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ISSUE:

23 COVER STORY

ENTREPRENEUR

06 PRESERVING A UNIQUE CULTURAL HERITAGE

THIS WEEK’S FOCUS

11 INDONESIA’S BLOCKBUSTER SUPERAPP MERGER

THIS WEEK’S FOCUS

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THE SOLOPRENEUR AND THE COMPANY OF ONE

NEWS

15 HOW MARINE INSURANCE IS ADAPTING TO AN UNCERTAIN AND VOLATILE WORLD INSIGHT

05 INDONESIA WANTS ITS OWN BULLION BANK

17 WHY PHILOSOPHY AND ENTREPRENEURSHIP?

W W W. SM E . ASI A

S ME & E N T RE P RE NE URS HIP MAG A Z INE is publishe d by B usine s s Me dia In t er na t ional . Is sue s ar e published weekly online at www.sme.asia. All rights reser ved © 202 1 Business Media International.

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EDITOR’S NOTE

Datuk William Ng is Group Publisher and Editor-in-Chief of Business Media International. [email protected] williamngpage



providing lip service to SMEs, providing just enough aid to stop an all-out riot.

WORLD SME DAY June is World SME Day. And this year’s occasion marks a further gap between SMEs and larger multinationals.

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SMEs are said to be nimble and resilient. On the other hand, larger companies are able to deploy capital with relative ease, while attracting top talents that by and large overlook SMEs. The pandemic has changed this perception somewhat. Large airlines – previously thought as less resilient due to their razor thin margins, are suddenly a lot more resilient than we thought. Not because they are structurally stronger, but because many governments see them as ‘essential infrastructure’ and have provided bailouts that could otherwise be deployed to struggling SMEs. This is also true of banks, telcos and even some property developers.

This is an anomaly by all accounts. Empirical data shows that investments in SMEs by governments will result in disproportionately higher returns in employment, GDP growth, long-term sustainability and in achieving the UN Sustainable Development Goals. So why are SMEs often getting the short end of the stick? The answer is simply because it’s easy to ignore SMEs with little political repercussion. There is lack of organisation among SMEs, and it involves a lot more work for governments and civil servants to launch any meaningful intervention programme for such a diverse group of businesses. This is why the UN General Assembly introduced World SME Day in 2017. It’s to remind policymakers about the importance of SMEs, not just to their respective economies but to the world in totality.

We must not let this day pass without reflecting among ourselves the importance of SMEs to economies, to nations and to On the flip side, SMEs are seen as dispens- the world. able. If one collapses, ten will rise to fill the vacuum. This has led to most governments Happy World SME Day! SME & ENTREPRENEURSHIP MAGAZINE IS PUBLISHED BY BUSINESS MEDIA INTERNATIONAL. ALL RIGHTS RESERVED. EDITORIAL ENQUIRIES editor @ smemagazine.asia SUBSCRIPTION ENQUIRIES circulation @ smemagazine.asia MALAYSIA The Campus, 6th Floor, Kelana Parkview Tower, Jalan SS 6/2, 47301 Petaling Jaya, Malaysia [T] +603 7803 0499 HONG KONG Unit 1504, 15/F., Tamson Plaza, 161 Wai Yip Street, Kwun Tong, Kowloon, Hong Kong [T] +852 5808 2366 SINGAPORE 20 Cecil Street, #05-03 PLUS Singapore 049705 [T] +65 3158 9809 THAILAND 331, 331/1-3, The Pilot Building, 9th Floor, Silom Road, Bangrak, Bangkok 10500 [T] +66 2235 0570 / 1

THIS WEEK IN NEWS

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INDONESIA WANTS ITS OWN BULLION BANK

Indonesia, home to one of the world’s largest gold mines, plans to set up a bullion bank to spur trading of the precious metal

MALAYSIA TO FOCUS ON INCREASING RENEWABLE ENERGY CAPACITY

GLOBALFOUNDRIES INVESTS US$4 BILLION IN SINGAPORE CHIP PLANT

Malaysia targets 31 percent renewable energy in installed capacity in 2025 and 40 percent in 2035 as energy transition plan until 2040

US semiconductor manufacturer GlobalFoundries will build a new fab in Singapore amid unprecedented global demand for chips

CTOS SET FOR MALAYSIA’S BIGGEST IPO

Planned IPO to raise RM1.2 billion in Bursa Malaysia’s largest offering of 2021

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ENTREPRENEUR

PRESERVING A UNIQUE CULTURAL HERITAGE

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or many consumers, fast fashion is falling out of style. In turn, sustainable and ethical fashion is in. This trend is based on sourcing local products, made using local materials and employing a local workforce. This week, SME speaks to Vania Wijaya Gunawan, founder of KASEE Batik Activewear. KASEE is one of the new crop of startups aiming to capture that market. Using batik, KASEE aims at preserving an Indonesian culture tradition by redefining the tradition for the modern lifestyle. KASEE’s products are available in Singapore and Indonesia via online stores.

WHAT DID YOU DO BEFORE FOUNDING KASEE BATIK ACTIVEWEAR? I did my bachelor’s in

Accounting at Auckland University of Technology, and subsequently worked as an accountant for 6 months at a garment factory owned by Kiwis. Afterwards, I worked as an auditor at EY Indonesia for 1.5 years. During that time, I realized that I wanted to pursue what I passionately believed in – which was to make an impact in people around me.

WHY ACTIVEWEAR IN BATIK? WHAT INSPIRED YOU TO START? Batik has been embedded

in Indonesian culture for decades. In

addition to being recognized by UNESCO, it is a tradition that needs protection and I was looking at ways on how to bring this about in a way that would also help our Batik artisans. That’s when I decided to look at activewear, which is a growing trend, as I myself am a big lover of sports, and thought to myself, “Why don’t I combine this with Batik?” Batik activewear is new in the industry and and we’re humbled to be the pioneer of batik activewear both locally and

ENTREPRENEUR

globally. By doing this, we hope to bring a new dimension to the batik industry and help batik artisans remain in this business. A time came when I told myself: “There will never be ‘the best time’ for me to be ready to start my own business. But I have to take the courage to start to put my passion into action.”

HOW IS KASEE BATIK ACTIVEWEAR DIFFERENTIATING ITSELF FROM OTHER ACTIVEWEAR BRANDS IN THE MARKET? Our creations are new in the

industry. It combines the traditional batik process with the current trend, activewear. We do understand that there are many products out there contains batik element, but batik by definition itself is a process, not about the motif or a pattern, which is why we do not want to use printed batik.

We did a lot of trial and errors as the fabrics that we use have never been done in batik process. People see this as challenge, we see this as great opportunity to tap on.

WHERE DO YOU SEE THE BRAND IN THE NEXT FIVE YEARS? We want to see KASEE Batik

Activewear as the choice product for Indonesians as well as Singaporeans, Malaysians etc in their lifestyle choices, be it for sports or for leisure. We also hope that via our endeavour, there will be a renewed interest in the traditional batik process, that will in turn, empower local batik artisans. Eventually we see ourselves branching out into overseas markets in targeted countries that have similar appreciation for artisanal products.

GLOBAL ETHICAL FASHION: IN NUMBERS

Global ethical fashion market value: US$6.345 billion (2019)

China’s share of the ethical fashion market in 2023: US$367.1 million

Compound annual growth rate: 8.7 percent since 2015 SOURCE: THE BUSINESS RESEARCH COMPANY

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Market size by 2030: US$15.173 trillion

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COVER STORY

BY ONG XIANG HONG

ach company founder’s entrepreneurship journey is different. Traditionally, many start the company from nothing; some may start from a family business; and latterly, some are children of startup incubators.

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Then, a typical route is to grow the business, find more customers, hire more people, and so on. The goal is to scale the business – growing the company and increasing its revenue through processes, technology, and importantly, staff. But there is a growing trend against the idea of ‘growth at all costs’. Many

COVER STORY

BUSINESS IDEAS FOR A SOLOPRENEUR

SOFTWARE DEVELOPMENT

Software developers now work in teams, but not all team members may be from the same company. Outside developers may be brought in for their niche expertise.

Whether its consulting on productivity, social media, fitness, wealth planning – the options are endless. Consulting or coaching has a low barrier to entry, requires little technical work, and is a quick way to get started.

CONSULTING

ONLINE RETAIL

Online stores like Shopee and Amazon make it easy to find the right niche/ market and deliver a good product to customers.

Eye-catching design and copy is more in demand now than ever, especially for websites and brochures. Starting a virtual design agency is a great way to market your work.

DESIGN AND COPYWRITING

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COVER STORY

entrepreneurs are not necessarily in a hurry to grow their businesses to the dizzying heights that their predecessors have done. Instead, a new, sustainable trend is gaining traction, centred around the concept that keeping a business simple and small can bring untold personal and financial satisfaction.

more people, builds more infrastructure, adds more processes, etc. Never mind that ‘more’ often equates to more stress, more problems and more responsibilities. More employees also mean more salaries to be paid, more management needed, more personalities to deal with, and more…well, you get the picture. ‘More’ ends up meaning more red tape, GOING SOLO This new breed of entrepreneur more complexity, more expenses, and more has spawned a new portmanteau: the solo- room for mistakes and misunderstandings. preneur. Like its name suggests, the solThe bigger the company grows, the more opreneur is indeed a person who sets up critical decisions will need to be made. and runs a business of their own. No partWhat’s more, company bosses may ners, no employees, just a one-man show. sometimes need to make hard decisions When one looks at a traditional that will impact employees’ livelihood, and business, it is commonly divided into will inevitably be deeply unpopular. This is where the solopreneur comes in. functions like marketing, sales, finance, Resisting the urge to grow means the ability HR, and the like. A company would have to be more focused in the product offering, different heads of department managing as well as being selective about the types each function, accountable to the CEO. of clients a solopreneur takes on. Staying On the other hand, solopreneurs manage small means concentrating on the audience it all, from marketing to accounts, sales and customer acquisition, right down to the the solopreneur is already engaging with, not that elusive audience that a company execution of the work. owner hopes to win if he or she ‘grows’. It Thus, solopreneurs will never hire means listening to and helping those who a team. Occasionally, they may opt to are already sold on the product, who are outsource work if it is beyond the scale of their abilities, or if the volume of work is too already engaging with the company. Hence, solopreneurs are often much. But by and large, most everything specialists who do one thing, but do that one is done in-house. This will also be part of the attraction for clients – knowing that the thing well. This single-minded focus is what solopreneur’s full expertise and attention is makes their skills or products in demand. at their disposal. But why? Why stay small? Why not go CONTROL YOUR LIFE Being a solopreneur also offers one a true work-life balance. Soloprefor the gold? What about the saying, “go neurs don’t want to build an empire. They big or go home”? want to stick with a smaller, more manageSINGLE-MINDED FOCUS The typical business able business that allows them to make model centres around scaling ‘up’. When most or all of the decisions on their own. a business does well, the owner assumes This means that there is a limit to how that the only way to go is up in order to much work they can take on. With the right get ‘more’. To get ‘more’, the owner hires business model, solopreneurs can choose

COVER STORY

and manage their preferred clients and make the most out of it. There is also no added stress of managing employees or growing a business beyond its means. As the leader of a company of one, the solopreneur alone gets to decide how much money he or she wants. Let’s say, a solopreneur can live comfortably on US$80,000 a year, and he or she can earn this without too much work stress. The solopreneur won’t have to strive for ‘more’ just for the sake of getting more. Plus, the money can be earned without the draining demands of managing a full-scale company. Solopreneurs will need to ask themselves: is growth truly beneficial? Will it change my lifestyle? Will it impact my family? Sure, if more money can be had for less effort, go for it – maybe through added value or new, time-saving processes. This is where the idea of ‘growth’ is sustainable through staying small. Instead of chasing after customers, improving the current offering of products and services, or improving relationships with customers will naturally help growth, but in a more manageable way.

LONG HAUL Nowadays, many entrepreneurs

go into business with an exit strategy. They

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will seek to grow the business – sometimes unsustainably – and look to exit either via an IPO or a buyout from a larger company. Many tech startups are guilty of this. The Silicon Valley version of growth is antithetical to the solopreneur: scale up via customer acquisition, burning cash and leaving gaping holes in the business process (e.g. sub-standard customer service). On the other hand, a solopreneur is intimately familiar with his or her work. Many are content to stick with it until they’re ready to retire. Having said that, there are many solopreneurs that are looking for a buyout, and entrepreneurs that devote their whole life to one passion project. Most of all, solopreneurs are immensely passionate about their work. Sticking with a vocation and making it into a business requires passion – just as with any other business. Like Steve Jobs said at his 2005 commencement speech at Stanford University, “You’ve got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do.”

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THIS WEEK’S FOCUS

INDONESIA’S BLOCKBUSTER SUPERAPP MERGER BY JENNIFER LEE

he blockbuster merger of the year isn’t happening in China, the United States, or even Europe. It’s happening right here in our backyard. Two of Indonesia’s largest tech startups, Gojek and Tokopedia, announced they will merge and look to go public this year, a move that will create one of Southeast Asia’s biggest tech conglomerates and cover everything from ride hailing and digital payments to e-commerce.

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The new company will be called GoTo, with a total valuation based on past fundraising rounds of about US$18 billion. The new superapp would have handled more than 1.8 billion transactions with a total gross transaction value of more than US$22 billion last year, or around 2 percent of Indonesia’s GDP. It will have a registered driver fleet of over two million and over 11 million merchant partners as of December 2020. It also claims to have over 100 million monthly active users.

THIS WEEK’S FOCUS

A SHIFTING LANDSCAPE The Gojek-Tokopedia

merger will reshape the competitive landscape of the region’s tech scene, which will now primarily be based around a threeway battle between Singapore-based Sea, Grab and the newly formed GoTo Group. With their natural synergies, GoTo will create an almost complete technology ecosystem in Indonesia, a superapp operating on a scale rivalled only by China’s Tencent and Alibaba. The top leadership of GoTo will also be packed with Gojek and Tokopedia execs. Andre Soelistyo, Gojek’s co-CEO will become the group CEO, while Tokopedia President Patrick Cao will serve as group president. Under GoTo, Gojek and Tokopedia will remain separate entities, where Kevin Aluwi will continue as CEO of Gojek and William Tanuwijaya will remain CEO of Tokopedia. GoTo will be acting as a holding company for Gojek and Tokopedia, along with the new payments and financial services brand of GoTo Financial. Each component of GoTo will be acting “with heavy emphasis

on how... to create better innovation and better synergies for our collective users, merchants, and drivers,”, said Soelistyo at an online press conference. Gojek and Tokopedia have at least three investors in common: Sequoia, Google and Temasek. GoTo’s major investors will include Astra International, BlackRock, Facebook, JD.com, KKR, PayPal, Provident, Telkomsel, Tencent, Visa and Warburg Pincus. “Gojek drivers will deliver even more Tokopedia packages, merchant partners of all sizes will benefit from strengthened business solutions and we will use our combined scale to increase financial inclusion in an emerging region with untapped growth potential,” said Soelistyo. “For the consumer, GoTo Group will continue to reduce frictions and provide best in class delivery of goods and services. This is the next step of an exciting journey and I am humbled and proud to lead the Go To movement,” he further explained.

SEA Internet economy GMV +24%

309 Online Media Online Travel

US $_B

Transport & Food e-Commerce

+5%

100

105

2019

2020

32 2015

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2025

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THIS WEEK’S FOCUS

THE OTHER ELEPHANT IN THE ROOM GoTo’s

rivals will not be taking the merger lying down. Grab, Gojek’s ride-hailing arch-rival in Indonesia, is preparing for its own listing on Wall Street, valued at US$40 billion. The union may spur an alliance between Grabbacked digital wallet Ovo and Ant-backed Dana in an effort to capture the hand of Indonesia’s e-wallet market. Gojek initially held merger discussions with Grab last year, but the deal collapsed due to strategic differences and boardroom control issues. Potential antitrust ramifications also hung like a cloud over the Grab-Gojek merger, as indicated by both Indonesia and Singapore’s top competition bodies. In the e-commerce arena, Sea-backed Shopee is making aggressive inroads into Southeast Asia’s fastest growing market. In 2019, Tokopedia was the most visited e-commerce website in Indonesia, before being overtaken by Shopee in 2020. Shopee’s gross merchandise volume in 2020 alone hit US$35.4 billion, piggybacking on the exponential adoption of online shopping when COVID-19 had forced everyone indoors. ShopeePay, Sea’s digital payments arm has also quietly risen to become one of the leading e-wallet operators in Indonesia today. According to a survey by shopper analysis firm Snapcart conducted in March 2021, ShopeePay has been used by 76 percent of the respondents, followed by Gojek’s GoPay (57 percent), Ovo (54 percent), and Dana (49 percent).

DIGITAL NOW GoTo’s inception highlights the

huge potential of Indonesia’s digital economy, which is poised to reach a gross merchandise value (GMV) of over US$300 billion by 2025 according to a report by Bain & Co.

GoTo also highlights the difficulty of competing in such a huge market without significant scale. To continue its growth in Indonesia, Gojek’s leaders (and shareholders) were under pressure to merge with a larger rival. After getting jilted by Grab, its marriage to Tokopedia makes slightly more sense. They operate in different verticals, and are unlikely to attract the same scrutiny from regulators that Grab-Gojek would have. Tokopedia is also facing issues of its own. Once the undisputed king of Indonesia’s e-commerce sector, it was dethroned during the pandemic by Shopee. Failing to move fast enough when most of Indonesia was stuck at home, Tokopedia lost ground to an aggressive campaign by Shopee to court customers as well as sellers. Backed by Sea, which has a large gaming-funded war chest, Shopee can afford to burn cash in the short term to achieve scale. GoTo’s merger in seemingly unrelated but synergistic markets paves the way for it to launch as a superapp, something which both Grab and Shopee lack. In other words, GoTo could be an all-embracing platform for everything from ride-hailing to food delivery, digital banking to e-commerce, and mobile payments. Such an entity could also follow the Chinese superapp model – expand its market share and pursue profitability by offering complementary services within a single ecosystem. Whatever the case, GoTo, Grab, and Sea are landmarks of a generation of Southeast Asian technopreneurs. The region’s digital transformation could not have happened without them, and what they herald for the new digital economy remains to be seen.

THIS WEEK’S FOCUS

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DIGITISATION AND DATA:

HOW MARINE INSURANCE IS ADAPTING TO AN UNCERTAIN AND VOLATILE WORLD BY OLIVER MILOSCHEWSKY

id you know that the maritime industry played a critical role in Singapore’s rapid development to become the leading regional insurance hub, and continues to play a key role in driving the country’s economy? The industry is significant, contributing 7 percent of Singapore’s GDP and employing 170,000 people. And, it is undergoing a seismic transformation. Take the recent events with the Ever Given in the Suez Canal; the pandemic; the increasing frequency of cyberattacks on vessel systems; climate change and how this is impacting trade routes; the New Silk Road and global blockchain initiatives. The list goes on. Today’s maritime industry faces a myriad of unprecedented challenges and events. These events cannot be quantified based on experience or historical approaches. The industry is in uncharted waters. Supporting the entire maritime industry is, of course, the marine insurance market, which underpins the foundations of global trade. Society simply wouldn’t function without it. This critical industry, whilst grappling with the changing face of risk, is also confronting significant pressure on profitability. This is one of the main drivers leading marine insurers to embrace change.

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So, how is the world of marine insurance adapting to stay afloat in the face of this strange new world? What has come into sharp focus is the urgent need to rethink the traditional operating model of marine insurance. Until now, the industry has relied upon the knowledge and experience of underwriters to make judgements on the risks that they are being presented with and what price should be charged. In the case of SMEs, where marine insurance is en route to becoming fully automated, rather than individual risk decision-making, underwriters are instead required to strategise which segments of the market the insurer should participate in. However,

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THIS WEEK’S FOCUS

whether it’s SME or complex marine risks, relying on the knowledge and experience of the underwriter alone to make these decisions simply doesn’t cut it anymore. Underwriting has often been described as an art where good judgement and decision making is exercised. Yet, there is a limit to the amount of information and knowledge that one person can retain and recall. With data analytics becoming increasingly accessible, there are significant advantages that can be gained from its use. One great aspect of algorithms is that they process significant amounts of information in a short period of time. In marine insurance, this means that, rather than relying on a handful of rating factors, we can now process hundreds or thousands of factors, many of which are new to us and are all based on behaviours. Correctly utilised, these algorithms can predict risk better than ever before. So, how should we harness the potential of this new technology? Perhaps we can learn a thing or two from Formula 1 teams. In this sport, every aspect of the car, the environment and the competition is measured with the highest accuracy and detail, millisecond by millisecond. Everything from pressure, temperature, energy recovery, cornering speeds, top

speeds – the sheer volume of data available is impossible for a single engineer to process. Instead, the teams have developed sophisticated algorithmic tools to process the data, establish trends, measure against their race plan and support the driver. But ultimately, it’s the driver who makes the final decisions. It’s the driver who judges the corners, pushes on competitors, brakes, accelerates and races using their own judgement and experience. In the same way, by harnessing the power of data analytics, underwriters remain the ultimate decision-makers, exercising their judgment based on a far larger amount of information. This results in a much stronger and surer bet. It gives them the superpowers they need to survive unpredictable market conditions, and thrive. It now rests with Asia’s marine insurers to step bravely into this new data-driven world and take advantage of the mass of information at their fingertips to drive more efficient and profitable decision-making. To survive or thrive? Either way, insurers can no longer afford to ignore that digitisation is the future. Oliver Miloschewsky is client development director at Concirrus, a marine insurtech company.

Daily dose of analysis & insights for energy sector.

FELD THOUGHTS

WITH BRAD FELD

INSIGHT

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WHY PHILOSOPHY AND ENTREPRENEURSHIP?

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ietzsche? For entrepreneurs? In reading Nietzsche, we noticed ideas that reminded us of situations, questions, and concerns that frequently arose in our entrepreneurial and venture investment experience. Nietzsche had a way with words, and we found that some ideas were nicely encapsulated and phrased. We started playing with expanding upon his pithy aphorisms and gathering stories from entrepreneurs, and it clicked. My first company, Feld Technologies never became a disruptive company, despite our ambitions. It plateaued at around US$2 million in revenue before we sold it in 1993. Because we had built a solid foundation for a certain kind of success, we never again hit a deep low point, and consequently never again had the painful opportunity to rethink our premises. Nietzsche—sitting or walking alone, in pain, almost blind—thought deeply and managed to share these thoughts with the world. We tried to follow his lead, thinking hard and pondering additional angles and situations to which the quote might apply. We want you to do the same, as you keep in mind that Nietzsche’s works have been highly influential throughout the 20th century and into the 21st. In business and entrepreneurship literature, inspiration is sometimes more helpful than instruction. We push you to think about what you and your enterprise are made of. We expect you to question and ponder these ideas, not just put them into action. If we are successful, you will sometimes get angry and at other times feel pride. At times you will

wonder what you really know, and at other times you will charge forward. We hope that the combination of Nietzsche’s colourful language, our elaborations, and some stories from entrepreneurs will offer you intellectual, emotional, and entrepreneurial inspiration. Nietzsche was not a fan of commercial activity or businesspeople. He saw the former as crass and the latter as lacking nobility. However, we suspect that if Nietzsche were alive today, he would view entrepreneurs differently. He adored intensity and fervour, deeply valued those who create things, and wrote at length about “free spirits” who do not feel bound to tradition or cultural norms. Nietzsche viewed his mission as the “revaluation of all values,” and he intended to disrupt the entire moral tradition of Europe in the late 19th century. Brad has been an early-stage investor and entrepreneur since 1987. Prior to co-founding Foundry Group, he co-founded Mobius Venture Capital and, prior to that, founded Intensity Ventures. Brad is also a co-founder of Techstars.