Global agencies on why they continue to set up in SG despite immense competition

Global agencies setting up their hubs in Singapore isn’t a surprise to anyone who’s been in the market for a while. With the rise of Asian brands, and markets such as China now one of the super powers of the world, it comes as no surprise that in recent times notable global agencies such as VaynerMedia, 72andSunny, Forsman & Bodenfors, Superson have been making the tiny red dot their home.But working in the Singapore marketing and agency scene is by no means easy as margins continue to shrink and purses tighten for both media and creative players. According to research group IMD World Competitiveness Centre, Singapore is ranked as the world’s most competitive economy, overtaking Hong Kong. Singapore was elevated to the top again after nine years, due to advanced technological infrastructure, the availability of skilled labour, favourable immigration laws and efficient ways to set up new businesses.In our many conversations with agency heads established in Singapore, the curiosity of established global and local players remain around why international ad and media agencies continue to set up in the market – despite the cut-throat situation.Speaking to Marketing on the record, recruitment specialist Jimmy Yar, founder of The Talent Detective who have helped several global agencies source for talent in Singapore, says boutique global agencies looking to set up in Singapore are largely eyeing more regional clients, rather than Singapore alone.According to Yar, Singapore strikes as a clear choice to cover the Southeast Asia markets and the rest of Asia as Greater China is already covered by agencies with a presence in Shanghai or Hong Kong. Moreover, the local government has put in place procedures that allow for businesses to be set up in Singapore conveniently.“The ease of setting up business, grants, taxation, talent capital, political stability and the continuous efforts of EDB attracting global MNC companies to set up their global/regional hub here all makes strategic sense for these agencies to base themselves here,” Yar said.He was also of the view that the scope and markets these agencies cover goes beyond Singapore domestic business and does not directly compete with local independent agencies. “As these boutique global agencies remit for Asia largely is to handle origination work versus multi markets management type of scope, the plan is often to have just one or two offices in Asia to handle clients for the entire region which the decision often becomes China and Singapore,” he said.When it comes to acquiring talent, Yar added that global agencies look for talents with experience in managing global/regional business, ability to work independently as the agency structure starts out “flat”. Talents are also required to be able to handle strategic with senior clients yet at the same time be operationally involved, Yar said.Meanwhile, New York-based media company VaynerMedia’s Avery Akkineni, VP, global media said client requests for global partnership is one of the many reasons VaynerMedia decided the time was right to set up its office in Singapore. With her helming the growth of VaynerMedia, the company is looking to establish Singapore as its APAC headquarters and hub, while the bulk of its business will be regional.Singapore, she added is attractive and presents a very business-friendly opportunity. Moreover, there is a low barrier to entry for many professional services businesses. But as the regional hub, the challenge for the agency remains in ensuring there is the right cultural understanding of the countries across the region as many multi-national brands continue to centralise its marketing activity out of Singapore.“In reality, each country has distinct and critical cultural nuances. It’s a competitive space; with many talented agencies vying for local business, and top local talent,” she added.Overall, Akkineni added that the team sees growth in this region, and explained that many of VaynerMedia’s clients’ business growth over the next decade will be heavily driven by Asian consumers. “Outside of multi-national businesses, we’re thrilled to be partnering with innovative regional businesses in Southeast Asia. Longer-term, we’re definitely considering adding additional Asia offices,” she said.Meanwhile, Aaron Pearce, APAC managing director of VICE’s creative agency Virtue was of a similar stance where he viewed Singapore as a great entry point into the region. Moreover, Singapore is also now the home for many global client leads. VICE ventured into the APAC region even before officially opening its Singapore office in 2017. The company now boasts 10 offices across the APAC region. He added, that while Asia used to be referred to as “rest of the world”, it is now “most of the world”.Tips for breaking into SGPrior to launching in Singapore, agencies should be prepared to clearly differentiate themselves from the marketplace, said VaynerMedia’s Akkineni. She added:Singaporeans are savvy and innovative individuals and agencies can stand out with a clear value proposition, and a vision of how they can add unique value in Singapore.Chris Kay, president/partner, 72andSunny APAC said that despite the market size and stiff competition, Singapore is one of the most commercially competitive markets with a proliferation of agencies and offerings. Kay added, “For 72andSunny, building a team that represents the modern Southeast Asia (and not full of old white guys like me), was an opportunistic response to a perceived difficulty.”He also said that having localised talent helps global agencies resonate with clients as well. For the agency, it has to date worked with brands such as such as Grab, Carousell, Google and AirAsia, on projects. Kay also added that 72andSunny was inspired by the creative energy in Southeast Asia which also aligned with the talent and business opportunities in the region. “It felt like a no-brainer for us,” Kay said.What the company now tries to stay away from is being “that typical foreign company” that merely transplants its model and way of doing things. “You got to speak to people first, and then evolve based on what you have learnt. Learn, learn and learn! This is one of the most diverse regions in the world, with unique pockets of incredible culture and creativity,” he added.(Photo courtesy: 123rf)