This week Momentum Works went to the LKY School of Public Policy to hold a workshop for a group of EMBA students from Russia. The session was about conducting business in Southeast Asia and the potential risks that businesses might face. Here are some snippets from the exchange of knowledge and expertise.
Here’s What We Shared
With the aid of a map creatively drawn from scratch, captured in the photograph below, Momentum Works talked about the different opportunities and challenges in different Southeast Asian countries.
For example, companies wishing to expand into Indonesia have to take into consideration that the country is comprised of more than 17,000 islands. Hoping to expand operations to every single island therefore constitutes a Sisyphean dream because of the costs incurred from logistics. However, a company cannot profess to have succeeded in Southeast Asia without having succeeded in Indonesia, the country with the largest population in the region. Thus, we also gave some tips on navigating the Indonesian customs.
Crucially, it is imperative that one’s entry is planned strategically. Our suggestion is to focus first on Java, the largest island in the country boasting over half the country’s population. Once Java has been conquered, any further expansion within the country can be considered the icing on the cake.
Jianggan drew from his staff experience working at Foodpanda to illustrate how companies have to adapt to local circumstances. Using the example of urban planning in Barcelona and Singapore, he explained why it took twice as much time to deliver food in Singapore as opposed to Barcelona. In Barcelona, shops tend to be at street level and riders have easy access to parking at sidewalks next to their destination buildings. In contrast, shops in Singapore are mainly in shopping centres and/or locations where parking is a distance away. Riders in Singapore would thus need many more detours to reach their destinations. Shops at ION Orchard mall were the most dreaded pick-up points, with the fastest rider needing at least 7 minutes each way to park, run and collect food!
The most interesting focus of the workshop was about understanding the cultural sensitivities of a country, a topic we had previously written about in our article about the intricacies of communication in different countries.
In this world of instant messaging instead of face-to-face interaction, people in high context countries have turned to emojis to show to the other party their “body language”.
Having once sent his interlocutor the Slightly Smiling Face instead of the Smiling Face emoji, the person Mr Li had been conversing with misconstrued Mr Li’s usage of the emoji as a sign of subdued anger.
This last point was deemed highly valuable information to the Russian students, as several of them work with partners in China and communicate with their Chinese counterparts using WeChat.
Russia at a Glance
In the course of the workshop, many of our preconceived notions of Russians as a grumpy lot owing to the region’s cold weather were also swiftly dispelled, following an inquiry posed to us by one of the participants regarding our own impressions of the country. Personally, all I knew about Russia at the start of the event were Yulia Zagoruychenko, the current World Latin Dance Champion who hails from the country, and St Petersburg.
More significantly, with a varied group of individuals working in industries ranging from agriculture, manufacturing, engineering, hospitality, and tech, we learnt that Russia is in fact fertile ground – one of the participants specialises in the manufacture and sale of fertilisers – for investors.
In particular, from the proceedings it was clear that Russian businesses are hoping to expand beyond their comfort zone and into Southeast Asia. They also hope to build a strong brand for their local products in the process. Indeed, a primary cause of agony for these companies is the general lack of awareness of Russian products outside of Russia. One participant, as an exporter of locally-produced honey, mentioned how most people do not even know that Russia produces honey.
One key question from the participants was how to make the Russian brand well-known in Southeast Asia. We pointed out that brands can be deceiving but effective, making use of the example of Miniso, the Chinese company which has built a name for itself by giving the impression that it is a Japanese brand and has since become very successful in Southeast Asia.
As a final takeaway, our COO, Yorlin Ng, made what was perhaps the most insightful statement of the day, valuable as it is applicable to any and all organisations. “Whenever you do a business,” she said, “whether it’s a traditional one or a start-up, always think of the exit strategy.”
Going forward, we hope that the students will be able to apply the knowledge they had acquired in the course of the workshop to their businesses and operations. We enjoyed ourselves thoroughly during the event, and who knows, the day might come when we will meet them again to build a joint venture together!
They will always be welcome to contact us, just as you, our dear readers are, at [email protected]. If you would like to learn more about doing business in emerging markets from Southeast Asia and beyond, we are Momentum Works, and besides building ventures, we offer consulting services too.