Every year has a few defining moments, and this year so far contained so many paradigm-shifting events that have shaped 2020.
The COVID-19 pandemic has taken up a huge chunk of news headlines for the past months, and it is no exaggeration to say that it has also played a massive role in threatening the survival of startups and businesses.
With the year coming to a close, we have round up the biggest moments that hit the business headlines in 2020:
Virtual Telco Had Its License Suspended By IMDA, Later Reinstated
Image Credit: Zero SG
Launched in 2017, Zero Mobile is Singapore’s second virtual mobile telco after Circles.Life.
However, the Infocomm Media Development Authority (IMDA) suspended its license in March for the failure to “address outstanding billing disputes”. IMDA also blacklisted Zero SG and its directors.
Zero SG’s CEO Glenn Mohammed said that they were taken aback when IMDA “unilaterally and without advance notice” suspended their license over 12 customer complaints.
According to Zero SG, the telco has been working to secure additional investment, restructure its organisation and relaunch its service in conjunction with a system upgrade with partners in Singapore.
These changes were deemed to be “critical” to its project as it would have provided better prices, connectivity and fewer operational issues; ultimately benefiting the consumer.
Amid negotiating and implementing these changes, IMDA’s abrupt suspension of their license has “jeopardised” their project. Negotiations were put on hold, the investment fell through, and it caused damage to their reputation.
While the firm thinks that IMDA’s reaction was “excessive”, they respected IMDA’s decision and apologised for taking longer than they should have to resolve these complaints.
Zero Mobile’s operating license was later reinstated.
Exits: Esprit, Bakerzin, Robinsons, Topshop, STA Travel, Sportslink
Image Credit: Bakerzin / NTU
Fashion retailer Esprit closed all 56 stores across Singapore, Malaysia, Taiwan, Hong Kong and Macau in June. It also wound up its business in China.
According to InsideRetail Asia, Esprit was already facing a major and prolonged slump in sales in the past nine months leading up to its closures and Covid-19 only worsened its situation.
In Asia, store sales had fallen by 48.7 per cent over nine months, then dropped further to 61.3 per cent from March 2020.
UK fashion retailer Topshop and Topman also closed their last Singapore outlet at VivoCity in September to focus on its omnichannel retail strategy as footfall in malls takes a hit.
Additionally, homegrown cafe chain Bakerzin closed all five of its outlets, marking its exit in Singapore last month.
It went into liquidation and owed creditors more than S$41 million, of which S$40 million is owed to its parent company, which had dug deep into its pockets to support the chain’s sluggish business.
Pacific United Holdings decided to pull the plug on Bakerzin after placing its hopes on this year’s mooncake sales but they fell “far below expectations” due to Covid-19.
Also owing creditors is Robinsons, which has made its exit from Singapore for good, following losses in the recent years. According to The Straits Times, Robinsons owes 442 creditors at least S$31.7 million.
Sportslink too was ordered to shut down after accumulating debts to a “substantial number” of creditors.
Meanwhile, STA Travel stopped operating after its parent company in Switzerland filed for insolvency. The statement of the company’s assets and liabilities (as of September 10) showed that it owed S$439,000 to former employees.
Besides staff, as many as 682 customers who are listed as creditors are owed a total of S$635,000.
Sheng Shiong And Zoom: Founders Saw Their Fortune Soar
Lim Brothers of Sheng Siong and Eric Yuan / Image Credit: AsiaOne / Axios
Sheng Siong sells everything from seafood and vegetables to frozen foods through its chain of supermarkets.
When Covid-19 first broke out, many Singaporeans flocked to the supermarkets to stockpile on groceries and household essentials with the fear that supplies will soon run out.
As a result, Sheng Siong’s shares rose to a record high on April 15 — its stock has rallied over 30 per cent since a March 19 closing low.
According to the Bloomberg Billionaires Index, the family’s combined fortune mainly held by CEO Lim Hock Chee and his two brothers, surged to US$1.2 billion (S$1.61 billion).
Even before, Lim has always been in Singapore’s top 50 richest, and his net worth has been gradually increasing each year — from S$345 million in 2012, to S$870 million in 2019.
Also seeing his net worth jumped by 77 per cent to US$7.8 billion in just two months is Zoom CEO and founder, Eric Yuan, who is currently worth US$18.9 billion.
Best known for its video conferencing solution, the US company saw over 2.2 million new monthly users in the first two months of this year.
Following the Covid-19 outbreak, many people were forced to work from home or remotely and used Zoom to help connect them with colleagues and clients on a daily basis, causing its popularity to skyrocket.
This propelled Eric to enter the top 200 richest in the world list. Before 2020, he wasn’t even on the list. However, he has since dropped to 293rd place on the same list.
Zoom now has a market capitalisation value of US$122 billion, up from US$18.8 billion in 2019.
Entertainment Venues Ordered To Close, Reopening Pilot Programme Announced
Image Credit: Marquee Singapore
In March, entertainment venues, covering bars, night clubs, discos, cinemas, theatres, and karaoke outlets were ordered to close with reopening plans uncertain.
Cinemas have since reopened from July 13, but bars, clubs, karaoke outlets and other entertainment outlets were still not allowed to reopen.
Some have decided either to pivot or call it quits after being battered by losses during the pandemic.
While the government has since announced a three-month pilot programme that will allow them to reopen, many are concerned about the impact of strict Covid-19 rules — including mandatory pre-event testing — on costs.
Pubs and bars will have a two-month trial starting from December, while the pilot scheme for karaoke lounges and nightclubs is set to begin in January and last for three months.
Among those that have jumped on the pilot scheme include Cash Studio Family Karaoke, HaveFun Karaoke and K.Star Karaoke.
Apparently, KTV chain Teo Heng is not applying for the programme as they said the costs involved in reopening would likely put a toll on their businesses, depleting their resources faster.
A String Of Data Breaches
Image Credit: Agoda / KrAsia / Slashgear / Reuters
This year saw one data breach after another. Several companies, such as Shopback, Redoorz, Redmart and Razer, were implicated.
Back in September, online cashback platform ShopBack was alerted to “unauthorised access” of its systems containing customers’ personal data and initiated an investigation.
Around the same time, hospitality startup RedDoorz also saw one of its IT databases suffered a breach.
In a statement, it assured that up to that point, no sensitive data pertaining to financial information such as customer credit cards or passwords, was compromised “to the best of its knowledge”.
In that same month, the data of 100,000 Razer customers around the world too had been at risk of being accessed by the public due to a misconfigured server.
The data breach was discovered by cyber-security consultant Volodymyr Diachenko, who said the server was misconfigured for public access since 18 August. He immediately notified the company via their support channel.
However, his message was processed by non-technical support managers for more than three weeks until the data was secured from public access.
Razer has not confirmed the number of customers affected nor officially released an explanation on it.
In November, Eatigo and RedMart also suffered two major data breaches in the same weekend.
Data from 2.8 million accounts of restaurant reservation platform Eatigo — including 400,000 belonging to users in Singapore — was put up for sale on an online forum.
Additional information such as encrypted passwords and partial credit card numbers from 1.1 million RedMart user accounts was also advertised.
Chinese Tech Giants Setting Up Regional Bases Here
Image Credit: Getty and Caixinglobal
ByteDance, parent company of viral video-sharing app TikTok, leased a whopping 60,000 sq ft space in One Raffles Quay.
According to private sources, they are planning to make Singapore its springboard to the rest of Asia as part of its global expansion.
ByteDance already has a presence here in Singapore as they had set up their Singapore team in a WeWork coworking office in December 2018.
Moreover, they have been actively hiring in Singapore on ByteDance and TikTok’s careers pages for a range of positions.
Furthermore, WeChat owner Tencent Holdings has chosen a 200-seat JustCo co-working space in OCBC Centre East at Raffles Place for its first office in Singapore.
The space adds up to 10,000 square feet, or 929 square metres.
On the other hand, Alibaba bought a 50 per cent stake in Shenton Way’s AXA Tower in a deal valuing the property at S$1.68 billion (US$1.2 billion).
Alibaba and Perennial Real Estate Holding Ltd., will then create a joint-venture to redevelop the 50-storey building.
“Singapore is an important market for Alibaba,” said a spokesman for the company.
“This investment will help fulfil our projected business needs across the Alibaba digital economy as we continue to strengthen operations in Singapore.”
SIA Burns Through Half Of Its Cash
Image Credit: Atlas Logistics Network
Airlines continue to be battered by the Covid-19 pandemic that has paralysed air travel.
In August, it was reported that Singapore Airlines has spent half of the S$8.8 billion that it raised through its rights issues.
Of the total amount, S$2 billion has been used to repay a bridge loan that was taken to tide the company over from March to June until the proceeds of the rights issues came through in early June.
Another S$500 million was used to redeem SIA’s 10-year bonds.
The remaining S$1.9 billion was used for ticket refunds and repayment of funds previously drawn under certain lines of credit.
To curb costs, the Singaporean carrier has slashed salaries and put staff on unpaid leave as it operates at less than 10 per cent of capacity.
SIA posted a first-half loss of $1.85 billion as the pandemic wiped out passenger traffic.
In response, SIA launched in-plane dining and training centre tours.
Within half an hour, all slots for its two-day run on October 24 and 25 for a lunch dining experience onboard its largest A380 aircraft were sold out and there was a waitlist.
Its training centre tours saw more than 6,800 bookings and registrations were closed after nine hours due to “overwhelming demand”.
Founder Bak Kut Teh Issued An Open Plea, Then Got Lambasted
Image Credit: Founder BKT Facebook page
The local bak kut teh chain first made headlines in July when its second-generation owner, Nigel Chua, issued an open plea on social media.
He called for public support to save his floundering, Covid-hit business which he said was in imminent danger of closing “if we don’t turn around in the next two months”.
However, netizens in response criticised him and rumours around his apparently vast personal wealth circulated.
He was said to drive a sports car and stay in landed property, and spotted wearing a Audemars Piguet luxury watch.
Contrary to that, Nigel told the media that his AP watch is second-hand, he lives in a five-room HDB flat and drives “a Japanese car”, a Toyota Vellfire, which he also bought second-hand.
He came under scrutiny again when a previous The Straits Times article reported that the brand was opening an outlet in Chengdu, China.
Considering the company’s current struggles, this made netizens question the move.
Later on, a Founder spokesperson explained in a statement that the Chengdu outlet is a franchised one that is funded and managed independently from Founder Bak Kut Teh Singapore.
Tesla Starts Own EV Charging Infrastructure, Hyundai Builds Electric Car Hub
Image Credit: Kyodo
This month, it was reported that US electric vehicle (EV) maker Tesla plans to set up its own EV charging network here.
Tesla was hiring for a Charging Manager on their careers page, which hints to the setting up of Tesla’s own EV charging infrastructure in Singapore.
The job listing details that the role’s primary function is to be responsible for the “strategic planning, execution and management of Tesla charging networks across Singapore.”
Besides the Charging Manager role, Tesla is hiring for other roles in Singapore which includes a store leader, field service engineer and vehicle service technician.
Additionally, South Korean carmaker Hyundai Motor will be setting up an electric vehicles (EV) manufacturing plant at Bulim Avenue in Jurong, which is slated to be operational by 2022.
According to Prime Minister Lee Hsien Loong, “it is an investment of almost S$400 million, and may produce up to 30,000 vehicles per year by 2025.”
Singapore aims to phase out petrol vehicles by 2040 and expand the EV charging infrastructure from 1,600 charging points now to 28,000 by 2030.
A Battered Year
It is not an understatement to say that this year has been nothing but headwinds on multiple fronts.
Covid-19 has played a pivotal role in these headlines that made themselves to the news this year. It has dealt blows to businesses but also presented opportunities to others.
Businesses that have managed to survive are those that have innovated and pivoted.
Are we prepared for 2021? We don’t know that for sure, but business closures or bankruptcy calls no longer surprise us anymore.
Featured Image Credit: RSM Singapore / Singapore Business Review / Founder BKT / Gardens By The Bay / Getty / Caixin Global