Speech by DPM and Minister for Finance Heng Swee Keat at the Grand Opening Ceremony of Shopee Headquarters Building on Tuesday, 3 September 2019
Mr Forrest Li, Chairman and Group CEO of Sea,
Ladies and gentlemen,
Good morning everyone. Let me extend my heartiest congratulations to Forrest and the Shopee team, on the opening of your new headquarters here at the Science Park.
Since its founding four years ago, Shopee has grown rapidly to become one of the top three e-commerce players in Southeast Asia.
From your base in Singapore, you have expanded to six other markets in the region, including Indonesia, Vietnam and the Philippines.
This tremendous growth is reflected in your sales figures. Gross merchandise volume increased by more than eighty times, between the fourth quarter of 2015 and the fourth quarter of last year.
Shopee is currently the most visited e-commerce platform in Southeast Asia and many parts of Asia, averaging more than 200 million visits per month. The opening of your new headquarters today marks another important milestone in the company’s development.
The new headquarters stands as a concrete affirmation of what Shopee has done right over the past four years – taking advantage of the many opportunities in Southeast Asia, and staying ahead of trends in the digital economy. It is also a commitment to Singapore as a base for your operations, and a vote of confidence in the strengths of our economy.
Harnessing the potential of the Southeast Asian digital economy
Shopee’s growth story is very much aligned with our broader strategy for growing the Singapore economy. This is why we have been working closely with companies like Shopee to help them expand operations in Singapore, to harness new opportunities in the Southeast Asian digital economy and to ultimately provide better jobs for our people.
The Asian Financial Crisis, which engulfed many economies in Asia happened just over 20 years ago. Since then, governments and businesses in our region have been making important reforms. Of course, the work is never completed – there are always more than we can do to enhance the resilience and vibrancy our economies. But for Asia and Southeast Asia, the potential is promising. Shopee’s rise to prominence coincides with the region’s strong economic growth, and the use of the digital economy.
A recent study by Google and Temasek found that the digital economy in Southeast Asia has more than doubled in value, from US$32 billion in 2015 to US$72 billion in 2018.
The same study projected that the Southeast Asian digital economy will further triple in value, to US$240 billion by 2025.
E-commerce, as the fastest growing segment of the digital economy, is likely to account for much of this growth. This segment alone is estimated to exceed US$100 billion by 2025.
This rapid growth is driven by two factors.
First, the rapidly expanding middle class in Southeast Asia. In the next three years, the middle class in Southeast Asia is projected to increase by 50 million, to 350 million people.
Second, the fast growing number of internet users in Southeast Asia, with nearly four million new users every month.
The greater spending power of a growing middle class, coupled with higher internet usage, will drive the growth of the digital economy.
Hence, even though consumer confidence is expected to weaken in the near term due to the global economic slowdown, the longer-term outlook for Southeast Asia is still bright.
Positioning Singapore as a Global-Asia Node
The rise of Southeast Asian and Asian economies brings opportunities, and we must position Singapore well to harness them. We have to constantly strive to ensure that companies like Shopee, doing business across the region, will continue to see Singapore as an ideal base for serving the region.
With Singapore’s strong links to the global business community, companies in the region can also look to Singapore as a good springboard to go global.
We strive to serve as a Global-Asia node – in linking the world to Asia and Asia to the world. We are enhancing our value to the business community in various ways.
For example, we are enhancing Singapore’s connectivity to global supply chains, both physically and digitally.
We are negotiating Digital Economy Agreements to complement our existing Free Trade Agreements, by encouraging cooperation, and establishing common standards in areas such as e-invoicing, e-payments, digital identity and AI.
We are currently pursuing a pathfinder Digital Economy Partnership Agreement with Chile and New Zealand, and are also working with Australia on digital economy initiatives.
Our multilingual and multicultural society also gives us an advantage.
From an early age, Singaporeans develop the necessary confidence and competence to operate in culturally diverse environments.
This is very relevant for Southeast Asia, where cultural norms can differ significantly, not only between countries, but also between different regions of the same country.
Taken together, these factors have helped companies that are riding on the digital economy, like Shopee, to grow strongly.
Singapore has four “unicorns” today – private companies valued at more than US$1 billion – including two “decacorns”, Sea, Shopee’s parent company, is one of them and it is valued at more than US$10 billion.
All these companies, and more, have successfully used Singapore as a base to serve Southeast Asia and the world.
Strengthening enterprise capabilities
These are some of our clearest success stories, but our goal must also be to strengthen capabilities across the board. The “broad middle” of our companies must also stay ahead of the competition and seize emerging opportunities in the digital economy.
To do this, we have to take a long-term view. Capabilities cannot be built overnight.
This is why we have been investing heavily in research and development (R&D), to seed new and exciting capabilities for our economy. As part of the mid-term review of our Research, Innovation and Enterprise 2020 Plan (RIE 2020) in March this year, I announced that we would allocate additional funding for key areas.
One key area is in the digital economy. We allocated a further $300 million for R&D in the Services and Digital Economy domain, almost doubling the previous budget. This will accelerate our capability development in frontier technologies, such as AI and cybersecurity.
As the global economy goes increasingly digital, the importance of these technologies cannot be overstated.
On top of investing in R&D, we are also partnering with industry to build deep capabilities in these domains.
AI Singapore’s 100 Experiments (or 100E) is a good example. This programme brings Government, academia and industry together, to work on AI solutions.
AI Singapore provides research, engineering and funding support. The goal is to develop AI capabilities in a nimble manner, specific to the needs of our industry partners. The projects are done within a short time frame, of 9 to 18 months.
As the name suggests, we initially aimed for 100 projects. But the demand has been very strong, with more than 300 companies expressing interest. 40 projects have been approved so far, and some are completing soon.
Our partnerships on frontier technologies is one component of our plan to transform entire sectors.
Industry transformation is one of the key thrusts of our economic strategy. This is necessary to make sure that our industries can stay competitive in the future economy.
In fact, Forrest and I served together on the Committee on the Future Economy (CFE). And Forrest contributed much in charting our economic future.
Creating good jobs for our people
Our efforts to grow our digital economy, transform our industries, and build new capabilities are wide-ranging, but our overarching intent is clear.
Ultimately, these must translate into good jobs for our people. And in turn, we must ensure that our people have the skills and competencies to access these jobs.
This is not easy. Our workers will have to adapt to change, learn new skills, and take on new roles. Helping our workers succeed is a tripartite effort – between Government, companies, and employees.
But there are reasons for us to be optimistic. The infocomm and media (ICM) sector remains an area of strength in our economy. The demand for ICM professionals is projected to grow, not just in Singapore, but across the region.
Existing initiatives under SkillsFuture and Adapt and Grow have shown good results. The training and job placement programmes under IMDA’s TechSkills Accelerator (TeSA) are also paying off.
These initiatives help our workers upgrade, and take advantage of new jobs being created in the digital economy.
What I have highlighted are our efforts in one area of our economy. We have also taken a similar approach for other industries.
Shopee is one company that has shown its commitment to create good jobs for Singaporeans, upskill your employees, and uplift the wider industry in the process.
Over the past four years, Shopee has hired more than 1,000 people in Singapore. With your new headquarters, you will be able to accommodate up to 3,000 employees. I understand that 1,500 employees have already moved in. You have people in many diverse roles. Let me cite two examples.
Michelle Wong is part of Shopee’s HR team. She has a background in history. As Shopee sought to go digital in all aspects, including in HR, Michelle learnt to run python scripts to optimise HR reporting. Today, she is also building a data and analytics team for HR.
Evelyn Ng is a fraud analyst in Shopee’s regional operations team, with a major in business analytics. Today, she also helps fresh graduates, many with no coding experience, gain the digital skills they need to excel in their jobs.
Both Michelle and Evelyn credit their ability to build new skills and nurture skills in others, to Shopee’s commitment to provide learning opportunities for all its employees.
Shopee is also working with Digital Industry Singapore (DISG) to develop our tech talent.
Shopee has committed to train more than 100 employees under TeSA, to become software engineers and data analysts.
Shopee has also partnered EDB and our universities under the “Shopee Postgraduate Programme” to nurture data scientists at the postgraduate level.
Earlier this year, Shopee also organised a National Data Science Challenge. More than 5,000 students and working professionals participated. And I am sure many of them gained new skills and new experiences, and I think some of them will join you at some point.
Shopee’s investments in Singapore and our people are commendable. I hope more companies will do likewise – leverage our growing tech ecosystem, expand beyond our shores, harness new opportunities, create good jobs for our people and enable them to learn new skills to undertake these jobs.
In closing, I would like to congratulate Shopee on the development of your new headquarters. Your growth in the last four years has been tremendous, and I wish Shopee every success in the years ahead.
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