For any Russian company with international aspirations, the Asian markets are the modern Klondike - and not just because strained relations with the West have made it more difficult for some Russian enterprises to do business there. Asia will be the future global leader, believes Martin Roll, a Danish business and brand strategist who has lived in Singapore for nearly 20 years - and he is far from alone.
Singapore is renowned for its attractive investment environment and cutting-edge tech firms. Photo: Pixabay.
With its attractive business environment and connected marketplace, Singapore is seen as a global hub in Asia, making it an ideal springboard for any company seeking access to Asian markets, Roll told a selection of Russian businesspeople at the Singaporean Embassy in Moscow on Friday.
“The world is shifting away from U.S./Western-style capitalism and we are seeing the rise of China,” he said.
“In 1996, China spent 0 percent of its GDP on innovation. Now it spends about 2.4-2.6 percent of its GDP on it. Japan, Korea and the United States have always spent around 2.8 to 3.2 percent on innovation, so China’s catching up,” said Roll, a senior advisor to McKinsey and Company and author of the book “Asian Brand Strategy.”
But to be successful on Asian markets, whether a B2B or B2C business, understanding consumers is crucial, Roll told the internationally minded entrepreneurs, offering a “cheatsheet” of helpful tips: traditional values are important in Asia, but affluent Asia behaves more like the Western world, and while Asian countries are generally still conservative on gender issues, that is changing.
For Russian startups, insight into how to succeed on lucrative Asian markets is invaluable. If the West is to gradually move into the role of an adjusting partner instead of a trendsetter while Asia produces more and more global brands, as Roll and others predict, this is where ambitious companies should be focusing their expansion plans.
“Being seventh in the Global Startup Ecosystem Ranking for 2016, Singapore focuses mostly on consumer digital, fintech and cleantech technologies, and serves as a platform for developing in Asia: that’s why we recommend our startups working primarily in these fields to consider starting international expansion from Singapore,” said Daria Lipatova, head of international acceleration programmes at the Skolkovo Foundation.
The Skolkovo Foundation has been working with IE Singapore, the country’s external trade and investment agency that co-organised Friday’s event, for many years, and Dr. Poh Koh Koon, Singapore’s Minister of National Development, Trade and Investment, visited Skolkovo for the Open Innovations forum last October.
Martin Roll talking to Russian entrepreneurs about doing business in Asia at the Singapore Embassy on Friday. Photo: Sk.ru.
In December, a delegation from Skolkovo visited Singapore to forge partnerships with a number of business accelerators there, said Lipatova. Two residents of Skolkovo’s IT cluster attending Friday’s event - CDN Video and Cardberry - have opened offices in Singapore and taken part in Skolkovo roadshows and acceleration programmes there.
“Our company is actively promoting our product on the international market right now,” said Marina Druzhenets, development director for Cardberry, which makes an electronic card that combines all a person’s loyalty cards in one.
“Considering that our gadget is produced in China, we are now looking at the possibility of setting up a distribution centre in Singapore, particularly in light of its special tax regime for small and medium-sized companies, the lack of foreign exchange controls, and access to foreign investment and financing loans,” Druzhenets told Sk.ru.
CDN Video, which provides Content Delivery Network (CDN) services to anywhere in the world, opened a Singapore office several years ago as a gateway to Asian markets. While the Moscow-based company, which helps its client companies to deliver fast, reliable and secure internet and video content via a network of servers located across the globe, has more sales in China, Arab countries and in Israel than in Singapore itself, its CEO Yaroslav Gorodetsky told sk.ru on Friday that the office had been helpful for meeting clients and attending conferences related to the company’s activities. Singapore is home to some of the region’s biggest tech conferences, such as Tech in Asia, Echelon Asia and InnovFest unBound.
Roll, an expert on branding, advises companies not to try to escape their roots, a concept at odds with the experiences of some Russian companies operating abroad. In Asia, Russia is seen as being “very far away,” said Gorodetsky.
One of the other Russian entrepreneurs present went further, saying that Russian roots can even be a hindrance due to the formation of a “dodgy image” of the country abroad.
Roll advises Russian companies to focus on their good reputation for engineering, and points out that when a product or service is truly great, no one cares where it is from. He also cited the example of Korea, whose reputation for quality has been significantly boosted by Samsung during the last 20 years.
“You can help to rebrand Russia,” he told the audience.
The main challenges facing companies today are universal, Roll believes.
“There are two things happening in technology: artificial intelligence and virtual reality. In our lifetime, it’s going to be a game-changer, and it’s not going to be a nice lunch, because they’re going to eat jobs,” he said.
The solution? Keep innovating, and learn from staff what customers want, he advises.
“Arrogance and complacency are the most lethal enemies of strong brands,” he said.