More Singapore businesses are looking to set up shop or expand in the United States, drawn by the potential for growth and the vast customer base in the world’s largest economy.
Enterprise Singapore helped 190 companies to explore the US in 2022, up from about 130 in 2019 – a jump of nearly 50 per cent.
Mr Clarence Hoe, EnterpriseSG executive director for the Americas and Europe, said that the Covid-19 pandemic prompted some companies to look at markets that were farther away.
“Some markets were closed, and there were also more opportunities to reduce distances,” said Mr Hoe in an interview with Singapore media in March. “Time zones don’t change, but at least you can stream your call. So more companies started to look at diversifying.”
Singapore companies in financial technology, biomedical sciences, sustainability and renewable energy are especially well-placed to compete in the US, given Singapore’s strength in those sectors and the huge market in the US for such products, he said.
But because the US market is so competitive, companies that seek to venture there must be clear about what sets them apart from their many rivals, said Mr Hoe.
The flip side, he added, is that even niche markets can have millions of customers, as the US is such a populous and diverse country.
The US has a population of about 330 million.
Finding a niche in a dog-eat-dog world
Singapore companies in the US tend to position themselves as reliable, with high-quality service or products, while being to an extent cheaper than their competitors, said Mr Hoe.
One company that made the leap was Pawjourr, a marketing platform that connects brands with pet influencers – content creators who use their pets to promote businesses.
“From the start, we were already a global business, because you can’t differentiate a husky in Singapore from a husky in the US,” said chief technology officer Navaneeth Sreekandan.
“That’s the great thing about pet marketing, you’re not limited by geography.”
As long as you have a pet that the Internet finds endearing and spawns followers, content can be created from anywhere in the world, he said.
Still, chief executive Jane Peh said the company had considered relocating to the US since 2019, as many major brands and manufacturers are based in the US, where people spend more than US$100 billion (S$133 billion) a year on their pets.
Pawjourr’s three co-founders finally moved to New York in April 2022.
But, even though they were in the country, the newcomers found it an uphill road to establish themselves.
“One of the main challenges when we first started… was there was a lot of mistrust,” said Ms Peh. “People were very sceptical because we weren’t a local company.”
The team worked hard to establish their credentials, meeting clients at networking events and personally messaging influencers – all while staying up long past midnight to keep up with operations in Singapore.
What helped them succeed was their focus on the pet industry, which gave them the chops a more general marketing agency might not have, said Ms Peh.
Pawjourr also won over clients with more competitive prices, which they could afford as their operations team is based in the lower-cost Asia-Pacific region.
Now, 65 per cent of Pawjourr’s revenue comes from the US, and more than half of the 20,000 influencers registered on the platform are based in the country.
The company is thinking of expanding to Los Angeles, where many influencers are based.
“It really propelled our growth to the next level,” said Ms Peh. “The company is still growing, because the budgets from American companies are just a lot larger.”
Pawjourr and other companies said they were careful about getting into the US market, dipping a toe in with an online-only presence at first before physically venturing into the country months or even years later.
Fashion brand Love, Bonito (LB) launched its e-commerce website in the US around 2020, and began hiring a small team there only in 2022.
It plans to open a pop-up store in Manhattan’s Soho shopping district this summer, part of its strategy for reaching potential customers and hopefully converting them to becoming fans of the brand.
“As a new brand in a new market where nobody’s heard about us… it’s very different from LB in Singapore, where everybody knows it as a household name. Here it’s like, who are you?” said LB’s North America head Stephanie Seow.
But there is demand for LB’s clothes, said Ms Seow, adding that its US revenue in 2022 grew by 60 per cent year on year.
“We realised that in the US there is an underserved market, which is the Asian diaspora,” she said. “There are a lot of brands from international fashion houses… but there isn’t one really serving Asian women as its target audience.”
LB’s clothes are cut differently, from leg-to-body ratios and even the thickness of the padding on their padded dresses, which makes them more suited to Asian and petite customers and helps set them apart from other Western brands, said Ms Seow.
“We have to be smart and really be laser-focused,” she said. “Instead of going for the mass market, spraying and praying for big success that way, we would rather go a bit more niche.”
Boots on the ground
EnterpriseSG said its support ranged from helping companies set up offices, conduct marketing, or be matched with businesses, to facilitating projects and business discussions for those already in the US. Mr Hoe said the companies’ successes are Singapore’s too, because enterprise growth is another way to grow Singapore’s economy.
“We want our companies to grow big, but Singapore’s market is small. The only way to grow big is to go overseas,” he said.
“The US is just one of the options. We think it’s very good for some segments – those with a clearly defined niche and value proposition and in selected growth markets.”
Mr Hoe added that EnterpriseSG advises companies serious about expanding in the US to have some presence there, and to have the mindset that “what works in Asia doesn’t work in the US”.
For instance, they should get used to the higher costs in the country, as well as the different payment preferences, like US distributors who charge retainer fees, unlike in Asia where distributors are paid fees only upon finishing the job.
Still, several entrepreneurs said that for companies trying to expand in America, it is eventually essential to be there in person.
To help them, EnterpriseSG started the Global Innovation Alliance acceleration programme in San Francisco in 2019, for small and medium-sized tech enterprises and start-ups that want to seize opportunities in the US. More than 60 have taken part so far.
One of them is influencer marketing platform Affable.ai, which expanded to the US in 2021. Its co-founder and chief executive Nisarg Shah said being based in San Francisco put him in the same time zone as his clients, and made him come across as less of an outsider. His physical presence in America also helped focus the team on its US expansion, said Mr Shah.
“If I am here constantly talking about how important the US as a market is for us, the rest of the team is also now channelling that energy.”
Source: The Straits Times © Singapore Press Holdings Limited. Reproduced with permission.
