Slowdown or even recession in the Singaporean economy is no more a mere bad dream. Last year’s growth rate was the slowest in a decade, and the Monetary Authority of Singapore (MAS) has revised its growth forecast for the current financial year. And the fear that the economy may go into recession this year is looming large. It was the US and China imposing retaliatory tariffs on each other’s exports that spelled doom for the global economy in the past one year. But now it is the advent of the coronavirus outbreak that will test the resilience of firms in 2020. Singapore isn’t untouched by the COVID-19 crises, and the firms of the city-state are bracing for the long-term impact of the pandemic.
Many large IT firms in the city-state may likely soften the blow owing to their deep pockets and presence in multiple locations. By contrast, it will be SMEs that may be hit hard unless they adopt innovative ways to stay afloat. Singaporean economy cannot afford a hit to these units as SMEs employ half the labor force and contribute about two-third to the economy. Are there any measures that can help SMEs mitigate the slowdown? Indeed, there are. For example, focusing on productivity and cutting down on non-essential costs are some of the ways. Non-essential costs here mean travel expenses and exorbitant pay hikes that can put on hold, at least for the time being.
Government Financial Aid to SMEs
However, the Government injects more than S$60billion, which is almost 12% of the country’s GDP to support the businesses in these unprecedented times. After the experience of the SARS pandemic in 2003, the Government has been proactive in providing financial aid to SMEs to combat the economic downturn. The three hefty budgets released for the SMEs to provide additional cash flow, for manpower support schemes, digitalization, internationalization, and business development.
- 100% rebate on property tax and waived off rentals for 2months for commercial property
- Extension of payment of corporate income tax for 3months
- 25% rebate on tax payable for the assessment year 2020; capped at S$15000
- Trade loans up to S$10m and working capital loan up to S$1m with 90% government risk share
- Job Support Scheme offers 75% wage subsidy for the month of April & May of the first S$4600 gross monthly pay of the local employees.
- S$600m payout towards wage credit scheme
- Foreign worker levy to be waived off due in April
- Workers get additional training support during working hours, fee subsidies for various courses.
- SMEs to get up to S$10,000 for manpower transformation
- Incentives to hire workers aged 40 and above
- Employment credit for hiring workers above 55yrs.
- Digital transformation to be extended to 23 sectors of SMEs and support in enhancing the business continuity plan
- Assistance up to S$100,000 for developing new market per firm
- Market readiness support
- Enterprise development grant to be raised to 80% till December 2020
- Productivity Solution Grant also increased to 80% till Dec 2020
- Up to 90% support extended to firms who have been hit severely due to COVID-19
- Training supports for the leaders of the SMEs
Additional to the support and aid provided by the Government, SMEs can tide over the economic slowdown by collaborating with the large tech firms based in the city-state. Collaboration and partnerships have always produced great outcomes in the business world. Handholding is what it is termed when a big player in the sector helps the relatively smaller one take baby steps towards scaling up. And at this critical hour, when firms across all sectors will be grappling with subdued demand and wide disruptions in supply chains, the need to come together and collectively face the challenge is more than ever. And it is not that SMEs will be the only ones gaining from of this arrangement. In fact, large tech companies can benefit by way of revenues and efficiency brought by synergies.
Large Tech Companies extending support to set-up online business for retail SMEs:
Crippled by the Circut Breakers, retail SMEs have to shutter their brick and motor stores. It is forcing them to rely on online sales for the business continuity plan. Many SMEs do not have an online presence; neither do they have the technical expertise nor the resources to go digital. To help SMEs’ in these dire straits, four of the largest e-commerce companies have come together and put forward a comprehensive plan to assist the retailers that wish to join the Singapore E-commerce Program. Enterprise Singapore will cover 90% of the cost to set up the online business with the large E-commerce giants like Amazon Singapore, Lazada Singapore, Shopee, and Qoo10. Below are some notable highlights:
Amazon Singapore: Under the Singapore E-commerce program, Amazon offers a complete waive of a monthly subscription fee of S$29.90 for every seller. It will also provide an extended management support for six months. SMEs can avail of the dedicated delivery services of Amazon and will also be eligible for Prime Free delivery services.
Lazada Singapore: An e-commerce platform backed by Alibaba, offers SMEs to join this program, with a dedicated team for training and support. It will include content creation, building online campaigns, product listings, online chat with customers, thereby help SMEs to become a part of the robust system and develop their online business.
Qoo10: One of the oldest and most experienced e-commerce platforms forms the part of Singapore E-commerce platform extending support packages to SMEs in the form of content curation, managing the logistics including delivery services by Qxpress and dedication online marketing support for 6 months.
Shopee: This e-commerce platform is a subsidiary of Sea Group. Shopee offers local campaign support to direct traffic to local sellers and to attract customers. Shopee has recently introduced the Shopee Sellers Support Program worth S$1m for the SMEs to sponsor more vouchers, cashback options, flash deals worth S$8000 and free delivery services. It also offers paid marketing services to SMEs who have joined this program. Also, the SMEs will undergo a 12weeks of induction program for a complete understanding of the online set-up process.
Google announced training programs targeted at F&B, Retail and Tourism SMEs
Google aim to help the SMEs from Retail, F&B and Tourism sector via online training programs run by SME Leadership Academy Program. These program will comprise of digital solutions, online collaborative tools, use of Google Ads that help businesses to market their product & services.
Facebook, STB and Enterprise Singapore also offers Online Training Programs
SMEs that are hard hit by COVID-19, can now tap on online training courses offered by Facebook, STB and Enterprise Singapore. These training programs are mainly for Travel, Retail, Hospitality, Events sectors, which have deeper impact due to pandemic. The program entails upskills of personnel, customer engagement, adapting to enhanced business models using Facebook tools. Join for the first Webinar on 30th April at 10.00am.
Top 5 Tech Companies offers Free Remote Working Tools during the outbreak.
Microsoft: Microsoft team, a video conferencing app, offers a six months free trial for premium plan, meeting recording facility, which includes 1TB storage space.
Google: For all G Suite users, Google provides 3 months of free access to their enterprise plan. Users will get an opportunity to conduct meetings via Google Hangout app. It will also allow 250 users per call, including recording facility and live streaming for more than 100,000 viewers.
Cisco Webex: WebEx offers a free enterprise version, up to 100 participants joining the WebEx meeting, and also a free dial-in facility.
Zoom: Continued use of the free version of Zoom’s video conferencing software, whilst testing its network to ensure maximum reliability due to whopping app downloads as the companies moving into complete work from home mode.
LogMeIn: LogMein provides free Remote working kits for nonprofits, schools, and health care organizations. LogMein’s remote working kit includes GoToMeeting and GoToWebinar app, which can host up to 3000 users.
Collaboration with Telco Giants – Starhub, Singtel, and M1
The Telco companies in Singapore has been instrumental in extending various digital solutions to SMEs. Singtel reached support towards cybersecurity services (SMEs most susceptible to cyber-attacks), Mobile payment facilities, and digital marketing tools. Singtel is also targeting specifically at F & B, security, and logistic sectors. On the other hand, M1 provides retail analytics, and Starhub support includes business transformation solutions, logistics services, and technical support for smart retail SMEs. Starhub is also offering SmartUC mobile facilities to SMEs to make and receive free calls from 6series office number from the laptops and the mobile till 1st September 2020 and thereby saving communication costs for the SMEs.
The above-discussed are some of the ways that SMEs can deploy by prudently exploiting opportunities provided by large tech companies. Indeed, the Singaporean market is dominated by Small and Medium Businesses, and it will be their collective response to the looming slowdown that can prevent the economy from taking a deeper plunge. Many services offered by large tech companies, such as building a online presence, offering paid marketing services, logistics services, training supports are either free or come at a very minimal cost. This will not only aid the SMEs to stay afloat but build resilience towards continuity of the business during these unprecedented times. The utility of these services offered by large tech companies is quite high.
The onus is also on large companies to handhold Singaporean SMEs in this time of need. A collaborative effort will surely benefit all stakeholders in the business community of Singapore. The coronavirus event and its adverse impact on the trade and commerce can only be mitigated by coming together of large tech companies with relatively smaller businesses.