Regulatory issues a key hurdle for Singapore firms eyeing international expansion, finds survey
SINGAPORE (Jan 15): Despite being “global natives” – companies which expand into international markets rapidly, often within the first year of their existence – Singapore’s online businesses appear the most pessimistic about their prospects overseas.
This is according to new research conducted by tech and e-payments solutions firm Stripe, which partnered VIGA research to survey over 9,000 founders and executives of online businesses across 15 international markets and more than 10 industries.
Based on the report’s findings, nearly three quarters (74%) of “global natives” in Singapore plan to further expand their international presence in the coming years, with 46% saying they plan to do so dramatically.
More than half or 53% of Singaporean businesses selling internationally reported having expanded to new countries within their first year of establishment.
Yet, survey participants from Singapore also appeared the most pessimistic about their prospects overseas, with a majority 61% believing it was more difficult to run an international business in the present than it was five years ago.
Slightly over half (51%) of these businesses identified regulatory barriers are the greatest hurdle to operating internationally today, followed by increasing protectionism (45%) and government tariffs (45%).
In a press release on Tuesday, Stripe says it finds this surprising given Singapore businesses’ global orientation and how globalisation is crucial for smaller domestic markets such as Singapore – which the firm suggests could be linked with the correlation between the speed of a business internationalising and its overall success.
Stripe also highlights how inconsistent regulation and compliance rules across the world appears to be driving up operating costs for businesses; in Singapore alone, 39% of survey participants selling internationally claimed to spend between $68,800-$137,800 annually on compliance and regulatory issues.
Most respondents in Singapore also say this amount has been increasing – with an even higher proportion (61%) of executives spending weeks and months, versus days, on these issues compared to their international counterparts.
“With its tradition of international trade, Singapore businesses today are leading the way in leveraging the internet and borderless technology services to reach new markets. However, outdated financial and regulatory barriers are still slowing down innovation and growth for businesses embracing that global outlook,” comments Piruze Sabuncu, head of Southeast Asia and Hong Kong at Stripe.
