Yong Ying-I, Chief Executive Officer, IDA Singapore - Opening Address EC Think Symposium, Raffles City Convention Centre
Yong Ying-I, Chief Executive Officer, IDA Singapore - Opening Address
EC Think Symposium, Raffles City Convention Centre
Singapore, 20 January 2000
1. I am very pleased to speak at the opening of the ec.Think symposium this morning. It is a pleasure to see so many key players gathered here today to share their ideas and work on e-commerce. My warmest welcome to the international participants who have come to Singapore to attend this event.
2. Paul Saffo, the futurist, commented over the new year that "we'll remember 1999 as the year the Internet ceased to be a technology and became a medium of wide acceptance". Time magazine must have agreed, since it ended the year by naming Jeff Bezos of Amazon.com as its "Person of the Year". Amazon.com is perhaps the best-known example of the revolutionary tide that is sweeping the world. Singapore too has seen our own dot.com fever, so much so that political leaders have urged the man-in-the-street to be cautious and not be carried away in chasing blindly after technology stocks.
3. There is no doubt that Singapore is into the upswing of a wave and the momentum is building. Singaporean businessmen and entrepreneurs are visibly gearing up to explore opportunities in the new era. We at the Infocomm Development Authority have seen a huge surge recently in the number of local start-ups seeking e-commerce incentives and advice. We have begun to hear about many young professionals who are turning their hand to entrepreneurship, starting businesses in new areas.
4. Many e-commerce entrepreneurs are keen to give their business ideas a try, and willing to take the risk, but have many questions about how to go about it. Most companies are asking the same questions, "Does my business plan make sense? How do I address the technology challenges?" As e-commerce is so recent a revolution and moving so fast, there is precious little "how to" guidance available in books or in institutionalised training courses. Hence, symposiums like ec.Think play an enormously valuable role, by bringing together people who have trodden the path first, and can share their experiences and insights. Case studies of other companies' successes or the pitfalls they encountered will provide useful learning lessons for all.
5. There are many misconceived notions floating around that I hope the Symposium will discuss and debunk. One of them is that "everyone in e-commerce loses money, so it is quite alright for me to lose money too". Another one, which some companies subscribe to, is that "we can sell our products and services on the Net in the same way as we sell in the physical world". A third notion that many large local companies seem to be adopting is that "so long as my company has some transaction on the Net, we have embraced e-commerce so my company is alright". I do not agree with these. E-commerce is about selling in a different way and about continuous improvement. Let me use a lesser-known example of an e-commerce success story as an illustration.
6. This is L.L. Bean, the American outdoor outfitter which has transitioned from selling from catalogues to selling online. In that process, it has built a richer customer experience, and a deeper relationship with customers. In keeping with its brand image, the LL Bean site has a nature trail look. Colours change with the seasons and multimedia is used to showcase its equipment and outfits in the outdoors. LL Bean also analyses its customers' web-activity in great detail to cross-sell products like outdoor skills courses. It has nurtured a virtual community where customers can share tips and techniques, plan outings together or compare sporting gear. Last but not least, LL Bean continues to improve its website in "Internet time", with new services reaching the market in weeks, not months.
7. E-commerce is different, involving new business models and new ways of creating value. It can involve creating value out of innovative ideas, to improve products, services, processes and applications. It can be creating value out of market development, to create new markets in cyberspace that did not exist before, or offer a different value proposition from a traditional one. As illustrated in the LL Bean example, E-commerce forces us to refocus squarely on the customer, to understand what he is like and what he wants.
8. While there are many good lessons from examining American case studies, I also think that a Symposium focused on Singaporean and Asian examples might yield different conclusions. The development paths of e-commerce in US, Europe and Asia may well be significantly different. An important point for e-commerce companies here is to consider which ideas from elsewhere can be adapted and adopted in Asia and which areas we must strike our own path. The Asian market is fragmented by language, geography, customs and regulatory systems that have made e-commerce more difficult to execute. The term that is beginning to be heard is "local relevance" of content and of customer management.
9. An Asian success story in B2B e-commerce is Asian Sources, recently renamed Global Sources. The company enables some 170,000 buyers, from SMEs to big buyers like Kmart and Toys R Us, to efficiently source from some 73,000 suppliers from across Asia. Buyers use the site to share and exchange information, gather offers, specifications and company capabilities from multiple suppliers. The order and the associated logistics are managed to get the product from source to store cost-effectively and on time. B2B e-commerce, especially when SMEs across Asia can be brought into the community, is a big area of growth.
10. Anthony Perkins, the editor in chief of Red Herring, argues that the first stage of e-commerce dominated by AOL, Amazon.com and eBay is coming to a close. The next stage of the online revolution will be ruled by audio and wireless technologies. This will include digital music and movies, interactive television, cell phones linked to the Internet and other consumer products for the home. The types of services these will spawn will look different from those we now know. Asia is well-placed to exploit this second phase as it is a market where there is pervasive use of mobile phones, pagers and organisers, in some cases greater than in the US. This means that online businesses based on such devices, which provide locally relevant services, could take off more readily here.
11. In this context, I would like to urge Singapore companies to think Asia if not global as they embark on e-commerce. Cyberspace is a great liberator for Singapore because we can overcome the limitations of geographic size, market size and access to other markets in the physical world. But we must grab the opportunity. When you build their marketing and distribution models, do you think local or do you think Asia? When you launch your products, do you still focus on a domestic launch and domestic sales first, with incremental growth into neighbouring markets, or do you think of launching simultaneously across multiple Asian cities all at once? When you build your management teams, do you hire only Singaporeans or do you consciously look for a team with an international background and international business experience? I urge you to think Asia.
12. IDA will attempt to support you in this effort. Let me just mention briefly a few areas we are working on. First, we have worked on the legal and policy framework needed to help e-commerce take off in Singapore. Yesterday evening, IDA announced the lifting of controls over the import of cryptography products. Second, we are working on different elements of making Singapore a trusted hub, through legislation such as the Electronics Transactions Act, encouraging improved IT security solutions, and secure payments capabilities. Third, we are working to upgrade the capabilities of the entire supporting cluster, including quality of service and reliability issues in communications infrastructure and web-hosting capabilities. Exodus, which takes care of web-server hosting for both AOL and Merrill Lynch, notes that top e-commerce sites want their capabilities to be "bullet-proof", always up, always available. Fourth, we are working with the communications sector to put in place sufficient international connectivity to the region. Fifth, Singapore is determined to stay in the lead in deploying broadband networks and broadband content, aiming for the Asian market as infrastructure elsewhere is put in place. In summary, our aim is to put in place an overall framework that will help make Singapore the choice location for e-commerce businesses aimed at Asian markets.
13. The possibilities are enormous, and there is room for us to do much more. IDA welcomes suggestions from the e-commerce industry on how we can assist you, and IDA will work closely with you to realise your dreams.
14. On this note, I am pleased to declare the ec.Think symposium open. I wish you all a fruitful symposium. Thank you.
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