Why Singaporean Companies Struggle in Southeast Asia

Irwin See
Nov 12, 2024
3 min read

So there are a few really practical reasons why Singaporeans don't succeed in the South East Asian market. The Singapore brand is still a very strong one in the region and one companies have wisely opened in Singapore even though they are not Singapore owners. Irvin's salted egg chips for one are helmed by Indonesian owners who have very cleverly positioned it as a Singapore brand.

So why do some Singapore companies succeed while some fail?

These are a few key reasons for that

1. Non-Localization of Products

One of the most common challenges for Singaporean companies expanding into SEA is the tendency to underestimate the need for product localization. Each SEA market is unique, shaped by local preferences, cultural nuances, and consumption patterns. Companies that fail to adapt their products to suit local tastes often struggle to engage consumers. For instance, food brands may need to adjust flavors, while tech companies might need to adapt to local languages or functionality preferences. Ignoring these aspects can alienate local consumers, who gravitate toward products that resonate with their specific needs and preferences.

2. Non-Localization of Pricing

Singaporean companies frequently miss the mark when it comes to pricing strategies in SEA. Pricing in Singapore is typically higher due to its high-income base and higher costs of living, but these assumptions do not translate well into other SEA countries. Very important tip – consider reducing your pricing by 3 times when you are out of Singapore.

Many SEA countries have a price-sensitive consumer base, and while Indonesia for example has a HUGE mass market, they are extremely price sensitive.

Think about quantity than quality if you are targeting mid /mass market segments.

3. No Local Representation

Having a physical presence or local partner can make a substantial difference. Without a local representative, Singaporean companies may lack the insights needed to navigate each country’s unique regulatory landscape, cultural norms, and business etiquette. Additionally, local representatives help you negotiate easier !

Something that the local potential partner might want to say they might be shy to express but will tell your local representative. In Vietnam or Indonesia, they might be shy and hesitant about expressing themselves and will reply positively but are not interested in the first place. Your local representative will help you tell the difference.

4. Insufficient Face-to-Face Engagement

Face-to-face interactions remain essential in SEA business culture, where building trust through personal relationships is often prioritized. Many Singaporean companies rely heavily on virtual communication and remote engagement, which can appear impersonal and hinder relationship building. You need to meet your local partner to show sincerity and availability that you are there to support your local business partner.

Face to face meetings also help you tell if you have chemistry with the potential partner or not.

5. Lack of Flexibility

Singaporean companies can also struggle due to a rigid approach to operations. Business in SEA often requires a high degree of adaptability to respond to changing regulations, infrastructure challenges, and unexpected market dynamics. In many SEA countries, business environments can be volatile, with unexpected challenges that require swift adjustments. You need flexibility to negotiate customs, tax, product registration, local deals.

In Singapore the system is strong so we are transactional. But out of here, systems are weak thus things are relational.

Can Singapore companies succeed ? Yes of course !

Remember with all these factors, add in stamina and the understanding that it is a long game and you will be richly rewarded. In business, nothing beats being there to know the ground and to understand how the machine works yourself.

ABOUT US

Curt & Co Pte Ltd is a consulting company started amongst a group of business owners who were looking for a consulting company themselves for advice !

Our offices and our focus markets are in Philippines, Indonesia, Singapore, Vietnam and Malaysia. With clients ranging from 1 man operating SMEs to listed companies, we are proud to have helped our clients across different industries gain market entry into the South East Asian region.