2020 while tough for businesses globally, was also monumental in driving change and resilience across the board. One of the prominent trends that stood out last year and is expected to shape the future is – digitalization.
The ongoing pandemic has clearly reinforced the need for businesses to digitalize. Whether it is to reach more consumers online, increase revenue, streamline operations, or improve productivity – businesses are beginning to recognize the benefits of digitalization. However, taking the first step can be a little daunting. This is because some businesses, especially the smaller ones, lack technological expertise needed to start the digitalization process. To add to that, each business may have a different set of priorities and requirements, thereby making the process even more difficult.
Digitalization as a means for creating value
PayPal stepped forward to help solve this challenge by empowering local SMEs with skillsets that enable them to pivot their business models. In September last year, PayPal Innovation Lab (PPIL) introduced the SME Business Challenge to enable Singapore’s SMEs to digitalize and use technology more effectively. Our subject matter experts and partners worked closely with business owners to co-develop customized solutions to specific business problems. This resulted in SMEs gaining exposure to digital concepts and platforms that they can adopt in areas such as e-commerce, social media, and digital payments.
Norine is a fantastic example of an SME that leveraged the program to create long term business value. It deals in traditional Chinese medicines and initially operated in a low-key manner, solely relying on its small but loyal customer base in Singapore. However, to scale the business further, it needed to expand beyond Singapore and widen its customer base by tapping on the younger generation. The solution was to build an online presence such to start selling its products online, thereby growing its customer and distribution networks. In the long run, this will help to reduce costs, expand their product offering, and penetrate new markets. Today, Norine has not only introduced e-commerce, digital payments, and social media components to its existing business model, it has also been approached by several established overseas herbal and natural product brands for distribution partnerships in Singapore.
aNERDstore, a Singapore-based slow fashion brand selling artisanal batik apparels, is another good example of how the program helped it to transcend beyond offline channels and introduce an online retail experience. Further to that it also helped optimize the sales funnel through digital marketing, improved inventory management, enhanced its backend analytics.
Overall, it was enriching to witness the transformation of eight traditional brick and mortar companies to become agile, digital-minded businesses.
New year, new beginnings
As we put an unprecedented and challenging year behind us, it is important to remember that the future is digital. Therefore, the only way forward is to be digital ready. For SMEs that are still debating whether to digitalize or not – let me tell you that it is still not too late. Communications and Information Minister, S. Iswaran, has been encouraging small business owners to have a "just try, lah" attitude when grabbing the digitalisation bull by its horns. He summed it up very well by saying that digitalization is not an end in itself, but a means to better lives and livelihoods.
Interestingly, a recent study showed that small businesses that embrace digitalisation could add US$24 billion to Singapore's GDP by 2024. This proves that as Singapore emerges from the pandemic, the transition towards digitalization could contribute to the economy’s overall recovery.
For those SMEs that are already transforming themselves, it is not the end of the journey. They will need to continuously keep pace with technological advancements and evolve to remain relevant.