Chengdu is the most prosperous city in Western China with its strength in the service industries. Abundant opportunities are present with government reform and development plans.
Despite the Sichuan earthquake in 2008, Crestar, which runs ELFA as a premium kindergarten in Chengdu, managed to break even within one and a half years of operations.
Economic activities in Chengdu has picked up during the first quarter of 2009, with a healthy growth of 10.8 percent. This was largely due to the government stimulus package for the earthquake-affected areas.
UPS Insights
MARKET FOCUS
By Paul Chee, Business Development Manager, UPS Singapore (Also an iAdvisor)
Singapore small-to-medium enterprises (SMEs) are showing
resilience despite the current economic challenges. Based on the
UPS Asia Business Monitor (ABM) 2009, Singapore SME leaders are
capable of maximising opportunities through government support and
strategic business partnerships.
Singapore SMEs are now directing their focus to three key areas for long-term growth:
Largely due to the support received from the Singapore government, 54 percent of Singapore SMEs believe that the global economy will rebound by 2010. This was the strongest finding among all 12 Asia Pacific markets surveyed, highlighting the government’s efforts in helping out Singapore SMEs ride out the recession. In addition, Singapore businesses currently report a high level of supply chain efficiency in the market. This contributes to a strong infrastructure in place for SMEs to leverage on.
“Despite the challenging economic environment, SMEs in Singapore are in good stead to see their businesses through this difficult period, should they be nimble in reviewing their internal processes and quick to seize opportunities around them,” Gillian Sim, Managing Director at UPS Singapore, said.
“The Singapore government and global trade service partners such as supply chain providers have been proactive in their initiatives to help SMEs, by actively educating and providing tools to navigate out of the recession,” Sim added.
Based on the UPS ABM 2009 insights, here are four recommendations to help Singaporean SMEs remain relevant and competitive in the global marketplace:
Sixty-eight percent of SME leaders in Singapore acknowledge the importance and positive impact of globalisation. In addition, 24 percent point to the exploration of new markets as the single best growth opportunity in the current economic downturn.
Singapore SMEs can leverage on Singapore’s network of 15 FTAs with over 20 countries, including major economies and markets around the world such as US, Japan, India and China. FTAs provide tariff concessions which boost the competitiveness of Singapore-made products in overseas markets, allowing businesses to better manage costs. This offers Singapore-based companies the opportunity to effectively grow and diversify revenue streams on a global scale.
Seventy-five percent of Singapore SME leaders view China’s increasing dominance as a boost to their business. They view China’s success as a key regional growth driver (29 percent), anticipate an increase in exports to China (13 percent), and also look forward to leveraging on China’s low-cost products (9 percent). This would provide a potential solution for containing costs, cited by 61 percent of Singapore SMEs surveyed as the second biggest challenge facing them today.
With the China-Singapore Free Trade Agreement (CSFTA) signed in October last year, Singapore SMEs are in a prime position to take advantage of opportunities in China.
For 61 percent of Singapore SMEs, increasing costs represent their second biggest concern today. Action were taken to counter the recession, with 68 percent of Singapore SMEs reducing their operating costs such as rental and utilities. Majority of SMEs remain apathetic about the potential to improve internal efficiencies through better supply chain management; 37 percent reported that they are not changing their supply chain practices and 40 percent said they focused solely on reducing transportation and distribution costs.
However, pushing suppliers to reduce costs only offers a short term solution, and will not help them sustain their business in the future.
A more effective way to manage costs is to actively review overall resource allocation in the complete supply chain. With the help of UPS, a global leader in supply chain and freight services, SMEs can mitigate risks through forward planning, scrutinising their supply chains for vulnerabilities and developing contingency plans.
The availability of a talented workforce will help Singapore’s economy to rebound, as believed by 89 percent of Singapore SME leaders. Increased government funding for training is the strongest motivator for SMEs to engage employees in training and development courses, according to 66 percent surveyed. This acknowledges the importance of government support for SMEs.
Singapore SMEs can also take advantage of additional schemes introduced by the government. One example is the Jobs Credit Scheme, introduced in the Singapore Budget 2009, that encourages businesses to preserve jobs in the downturn. Businesses will receive cash grants to retain existing workers and, where warranted, hire new ones.
Since its launch in 2005, the UPS ABM has been conducted annually to deliver the latest insights on the changing business needs of the largest business community in the region, the SMEs. As discussed at the third APEC Business Advisory Council Meeting in August 2008, SMEs make up 95 percent of all businesses in the Asia-Pacific region and employ 80 percent of the workforce. This year, the UPS ABM 2009 surveyed 1,200 company owners, proprietors, CEOs, Managing Directors and other top management employees across 12 markets.
A complimentary service by www.iadvisory.com.sg
Name: Paul Chee
Company: UPS
Expertise: Import/Export
Market: Asia Pacific, Europe
Hear Singapore's perspective
in the 2009 UPS Asia Business Monitor survey.
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