clients consider these crucial aspects before deciding on hiring offshore developers.

The ideal place to hire offshore developers in ASEAN is Vietnam

The primary reason why many organisations prefer offshore tech teams over local hires is their cost-effectiveness. For a developed country like Singapore, hiring a full-time local software developer with five years of experience can be extremely expensive with an average cost of US$3,220.

On the other hand, a Vietnamese developer with the same experience and skill set only costs US$2,300 monthly or 40 per cent lower. Meaning firms can easily double the headcount with the same budget by building their own offshore tech team.

Apart from the cost factor, it is unquestionable that Vietnam possesses a fast-growth tech talent pool. A total of 400,000 local developers currently working coupled with 50.000 new tech talents join the workforce each year.

This is dues to the Vietnamese government’s prioritised investment in the IT industry and education, ensuring the country becomes the regional tech hub for tech firms and startups across the globe.

What businesses need to know before recruiting offshore developers

• The structure of offshore tech teams

Before starting searching for candidates, it is imperative that firms identify the optimal tech team structure. The answer often depends on the complexity and specifics of the projects which vary case by case. However, the common ground is it should satisfy the company’s particular needs within the given timeframe budget.

Also Read: 5 research-based tips to effectively manage your remote software engineers

For Tech JDI clients, the ideal member composition is often divided based on the expected headcount and their role responsibilities:

Very small tech team (one-three offshore developers)

Small tech team (three-five offshore developers)

Mid-size tech team (five-10 offshore developers)

Large tech team (10-50 offshore developers)

• Cost Of Recruiting Offshore Developers In Vietnam

Budget is the blood vessel that fuels your remote tech team expansion, thus, it is important to keep your budgeting right, clear out any hidden costs, and always expect future expenses when the team grows. Let’s take a car as an example, it requires fuel to run.

Similarly, hiring a developer and building your offshore tech team requires a clear budget to ensure it can scale and grow efficiently.

In other words, taking into account the developer’s salary is only one part of the picture. Firms will have to consider other recruiting expenses and hidden costs such as office space, benefits, compensations, and more.

Based on our experience, the average hiring cost for an offshore Vietnamese developer with five years of experience will include:

Hiring expenses	Offshore hiring
Age of the candidate (years)	31
Average working experience (years)	5
Headcount cost + admin cost
Monthly basic salary	US$2,574.00
Monthly SIHIUI (Vietnam) / CPF (Singapore)	US$604.89
Monthly gross salary	US$3,178.89
Monthly admin overheads	US$572.20
Monthly office expense	US$180.00
Headcount and admin annual cost subtotal	US$47,173.08

 

Leave benefits (accrued costings)   * Accrued Costings: The amount below is part of salary and admin annual cost subtotal
Medical and hospitalisation leave (30 days – Vietnam)	(-US$4,401.54)
Medical and hospitalisation Leave (14+46 days – Singapore)	N.A
Medical leave annual cost subtotal	*(-US$4,401.54)
*Vietnam medical and hospitalisation leave is a cost reduction when taken.

 

Welfare – bonuses
Annual wage supplement (13th month)	US$3,178.89
Performance bonus (paid in Q1)	US$3,178.89
Welfare – bonus annual cost subtotal	US$6,357.78

 

Mandatory welfare
Outpatient benefits cost	US$180.00
Group hospital insurance
Annual medical checkup cost	US$58.00
Mandatory welfare annual cost subtotal	US$238.00

 

Optional welfare
Company trip	US$240.00
Team building event	US$60.00
Company dinner	US$60.00
CNY / TET red packet	US$30.00
Public holiday x three days (VN) / 11 (SG)	US$90.00
International woman’s day	US$30.00
Birthday red packet	US$60.00
Marriage incentive	US$60.00
Baby incentive	US$60.00
International children day	US$18.00
Bereavement gift (funeral)	US$60.00
Optional welfare annual cost subtotal	US$768.00

Having a proper budgeting strategy allows you to choose appropriate offshore developers and the correct team size for growth and scalability. It is true that companies get to save hundreds and thousands of dollars when building their own offshore tech team in Vietnam.

Also Read: ‘Vietnam can be an excellent launchpad for regional, global startups’: says Eddie Thai

However, the misallocation of funds can also result in unproductivity. Set a budget and be determined in complying with the budget you set for your company.

• Hiring season in Vietnam

Hiring season can significantly affect your recruitment results. By understanding the nature of this recruitment season, firms can prepare for it in terms of budget planning, project planning, and resource planning. Thus, maximising their recruitment success and securing suitable candidates much faster.

Starting from March and lasting until the end of May is the so-called “golden period” when developers are more likely to switch jobs and look for new career opportunities. In contrast, recruiting them from October to January will become increasingly more difficult as this is the low hiring season.

During this period, developers are patiently waiting for the salary review, 13th-month, and Tet bonuses before they decide whether to stay or jump to a new place. Companies are advised to up their offers and benefits packages for a better chance to attract developers while competing against other competitors.

Final thoughts

When hiring Vietnamese developers for your remote tech team, there are many different factors that need to be considered, including the team structure, recruitment budget, and the current stage of the hiring season. Only those that can plan and execute accordingly will have a better chance of securing the best candidate.

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