SINGAPORE (Oct 9): Ken Koh, the group CEO of Singapore-based logistics firm Yang Kee Logistics, knows the challenges of expanding overseas.
Set up in 1990, the company currently has a presence in 12 markets and is looking to further grow its footprint in the region.
However, small and medium sized enterprises (SMEs) in the logistics space often face a number of speed bumps in their expansion plans.
The challenges range from lack of access to trade financing solutions and operational inefficiencies from paper-based and manual processes, to lack of supply chain traceability, as well as payments and collection inefficiencies.
“Expanding into new markets is always challenging, we lack market knowledge and understanding of regulatory requirements,” Koh shares.
To help Singapore-based SMEs in the logistics sector overcome expansion challenges and stay ahead of evolving consumer consumption patterns and emerging business trends across Asia, DBS Bank on Wednesday launched a digital logistics solutions package for SME customers in the space.
The DBS digital logistics solutions package will have digital solutions powered by real-time APIs called DBS RAPID.
The solutions include supply chain financing and traceability, real-time trade financing application, and funds settlement directly through their ERP or internal systems. It also includes instant payment collections and refund via the customers’ online portal, mobile app or DBS MAX.
And Yang Kee has become the first logistics SME here to sign up for the package.
“Partnering with DBS gives me the confidence to take our regionalisation plans to the next phase,” Koh says.
Main image (above): Yang Kee Logistics’ chairman and founder Koh Yang Kee (right) with DBS' group head of Institutional Banking Tan Su Shan.
As the Singapore market becomes more saturated and profit margins get tighter, DBS says more SMEs in the logistics sector – which contributes some 7% to Singapore’s GDP – are looking to expand overseas.
By growing their footprint regionally, they will be able to broaden their customer base and grow their revenue, the bank adds.
“The needs of SMEs in the logistics sector are diverse as they have to keep their eye on everything from inventory, timing of goods shipped and received, cash flow and expansion needs,” says Joyce Tee, group head of SME Banking at DBS Bank.
“As a responsible banking partner, we want to provide a greater selection of solutions that will help them grow their footprint,” she adds.
According to report published earlier this month by Google, Temasek Holdings and Bain & Co, Singapore’s e-commerce is set to triple in value to US$7 billion ($9.7 billion) in just six years.
This is in tandem with rapid growth across Southeast Asia that will see the total internet economy in the region reach a whopping US$300 billion by 2025.
However, a DBS survey conducted earlier this year found that 55% of SMEs cited the lack of market knowledge and understanding of regulatory requirements as the main challenges of overseas expansion.
In addition, close to a quarter of respondents said that they could not find the right partner to collaborate with.
“Customers looking to expand overseas need more advisory services and solutions and we are here to help them make the first step. We hope to make banking simpler and more seamless for our customers, so they have a more structured approach to their regionalisation plans,” says Tan Su Shan, group head of Institutional Banking at DBS Bank.