Distinguished Guests,
Ladies and Gentlemen,
Good morning. I am happy to join you at the opening ceremony of Franchising and Licensing Asia 2014 (FLAsia).
Franchising and Licensing Industry in Singapore
Franchising and licensing continue to play important roles in Singapore’s retail trade as well as food and beverage (F&B) industries. In 2013, the nominal value added (VA) of both sectors were 5.1 billion and 3.3 billion Singapore dollars respectively, with the franchising industry alone accounting for approximately 1 billion Singapore dollars.
Increasing Interest from International Brands Seeking to Use Singapore as a Launch Pad
Singapore is a highly-connected city state, with an open economy and a strong intellectual property (IP) regime. All these characteristics form the bedrock of our strong reputation as a Global-Asia hub, and make us the ideal location for foreign franchisors to test their business concepts and gauge acceptance levels in the region.
I am pleased to share that we have seen a marked increase in interest from foreign brands seeking to use Singapore as a launch pad for their products and services. In fact, this year’s FLAsia will be hosting the largest South Korean Pavilion in the event’s 9-year history, with Korea Agro-Fisheries & Food Trade Corporation and Korea Franchise Association leading a group of 22 Korean franchising brands to exhibit their products and services here in Singapore.
There will also be a first-ever Japan Zone, with a total of 12 high-quality F&B concepts that will offer unique dining experiences. These brands were brought in by FT Consulting, which saw a market for them to be showcased at FLAsia. One particularly interesting brand is Athlete Shokudo Restaurant, where the menu was developed under the close supervision of Japan’s only national sports university, the National Institute of Fitness and Sports (NIFS) in Kanoya. This allows customers to select appropriate meals based on their health conditions like anaemia and hyperglycemia, amongst others.
Entrepreneurship through Franchising
Asia has seen rapid economic growth in recent years, and this has provided a plethora of good opportunities for budding entrepreneurs looking to start their businesses to serve the growing Asian market. Correspondingly, we have seen an increase in entrepreneurial intent amongst Singaporeans. The 2012 Global Entrepreneurship Monitor found that more than 21% of respondents from Singapore had the intention to start a business within three years, a figure which was second to Taiwan. In 2013, there were 39,000 active start-ups in Singapore, which represented a 58% increase from the 24,000 start-ups in 2005.
Therefore, it is timely that the theme of this year’s FLAsia is “Entrepreneurship through Franchising”. For Singaporeans with an entrepreneurial appetite, the franchising model is especially attractive as it provides the best of both worlds – the safety of an established brand with reduced risks of failure, as well as a springboard from which to establish, run and grow a business.
With Singapore’s small domestic economy, overseas expansion is a key growth strategy, and many of our start-ups have leveraged franchising to penetrate the local market or to expand their overseas footprints. YogurBerry Singapore is a good example of a local company that has successfully used inward franchising to bring an acclaimed international brand to our shores. A South Korean frozen yogurt brand, YogurBerry has a presence in over 27 countries including Australia, China, Dubai, New Zealand and the United States, with more than 270 outlets worldwide. Just last year, entrepreneur Mr Zainal Rahamat bought the master franchise rights to YogurBerry and has already opened 3 local outlets to date. The company is exhibiting at this year’s FLA to look for more business partners, so as to open even more outlets in Singapore.
LEAP SchoolHouse is a Singaporean language enrichment preschool that specialises in helping children aged 8 months to 7 years old to develop literacy skills. It is looking to further expand its international presence, beyond its three local outlets and one in Shenyang, China. Through the successful application of the outward franchising model, LEAP SchoolHouse is expected to open 2 more franchised outlets in Indonesia before the last quarter of 2015.
The Government is Committed to Supporting the Growth of the Franchising and Licensing Industry
The Singapore Government is aware of the importance of supporting the franchising and licensing industry, as well as the challenges that these enterprises face when expanding abroad. To this end, we have put in place several financial and non-financial initiatives like International Enterprise (IE) Singapore’s Market Readiness Assistance (MRA), which is intended to provide broad-based support to companies that are new to internationalisation. Under SPRING Singapore’s Capability Development Grant (CDG), an SME can be supported for up to 70% of the qualifying costs for the creation, ownership, protection and commercialisation of Intellectual Property (IP), as well as the development of franchising systems to replicate successful business models.
There is also an Intellectual Property Management (IPM) for SMEs Programme, through which the Intellectual Property Office of Singapore (IPOS) supports development projects including IP strategy development, valuation, licensing and portfolio management. This is intended to help SMEs formulate a coherent IP strategy, which can form a blueprint for domestic competitiveness as well as support overseas expansion and growth. During Budget 2013, the Government enhanced the Productivity and Innovation Credit (PIC) to include the in-licensing of intellectual property, so as to support businesses that in-license their IP rights.
I am very heartened to see promising local brands achieve success through these initiatives. Fun Toast is an innovative and unique coffeehouse concept that serves traditional home-made Nanyang food and beverages, which participated in last year’s FLAsia with 2 corporate-owned outlets and 1 franchise. By tapping the above-mentioned CDG and IPM schemes, Fun Toast has successfully added 6 franchisees to its stable of outlets within the span of a year.
Another good example would be Helen’s Accessories, a retail fashion brand with a well-curated range of working and professional ladies’ accessories. Having opened 17 outlets in Singapore malls, they leveraged SPRING’s CDG and IE Singapore’s MRA schemes in December 2013 to embark on their overseas expansion plans. Today, Helen’s Accessories has successfully ventured overseas, having managed to secure an Indonesian franchisee within 4 months.
Conclusion
In conclusion, I would like to commend the Franchising and Licensing Association of Singapore and BizLink for their good efforts in promoting franchising as a means of internationalisation for Singapore companies. In addition, I also encourage the businesses present today to leverage Singapore’s strengths as a trusted business hub, so as to expand into even more Asian markets.
I wish all of you a fruitful time at FLAsia 2014. Thank you.