Singapore – SMEs hit hard by Slow Economic Growth in 2016; could online marketing be the answer?
Technological advances have always paved the way for revolutionary economic growth since pre-history. Today, online branding and marketing is the best way for a business to get noticed.
With a 1.8% GDP growth in the last quarter of 2016, the Singapore economy had performed better than expected, driven largely by growth in the electronics and biomedical manufacturing sectors. This is better than the speculated 1.2 percent made in that third quarter.
However, despite the attempts of the local media to paint the economic slowdown in a softer light, many businesses in Singapore felt the pinch. The F&B sector was hit the hardest. Sales and profits for bistros and cafes falling 20 percent last year as customers hold back on their spending to cut expenses. This trend is expected to continue throughout 2017.
But unlike big businesses that are often able to absorb some losses, small business owners and SMEs are unlikely to fare as well. It could even cause them to fold and close shop.
The new Trump administration with its protectionist policies and decision for US to withdraw from the TPP will not help the slowing economy, either. With total trade in 2016 between the two countries amounting to US$44,669 million, with total imports of US$17,801 million, the US is one of Singapore’s largest trading partners. (List of largest Trading Partners with the United States, Wikipedia. Other sources: https://www.census.gov/foreign-trade/balance/c5590.html)
Adopting technological changes to keep up with the international scene.
Technological advances have always paved the way for revolutionary economic growth since pre-history. The transition from hunter-gatherer to the first agricultural revolution back in 10,000 BC, which turned 1.8 million years of established wisdom upside down – and paved the way for humanity’s first technological revolution. 200,000 years ago, if you prefer to be associated with only modern humans.
The agricultural revolution was then far superseded by the industrial revolution. It was a change so drastic that it saw the shift of wealth from the landowners into the hands of the industrialists. As history repeats itself, the industrial revolution upset thousands of years of hereditary power and established custom. The modern era is no different, and the Information Age of will continue to drive that behemoth home.
But for all the wealth that technology has brought with it, it has also marginalized a significant portion of the population, especially those who fail to adapt. And just like our ancestors who had continuously improved their agricultural produce by replacing less productive plants with superior ones, so do we have to keep up to date with developments in the online world, like better tools or methods of communication.
The march of technology is relentless, and it often leaves sizable portions of the population marginalized and they get left behind. This displacement of traditional jobs is best illustrated today by the development of better robots and artificial intelligence. However, while traditional jobs will be lost, the best way around it is the same – to adapt, learn new skills and embrace the change. Nobody mourns the loss of tree climbing skills because they’re simply obsolete.
Using Online Branding to Avoid Unsustainable Operational Costs.
In the face of rising competition from around the region and operational costs due to high rental and labour costs, 2016 saw a spate of businesses folding under the pressure. From 2003 to 2014, rental prices have nearly tripled. While 2015 and 2016 saw rental prices drop and deflation, the sluggish economy and low customer spending still meant that operational costs remained prohibitively high.
Despite the difficulties faced by traditional businesses, online shopping and eCommerce has thrived. Zalora SG, Lazada and Qoo10 are a few examples of businesses that experienced exponential growth, not just in Singapore but around the region.
With a 54.31% market penetration in 2015 which is expected to rise to 74.2 percent by 2020 (Go-Globe.com), e-commerce will overturn the status quo just as industrialization did to the wealth of the landowners. And just as high-tech industrial products had greater added value compared to food products, the ability of online businesses to disassociate from many traditional requirements is the key to its success.
First, online businesses instantly eliminate overhead costs by not having to maintain a physical shop. Online branding and marketing is also a lot cheaper than traditional marketing – sending out a thousand emails is practically free compared to printing and distributing a thousand printed newsletters, by post or hired hand. More on the later…
Visibility of Online Branding.
In addition, unlike traditional businesses which are bound by their geographical location, an online business has indefinite reach potential and is able to engage a global audience. And while SEO and getting ranked on search engines is competitive, there are specialized online branding agencies that can build your online presence for you. A well ranked keyword that’s relevant to your business and your customer will effectively elevate your business’ visibility.
And who said that traditional and online marketing had to be used exclusively? The affordability and ease of an online storefront means that it’s very plausible (if not highly recommended) to start one to support a traditional business model. This creates an additional marketing channel, which brings your business to a wider audience.
Versatility of Online Branding.
Making changes or corrections to the information on websites is also far easier and practically negligible loss (the only losses would be incurred by the amount of time the wrong information had been in circulation, which can damage a business’ reputation or turn away potential customers).
Imagine trying to rectify a small but dangerous misinformation on a thousand printed pamphlets and you’ll get the idea. In an online business the only losses you’d incur is when the wrong information is up and live. If a mistake cannot be rectified immediately then the website can be taken down temporarily until the issue is resolved.
Because a website is an online business’ storefront, communicating the correct message to an audience is potentially the most important thing for a good business. Fortunately, making corrections or updates to a website is a lot easier, faster and cheaper.
The availability of online analytical tools (Google Analytics, Facebook Insights) gives users the ability to scrutinize traffic and user movement through their websites. This means that businesses can intelligently tailor their sales funnel to capture and convert leads into sales and profits.