Singapore infocomm companies eyeing the China market will have to determine their own niche if they are to compete effectively against foreign multinationals (MNCs) and the fast-growing indigenous infocomm industry in the country. This was the advice given by Mr Tan Aik Bing, Director of the Infocomm Development Authority's (IDA's) Shanghai Office. "No doubt the market is big, but the competition is also very keen. It is important for our iLES (infocomm Local Enterprises) to come in with certain products or services in mind and then assess where they can position themselves in this space," he said.

There are about 20 million people in Shanghai alone.

IDA’s Shanghai Office was set up in July 2002 under the Consulate-General of the Republic of Singapore. Its main roles are to strengthen bilateral relationships in the infocomm sector, increase mindshare of Singapore’s infocomm capabilities and promote Singapore’s infocomm industry. The office acts as the intermediary between the Singapore and China infocomm industries and helps to build relationships with the government at the federal, provincial, and city level. The aim is to promote Singapore’s thought leadership in eGovernment, and to build awareness of Singapore’s infocomm capabilities in areas such as finance, transportation and logistics, in the China market.

To promote the Singapore infocomm industry, it works closely with the Infocomm Solutions Centre (ISC) and supports iLES by providing them with market information and facilitating partnerships. “China is a very big market. Shanghai alone has about 20 million people. Different provinces have different ways of doing things, and different cities within China have their unique characteristics. For example, some may be more infocomm-ready and more receptive to foreign enterprises entering their market, while others may be less so. By providing market information or identifying local partners they can work with, we help to shorten the learning curve for our companies,” said Mr Tan.

This is important as competition can be very keen in the China market. “Many MNCs have set up shop and invested significantly in this market, so we will be competing with them. In addition, China has the ambition to build up an indigenous infocomm industry and in fact many of its companies have become global brands. Our companies will also have to compete with these players. This said, Singapore iLES have our strengths. In the eyes of the Chinese, Singaporeans are trustworthy partners and our products are high tech, high quality. There is a market for us if we can find our niche,” said Mr Tan.

Localisation will be key to getting a foothold in China. iLES will have to localise – not just their products but also the mindset. Minimally, the language used in their products will have to be translated into Chinese, and the content and technology may have to be localised as well.

What may be less obvious is the need for iLES to “localise their thinking”. “Singaporeans typically go to a business meeting, make a presentation and expect that the decision maker will say ‘yes’ or ‘no’. Here, the gestation period can be very long, maybe more than a year. You need to figure out who the real decision maker is and work the relationships around the decision maker. It may not be the boss; it may be the assistant to the boss. These are things that you need to figure out on the ground.”

And this is why setting up a presence in the market is so crucial. “It’s important that companies have a physical presence here because of all the relationships that you need to build. If not, you will be seen as somebody who is not so serious. You will need to set up entity, put in some investment and have a track record in order to break through the market.”

And not just any track record will do. Typically, an iLE will need a successful case study that is China-based. There are a few ways that companies can tackle this. One is to work with a local company on a successful project. “That is why we focus on building partnerships, so that we can break the chicken-and-egg problem.” The other way is for iLES to follow their existing customers, for example, the MNCs, who are expanding into China. “Follow your existing relationships with MNCs into China and with that case reference, you can further expand into the market,” advised Mr Tan.