Franchising Strategy Helps SMEs Internationalise In Speedy Manner, Says Singapore Minister

SINGAPORE, Nov 1 (Bernama) -- Franchising as a strategy has clearly helped many small and medium enteprises (SMEs) internationalised in a speedy manner, says Lee Yi Shyan, Senior Minister of State, Ninistry of Trade and Industry and Ministry of National Development.

Source from (Bernama): http://www.bernama.com/bernama/v6/newsbusiness.php?id=706248
Published: November 02, 2012

"The expanded sales and scale of operations would in turn provide resources for product development, automation and mass production.

"Franchising could help SMEs enter into a virtuous cycle of profitable growth and rising organisational capability," he said when opening Franchising and Licensing Asia 2012 (FLAsia), a three-day event at the Marina Bay Sands Expo and Convention Centre here Thursday.

Lee noted that in Singapore, the franchising and licensing industry has grown steadily over the years.

In 2011, he said: "Our local franchising industry accounted for 18 per cent of the total domestic retail sales volume.

"The diverse sector has in excess of 500 franchise systems now, with more than 37,000 franchisees operating with an annual turnover of more than S$6 billion. We expect this sector to continue its growth momentum," he said.

He said there were many examples of Singapore companies successfully and rapidly expanding their overseas footprints via the franchising route.

One such company was ladies footwear and accessories label, Charles & Keith, he said.

Other well-known Singapore names have internationalised by adopting a combination of organic growth and franchise strategy. They include BreadTalk, OSIM, Fish & Co, SkinC, Kenko Foot Reflexology and Spas, Mr Bean, Muthu's Curry and Udders.

As Asia continues to grow, Lee said two things will happen.

Firstly, the momentum of foreign brands establishing themselves in Asian cities will continue. Secondly, within Asia, original brands created locally will multiply quickly, he said.

Lee said some of them have attained the critical scale to seek growth opportunities in new and overseas markets.

He said the two-way flow and the accompanying fusion of new ideas would render local markets in Asia more competitive and exciting.

"While many brands prefer to grow their businesses organically, a significant portion of others choose to grow rapidly by adopting the franchising and licensing strategy," he said.

Lee encouraged more SMEs to consider growing their top lines using franchising and licensing systems.

On FLAsia, he said that it was conceptualised as a one-stop shop for deal-making.

Over the years, he said, FLAsia has become an exchange platform for franchisors seeking new markets, entrepreneurs seeking growths, start-ups seeking to enter a new business and private equities seek opportunities to invest.

He commended the Franchising and Licensing Association of Singapore and BizLink for their relentless efforts in promoting the use of franchising and licensing systems among Singapore companies.

-- BERNAMA