Written by: Guo Zhenhao
Foreign tech giants, mostly of Chinese origin, are leveraging the rise of telecommuting that has arisen because of COVID-19. Aside from investment in commercial property in the central business district (CBD), what other changes are coming?
Shift Within the Service-Oriented Economy
Prime Minister Lee Hsien Loong recently warned of job losses due to structural changes following COVID-19. This has placed many traditional companies at risk of defaulting on bankruptcy. However, central business district’s offices are unlikely to remain empty despite this downturn.
Tech companies such as Alibaba, which have recently expanded their e-commerce capabilities, number amongst future tenants who are eager to move into vacated offices within Singapore’s central business district. This influx will likely balance out COVID-19 losses as property analysts predict that vacant office spaces in Singapore’s CBD will remain below the ten-year average of 6.2% this year and in 2021 as well.
Push Factors Responsible for Chinese Investment
Singapore is known to be a hub for talent acquisition, and is often the top choice for foreign investors who are hoping to expand into the Southeast Asian market. Favourable government policies and political stability are amongst other pull factors that make Singapore attractive to foreign investors.
However, with upstart companies like Pinduoduo and startups like ByteDance and Kaishou alike flourishing in China, e-commerce companies with sufficient capabilities would prefer to target overseas markets where the competition is less stiff.
While the importance of geographical location could continue to diminish as the concept of remote work is normalised, it is important to note that China’s firewall plays a significant role in the live streaming capabilities of start-ups within the mainland. By expanding overseas, Chinese tech companies can more easily reach global audiences through live streams.
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Sources: South China Morning Post, The Straits Times
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