What’s in store for businesses in 2020

Five business leaders share their outlook for the economy and their industries in the coming year

Businesses hoping for a smoother start to the new year after the volatility of 2019 would have been left disappointed. Whether it was the ratcheting up of US-Iranian tensions, raging bushfires in Australia, or a potential healthcare crisis in China, things seem to have picked up exactly where they left off.

Amid the gloom, however, there are, as always, opportunities for nimble companies. To get a better grasp of what to expect in 2020, we spoke to five business leaders on their outlook for the coming year.


Kurt Wee, Chairman of the SME Committee, Singapore Business Federation (SBF)
Eilynn Lew, Founder Eilumina Resources (sanitaryware products supplier)
Gideon Lam, CEO of Shalom International Movers (logistics)
Jeames Cheow, CEO, Capital C Corporation (Digital financial services)
Chia Kim Huat, Regional Head, Corporate & Transactional Group, Rajah & Tann Singapore LLP (Legal)

What is your outlook for your sector and the Singapore economy in 2020?

Kurt Wee: 2020 is projected to be another volatile year for business and economies. Although the trade war since 2018 saw inventory buildup and order cutting from customers, the inventory situation generally worked itself out in Q2, 2019. The Singapore economy for businesses is generally quite flat to bad. But it’s not dire yet. In 2020, you will need to be very conservative and look out for any upside, or negative, catalyst. If there is an upside catalyst, businesses have to very quickly catch on to it.

Eilynn Lew: 2020 will be a very challenging year. The construction industry has been facing a tough time for some time now due to the government’s efforts to curb property prices. Most of the jobs now are for bigger projects. There are also too many players fighting for the same piece of cake.

Gideon Lam: We are anticipating the global and Singapore economy to enter a period of vulnerability with uncertainties caused by geopolitical trade tensions and risk from trade rows that may have shaken the confidence of both businesses and customers. In this respect, we are experiencing slower movement in housing transactions that impacts the rate of moving within Singapore. However, we are looking at a positive growth rate in relocations as Singapore is still an attractive country to invest in and relocate to.

Jeames Cheow: There were concerns that trade-dependent Singapore would slide into recession in 2020, but the improvement in the economic climate as well as improving relations between US and China seems to have positioned 2020 as a year of stabilisation.

The outlook for the financial sector also looks bright and resilient in 2020. Because of the ruggedness of the domestic labour market and low unemployment rates, bite-sized demand for liquidity will continue to be prevalent, while low NPLs (non-performing loans) will ensure healthy cycles of borrowing and repayment. The move by MAS to issue digital bank licences will also help to enhance public acceptance towards digital banking services, which is beneficial to us.

Chia Kim Huat: The trade war between US and China is expected to continue, and trade and major investments in Southeast Asia are likely to be affected. This may lead to M&A opportunities as the market continues to reposition and consolidate, and the RECP (Regional Comprehensive Economic Partnership), if signed, may bring about new opportunities for Singapore companies. This increased trade and investment activity would lead to more corporate transactions and disputes for the legal sector.

What do you see as the key risks in the macro environment in the coming year?

Kurt Wee: Given the continuing trade war between US and China, we expect that the China demand is not going to come back. This is coupled with increased volatility from rising US-Iranian tensions. So things are going to be quite volatile, and businesses should go to markets where they can not only find demand, but also have less politically-driven volatility.

Eilynn Lew: The trade war between the US and China and the outcome of Brexit are the two key risks. Manufacturers in Southeast Asia are reaping the rewards of companies getting out of China in search of alternatives. While this is a good sign, we are not sure how long this will last. As for Brexit, the pound has remained very low since the start of the start of this episode and projects have been put on hold. Hopefully, there will be a conclusion to Brexit soon.

Gideon Lam: One key risk involves service regulations not being enforced in the logistics and moving sector, resulting in a low barrier of entry and a higher threat of new entrants. This may in turn lead to a price war and inconsistent service levels that will create market turmoil. Thus, we have been looking into other areas to strengthen our core business, such as forming strategic partnerships with SBF and other logistics industry associations to improve our market stability.

Jeames Cheow: The key risks are the fragility of the external environment and the prospect of anaemic global growth. However, we view these risks as controllable in Singapore and ASEAN due to the resilience of the major pillars of growth – such as labour, property, exports and investments – in the region.

Chia Kim Huat: Countries may adopt protectionist measures and more companies and individuals may be put on sanction lists. The increasing risk of a bipolar world may force countries to take sides, and this may lead to a reduction in trade and investment volume for neutral countries like Singapore. The rise of populist politics may also force governments to focus on short-term needs at the expense of long-term sustainable policies. Cross-border movement of trade, investment, financing and people may consequently be affected.

What particular challenges are companies in your industry facing and how is your organisation preparing for them?

Kurt Wee: I’m involved in investment in the biotech space, which happens to be an industry on the upswing. So I am not particularly impacted because it is an industry of now and the future, and it continues to grow. There is demand for a lot of the work that we do, which is R&D in biotech, and then translating that into applications for people’s needs.

Eilynn Lew: We are very much exposed to the UK as it is one of our traditional markets. The outcome of Brexit will determine how our 2020 will play out. With or without Brexit, however, we believe that the UK economy is ready for rebound.  As around 70% of our current business is in the UK, we are looking to expand in Southeast Asia with help from the government.

Gideon Lam: Some of the key challenges include changing customer expectations, technological breakthroughs, horizontal collaborations and an aging workforce. As technology is advancing at a rapid pace and with rising omni-channel competition, our company has to upgrade the skills of our staff. We have also overcome the issue of an aging workforce by offering job redesign through our collaboration with various agencies and tech companies to enhance career continuity.

Furthermore, we are transforming our human resource capabilities so that our staff can embrace the changes ahead with ease. In this regard, we are receiving support from government agencies such as Workforce Singapore, SkillsFuture Singapore and the Institutes of Higher Learning. They are a rich source of young and mid-career talents.

Jeames Cheow: For a long time, new market entrants found it difficult to break into the financial services industry. However with the proliferation of technology in recent years, fintech disruptors have been finding a way in. Rather than re-invent the wheel, we are working with relevant fintech partners to fill the gaps in our processes.

Meanwhile, new technology has driven unprecedented advances in efficiency. In the coming months, we will be rolling out our new digital loan application platform where customers can easily submit their loan applications online, anytime, anywhere. We have also been working on enhancing our proprietary algorithmic credit scoring platform that will analyse smartphone behavioural data and other alternative data sources to determine credit-worthiness. Cyber-security is another key risk that we seek to mitigate by taking preventive measures, such as working with a trusted cyber-security partner.

Chia Kim Huat: Technology has brought about a new wave of non-legal companies practicing law under the guise of documentation outsourcing, legal research services, and software-enabled due diligence. These self-help tools may replace some traditional services offered by legal practitioners. Law firms would have to expand beyond the traditional scope of legal services and also provide technology-related products and services. To this end, we have set up Rajah & Tann Technology to combine legal and tech talents to provide new integrated products and services.

Where do you see future opportunities for your organisation coming from?

Kurt Wee: Growth opportunities are really everywhere. You can’t approach it from the perspective of identifying the growth properties and going there. So it’s really about how you reinvent yourself and create your opportunity. In the macro-environment, there are always opportunities as long as there are human needs. Geographically, Southeast Asia is up and coming, but you must have the skillset to be able to handle the diverse nature of the region in order to succeed, and Singapore is a good base for you to build those skills.

I am also still very optimistic about China, especially the Chinese consumer story. I think if you position yourself correctly, the China market can be a very scalable and profitable market.

Eilynn Lew: Instead of going to popular markets like the US or China, we are focusing on building our brand in Southeast Asia, which is quite a big market. Vietnam is booming, and Myanmar could be ready for its next spurt of growth, depending on the outcome of its forthcoming elections. Meanwhile, Malaysia is stabilising after its political upheavals.

Gideon Lam: We have evolved over time to become more than a moving company. I see lots of growth opportunities in internationalising our business and working with strategic partners both within and from outside our industry. Singapore companies are choice partners for overseas firms who want to grow their businesses globally, as we are strong in providing human capital and branding.

Also, by using the insights gained from IMDA’s digital acceleration index, we have a good sense of where we are now, as well as the future innovations that can be incorporated into our growth strategy.

Jeames Cheow: Their sheer size, coupled with extremely high mobile and digital adoption rates among its millennial population, makes emerging markets in the region very attractive to us. Our first foray into the region is in the Philippines, where we target to be operational by Q1 2020. Concurrently, we are already in talks with potential partners in Malaysia and Vietnam.

Another opportunity for us are the millennials, who are generally more receptive towards digital products and services. A large pool of under-served customers still exists in Singapore and the region in the strata between bank financing and unsecured lenders.

Chia Kim Huat: In a bipolar world, countries would have to look primarily within their trading bloc for business as well as third-party neutral markets. Singapore and Southeast Asia are well-positioned to be possible neutral markets. Southeast Asia also has a large and growing middle-class population. Rajah & Tann has a presence in nine out of 10 ASEAN nations, with a substantial presence in each country with full-service capabilities. We are likely to benefit from the new growth opportunities available in ASEAN.