June 29, 2017

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Danielle Goh

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by Danielle Goh

GOOGLE announced on June 1 that it will be launching an “ad blocker” and a tool called Funding Choices on Chrome early next year.

But Google’s “ad blocker” is more of an ad filter that will rid websites of ads blacklisted by Coalition for Better Ads, an industry group that develops global standards for online advertising. Those on the black list includes auto-playing ads that blare loud music, ‘sticky’ ads that are pinned to the page even after scrolling, and ads with a ten second countdown.

Funding Choices will prevent Chrome users from depriving publishers of revenue by blocking all ad blockers. Users will have to disable their ad blockers to view the website. It will also provide publishers with an alternative source of revenue. An option to pay for ad free access will be available to users. 

On twitter, some welcomed the move but voiced their concerns that Google might have a conflict of interest. Currently, advertising makes up 86 per cent of its revenue. 

Some were not too happy about Google’s new ad blocker…

While others understood that the move will have a widespread impact on digital advertising. Google is a dominant player, accounting for 40.7 per cent of digital ad revenues in the US. Chrome is the internet’s most popular browser.

Mr Sridhar Ramasawamy, senior vice-president of ads and commerce at Google said in a blog post that Chrome will stop showing ads on websites that are “not compliant with Better Ad Standards starting in early 2018.” The “ad blocker” is expected to be turned on by default on mobile and desktop. Google has not elaborated on the tech it will be using to filter ads.

But Google is helping publishers to prepare with a tool called Ad Experience Reports, alerting them to offensive ads on their sites and explains how to resolve the issues.

Funding Choices is currently available to publishers in North America, UK, Germany, Australia and New Zealand, and will be available in other countries later this year. This new tool will allow publishers to charge users for ad free access. Google will get a ten per cent cut from each charge. Details are not yet announced about how Google plans to distribute the money.

Mr Ramasawamy, said that Google’s new initiative would prevent people from blocking all ads, a solution that takes a “big toll on content creators”. About one in four people are estimated to have used a desktop ad blocker, and about one in ten on phones. 

By removing the most intrusive ads, Google hopes that it can improve browsing experience, and safeguard a vital source of revenue for publishers. Chrome already blocks some adverts such as pop-ups. Some publishers see the move as a good thing. “We’re supportive of action as it helps to clean up the ad-ecosystem and improves consumer trust,” said Mr Jason Klint, the CEO of Digital Content Next, the trade group for digital media publishers like Vox Media and CBS Interactive. (Vice News, Jun 2)

While it may be good news for the advertising industry, smaller publishers and ad companies might find it harder to adapt to the changes. With fewer resources, it might be financially challenging to reformulate ads to meet Google’s standards.

Others are concerned that Google will have a conflict of interest as advertising makes up 86 per cent of its revenue. Previously, Google controversially paid Adblock Plus $25 million annually to ensure that its ads are unblocked. EU antitrust regulators might be extracting a $9 billion fine from Google, if it’s found guilty of skewing search results for its own shopping service.

Google’s new “ad blocker” seems to be a good thing for everyone, publishers, advertisement companies and consumers. But concerns remain that Google’s expanding influence and policing of advertisements might also be a move to block competitors.

 

Featured image by Sean Chong.

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by Danielle Goh

ALL the cheese lovers in Singapore rejoice. The rest of you, we understand you may not be too enthusiastic.

The newly revamped LiHo has a range of cheese milk teas, and a $1.90 topping of cheese to go with any drink. RTG Holdings decided not to continue the Gong Cha franchise here, after its Taiwanese business partners sold the company to Gong Cha Korea. By Monday (Jun 5), all 80 Gong Cha outlets will be replaced with LiHo. It’s new name means “How are you?” in Hokkien.

Some additions to the menu are the cheese milk tea, smoothies, and vitagen drinks. Gong Cha fans need not fear, as trademark flavours such as Oolong Milk Tea, and Earl Grey Milk Tea + 3M still remains on the new LiHo menu. There are also more ways to drink your milk tea: A small opening with a heart-shaped lid helps to get to the top layer, and comes in handy for hot drinks. Also, drinks come in medium and large sizes.

NOTE: Gong Cha has clarified that Oolong Milk Tea is not available on LiHo’s menu. LiHo’s Say Cheese range actually consists of different teas, with no addition of milk, and a cheese topping. We apologise for the error.

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TMG went down to LiHo at Paragon and Cineleisure to try the controversial cheese teas, other new flavours, and also the more ‘conventional’ milk teas. We’ve rated each drink, and picked out the best and worst ones:

 

1. Cheese Guan Yin with cheese topping, Large. $7

So for this drink I went crazy with the cheese… It was a bit of a splurge, but worth it.

Fans of Gong Cha will be happy to know that the cheese had a light foamy texture, similar to the Gong Cha milk topping. The cheese was like a creamy version of a Japanese cheesecake. Mixed with a light brew of oolong tea, the slightly savoury cheese topping blended well with the drink. The cheese was not too overbearing, and the different layers in the drink made for a colourful taste palette. It took a while getting used to the blend of savoury with the slight bitterness of the oolong tea.

For cheese lovers, don’t forget to drink it to the end for the last bits of cheesy goodness!

Verdict: Yes, it lives up to the hype. 9 out of 10

 

2. Cheese Jing Syuan tea, with white pearl topping, Medium. $4.80

The cheese and Jing Syuan tea is an unexpected pairing.

It’s like salted egg yolk on a bailey’s ice cream, unique together, but also completely okay without the other. The savoury cheese was a surprisingly satisfying counter to the sweetness of the Jing Syuan tea though. This one didn’t blend as well as the Cheese Guan Yin, so the cheese layer remained at the top. So this was like drinking the Jing Syuan tea, but also eating a slab of cheesecake, separately. After stirring more vigorously, the cheese still didn’t quite mix with the tea, so I felt like I was drinking regular Jing Syuan tea. It was not as good as the Cheese Guan Yin in my opinion.

Verdict: Surprisingly good, but can be better blended. 7 out of 10

 

3. Yam Milk with custard pudding topping, Medium. $4.30

This was so good…

It’s a tough fight between the yam milk and the Cheese Guan Yin for first place. I was glad to have taken the staff’s suggestion to have the custard pudding topping. It added a caramelised sweetness, and the soft, milky texture of the pudding complemented the yam perfectly. The concentration of yam was just right, and it made the drink appetising. This drink reminded me of my favourite mango pudding, it could double up as dessert any time! I finished the drink very quickly.

Also the pretty purple colour is a plus.

Verdict: Perfect mix. 10 out of 10

 

4. Classic Earl Grey Milk Tea + 3M, Medium. $4.20

Ah, the classic milk tea. Basically an improved version of Gong Cha’s Earl Grey Milk Tea + 3J. Slight difference is that Gong Cha has more of a smooth texture, while for LiHo there’s a stronger brew of tea, and it’s a little more milky. The mixture of black pearl, pudding and jelly is bubble tea heaven.

Verdict: It’s classic for a reason. 8 out of 10

 

5. Choc-A-Milk + OREO, Medium. $4.20

I had to walk to Cineleisure for this one, because it was sold out at LiHo’s Paragon branch. According to the staff, this drink is a best-seller. But after drinking it, I think that most of the credit goes to the Oreos. There’s a generous portion of crumbled Oreo bits at the top of the drink, but it doesn’t really go well with the chocolate milk tea. After a while, I felt that I was drinking diluted chocolate milk, but with the occasional Oreo crunch. It was quite a disappointment. Maybe it would work better as a smoothie…

Verdict: Does not taste as good as it sounds. 5 out of 10

 

6. Vitagen ‘n’ Peach, Medium. $4.00

Tastes just like normal Vitagen, and it’s very, very, very sweet. Sadly, nothing really special about this drink. I couldn’t taste much of the peach, and as if the Vitagen was not sweet enough, there’s sugar liquid at the bottom. Feels like they bought bottles of Vitagen and just poured it in; If I wanted Vitagen, I would rather just go to Sheng Siong.

Verdict: Excuse me while I reel from sugar overdose… 3 out of 10

 

7. Golden Yuzu Juice + Golden Ai Yu, Medium. $3.70

Here’s a healthier option if you need a pick-me-up drink for the day. It was really refreshing, a great thirst-quencher on a hot and humid day! The sourness of the yuzu hits you very quickly, with a sharp aftertaste. Some yuzu slices are mixed in with the drink, so it’s peel fresh. The jelly helps to break the sourness with its honeyed sweetness. Only downside to this is that the jelly is a gigantic chunk. Was a little annoying because it’s too big to drink with the straw, so I had to keep mashing it.

Verdict: Don’t be jelly, try this. 7 out of 10

 

Well, at this point I’ve been convinced: Cheese does go with milk tea. Top favourites are the Cheese Guan Yin and the Yam Milk with custard pudding; I’ll gladly go for a second cup.

 

Note: Previously, the article mentioned that Gong Cha’s Oolong Milk Tea remains on the new LiHo menu. This is incorrect, as Oolong Milk Tea is not available on LiHo’s menu. LiHo’s Say Cheese range consists of different teas, with no addition of milk, and a cheese topping.

 

Featured image by TMG.

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by Danielle Goh

PINK-HAIRED illustrator Ms Rachta Lin, 30, asks me to wait for her to finish a drawing that a teenage fan requested for. “Just give me 15 minutes, then after we can start the interview!” she said as she looked up and smiled, before quickly picking up her pen to draw.

The star-struck teen sits in front of her, watching her sketch his favourite anime character. I can see what she is drawing too, because a camera is capturing the process live on a monitor.

At the corner of her desk, a red book catches my eye. On its cover, a green eyed blonde haired girl, brandishing a sword, is surrounded with red roses. “That’s my art book, it’s a little like an open diary, it’s inspired by my travels last year,” said Ms Lin as I picked it up and flipped through the pages of sketches and prints.

When Ms Lin was five, she fell in love with a Japanese anime she watched on television, and decided that she wanted to draw the characters she saw on screen. She tries to explain to me more about the show that first got her into anime. “It’s a little bit like Sailor moon, but much older,” she laughs.

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Armed with a degree in Visual Communication Arts at Assumption University in Bangkok, she worked with companies like Blizzard Entertainment and Wacom, but decided to leave the corporate world to be a full-time freelance illustrator. Ms Lin is supported by fans on Patreon, an online site where people can contribute funds toward projects by their favourite artist.

Her art book, Rachta Lin: Artist’s journey of 2016 was self-published and funded by her fans on Kickstarter. Within two days 60 backers pledged a total of $6,337. “Well I’m happy that I have such a strong support there. It definitely helps me to do exactly what I want to do. I was a little nervous because it was my first time starting a crowdfunding project, but it turned out great!” said Ms Lin.

 

Art fairs no longer just for the hipsters

With more artists creating, it’s no surprise that art fairs like Doujin market and the Singapore Art Book Fair (SABF) have been growing in scale. Doujin Market, or Doujima for short, features mainly pop culture inspired art and fan art, taking cues from Marvel, Japanese anime and game design.

Organised by The Neo Tokyo Project, Doujima is supported by NAC, and sponsored by companies such as Kaiju Den and Wacom. When it first started in 2011, there were 22 artist tables and a thousand attendees. This year, it had 170 artist tables, over a dozen corporate exhibitors and 17,000 attendees. The event, held at Suntec Convention Centre from May 6 to 7 this year, featured many student creators and independent artists.

Ms Rachta Lin drawing for a fan

SABF, organised by BooksActually, was held from April 27 to 30 this year at Gillman Barracks. While there was a drop in attendance this year, from 7,000 to around 4,000, there was an increase in sales. “This is good news. Surprisingly, we had a massive surge in sales for almost all the exhibitors. You are easily looking at eight exhibitors that more or less sold out by the last day, and almost all the other vendors had cleared at least three quarters of their stocks,” said Mr Kenny Leck, the owner of independent bookstore BooksActually and its publishing arm Math Paper Press. The event brought together the works of artists and writers from Singapore, Southeast Asia and other parts of the world. It featured an eclectic mix of comics, design merchandise, zines, books, and photography catalogues.

Mr Leck felt that the venue was the key factor that caused a drop in attendance this year. While last year SABF was at the epicentre of the city, in Marina Bay Sands, this year it was at Gillman Barracks, a ten minute walk from Labrador MRT station. As for the increased sales, Mr Leck attributes it to “better curated content” and “providing the quality” that made visitors buy more.

What do art fairs add to the illustration scene in Singapore?

BooksActually was initially supposed to have a booth at Doujima, however it had to pull out at the last minute as not enough staff could make it for the event. For Mr Leck, art fairs help artists to showcase their works and engage with a wider audience here. “Doujima and SABF, allows the individual content creators, and publishers like ourselves an avenue to showcase the works, and also engage with the audience, who effectively are potentially our customers,” said Mr Leck.

Doujima brought together key industry stakeholders such as gaming companies, art studios and independent art galleries. Talks by experienced artists and networking sessions were organised to help young artists further develop their career in illustration. “We’ve supported efforts by young artists to develop work in genres like visual novels and games,” said Mr Jason Koh, account director of The Neo Tokyo Project.

From the fringe to pop-culture

Doujima was packed. But the throngs streaming into the exhibition hall were a far cry from the inaugural event in 2014, which welcomed 1,000 visitors to the upper floors of SCAPE. How did Doujima become so popular? For starters, Mr Koh pointed out that more youths are pursuing their illustration interests in schools, studios and subsequently their future careers.

TMG spoke to a group of student creators at their booths at Doujima, currently studying game art design courses in Nanyang Polytechnic (NYP). Ms Ivette Chua, 21, together with two other schoolmates, set up a booth to sell their own food inspired keychain designs and fan art posters. “I want to work with a gaming or animation company for experience first,” said Ms Chua, on her future career plans.

Many of the artists that TMG spoke to had their own online stores, or websites featuring their artwork portfolio. “Doujin Market has a large proportion of student creators and independent artists, many of whom have unparalleled popularity and a sizeable following online,” said Mr Koh. Mr Joseph Foo, 28, who goes by the artist name Strobolights, markets his artworks on social media, particularly on Instagram. Artists like Mr Foo and Ms Rachta Lin found that social media is an important tool to connect with fans and to expand their audience.

“Stakeholders and policy makers must also recognise that they can no longer look at art with the same lens, and that in order to tap into a young, yet vocal and digitally savvy audience to help revitalise Singapore’s arts scene, they need to stop thinking traditionally,” added Mr Koh.

 

Some challenges remain

While there have been efforts by industry stakeholders to support the illustration scene here, some artists are still finding it hard to hold down stable work.

Ms Sarah Isabel Tan, 29, a freelance artist from Singapore, makes a series of pastel, palm-sized cat figurines called Darumaos, and has self-published her sketchbooks. While she has an online business selling her artwork, she is on the lookout for work with a more stable income. After studying animation at NYP, she took up jobs with Warner Brothers, and some gaming companies in Singapore. But Ms Tan told TMG that most of her previous jobs were short term projects, aside from her work online. “I have had something like five jobs over the span of my working career, aside from freelance and nothing really lasted very long, usually due to either a volatile working environment or poorly managed cash flow,” said Ms Tan.

Ms Tan’s series of self-designed Darumaos

“I guess the biggest problem for me right now is being a sustainable artist. Having a long term job. I have friends who are successful freelancers as they have found their market but I don’t think I’ve really found mine yet,” she added.

For young artists just starting out, Mr Ng Kian Chuan, 32, manager of Collateral Damage Studios, an art studio with courses for illustration, comics and animation, noticed that many struggled with the lack of business know-how.

“For a lot of artists it’s the lack of business knowledge. They may know how to draw, but even that alone is not enough. Some artists don’t know how to price their works, they think that it’s alright to sell their works for a lower price, and they don’t know the market rate. This would be unsustainable in the long run,” said Mr Ng.

 

A growing market here

Recently, the graphic novel has taken a front seat in Singapore’s literary circles. Sonny Liew’s The Art of Charlie Chan Hock Chye (Link to our review here) was nominated in six categories at the prestigious 2017 Eisner Awards. Published in 2015 by Epigram Books, it sold 9,000 copies in Singapore, and just last year, it was awarded the 2016 Singapore Literature Prize for English Fiction.

It is clear to Mr Kenny Leck that more artists are creating now. Math Paper Press has published works like The Resident Tourist, an eight part ongoing autobiographical comic series by Troy Chin; The Unsavoury Alphabet, an illustrated crime diary story by Gene Whitlock; and Fatman and Superchub, a comic strip by Stephanie Ho. “There has been a supply of content in recent years. In the past, famed filmmaker Eric Khoo was originally working on his illustration work, dabbling in comic drawings but never got round publishing it. The market for locally produced content of this nature was almost non-existent at that time,” said Mr Leck.

Illustrators are also branching out to different industries. Some have ventured into the gaming industry to design characters and artwork. Ubisoft Singapore had a hand at designing the artwork in Assassin’s Creed, an action-fantasy video-game series. Kaiju Den is exploring new technologies like virtual reality (VR) with their newly released title on PlayStation, Stratos Fantasea. At Doujima, Kaiju Den invited attendees to test and experience this first hand.

Kaiju Den’s VR testing of Stratos Fantasea at Doujima

The G has also actively supported art events like Doujima and SABF. “Doujima is funded by the National Arts Council (NAC) and many sponsors, so it shows that the government supports art events like this, which is very encouraging,” said Ms Charlotte Lee from The Neo Tokyo Project.

Moving forward, Mr Koh believes that a “robust publishing infrastructure” and “more private and public funding” will help give creators a leg up. But Mr Edmund Wee, the CEO of Epigram Books said that the growth in publishing is still too slow. “The publishing and art scene in Singapore has improved, but it has not been improving fast enough,” said Mr Wee. He pointed out the National Literary Reading Writing Survey in 2015, which he found that two in five people preferred the internet and social media to reading, and that only one in four readers had read books by Singaporean writers. “Look at the survey that NAC did in 2015, that only one in four people are reading Singaporean literature. We don’t have a flourishing reading culture. That means that in the past 20 years, it was not encouraged,” said Mr Wee.

“We need a system overhaul. Start with the schools, encourage students to read Singaporean literature, graphic novels, comics, all types of books. It also requires some government intervention, and of course help from the grassroots,” he added.

Rachta’s pink hair might stand out in a crowd, but the growing throng at her booth quickly obscures her from view as the crowds stream in. Three hours into Doujima’s first day, and already the long concourse at Suntec City convention centre isn’t big enough for everyone trying to enter. Queues form. Has this fringe begun to turn mainstream?

 

Featured image from The Neo Tokyo Project.

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by Danielle Goh

GAZELLES. Adaptable, fast and incredibly rare.

But these gazelles are not the four- legged animals native to Africa. It’s a term for fast growing and profitable startups. With a 20 per cent increase of profits each year, these startups are highly sought after. Their natural habitat is an ecosystem of cutting-edge research, plucky investors and initiatives by the G.

Only 8.1 per cent of startups in Singapore are gazelles, making them an endangered species here. “While the number of startups have increased, and more have received government support, not enough are becoming successful gazelles,” explained Dr Wong Poh Kam, Director of NUS Enterprise, in an interview with The Middle Ground.

Companies like Razer and gaming giant Garena are examples of gazelles from Singapore. Founded in 2009, Garena has amassed annual profits of US$200 million, evolving into one of Southeast Asia’s biggest startups.

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Before 2010, startups in Singapore were hardly a buzzword, but now they are the talk of the town.

You’ve heard of Smart Nation, and of ministers hammering on about the need for innovation and to transform our economy. In fact, the G has been steadily building initiatives to further develop the startup scene in Singapore. Helmed by Finance minister, Heng Swee Keat, the newly revamped Future Economy Council will implement proposals by the Committee of the Future Economy (CFE) to fund more research and help startups build networks overseas.

With more investors and funding from the G, the number of startups have doubled between 2004 and 2015, showed the findings of a recent study by NUS Enterprise. In the study, younger startups surveyed were companies that were founded after 2010 and mature startups were companies that have been around before 2010.

Dr Wong Poh Kam, director of NUS Enterprise speaking at Innovfest Unbound 2017. Image from NUS Enterprise

The main thrust of the research is that while efforts have paid off in creating a thriving startup ecosystem, few make the leap to become gazelles.

We break down the key developments in Singapore’s startup scene and what it could mean for the future:

1. Increased number of new startups

Startups in Singapore rank first in business churn when compared with other countries, higher than UK and the US.

What this means is that many new startups are set up, and those that don’t succeed exit.

A high business churn generally bodes well for startups. “It’s a dynamic that attracts new players. This suggests that there’s more entry into the startup scene in Singapore, and it could be an indicator that it’s growing,” said Dr Wong.

The booming numbers of startups here can be attributed in part to an improving infrastructure and ecosystem. Yet, the results are not as great as they should be. Not enough startups are becoming successful, and gazelles continue to be far and few.

 

Diagram of different types of High-tech startups in Singapore. Image by NUS Enterprise Study

 

2. Highly innovative and better protected

Younger startups are more innovative than mature startups. And many have introduced new products and services to the world. The NUS Enterprise Study also found that those who dedicate resources to research and developing tech tend to have higher profits.

While more companies own Intellectual Property (IP), a huge jump from 19.6 per cent in 2010, to 49.5 per cent in 2016, still only less than half of startups in Singapore have their own IP.

Having IP is an asset to startups, as innovations are protected. A strong IP also helps investors to be confident that the products of startups are truly unique and new.

Both young and mature gazelles in Singapore list a dependence on major customers as one of their top concerns for 2016. Dr Wong sees this as a result of some gazelles not having a strong IP.

“The large customer, knowing that you are highly dependent on them, may squeeze you on price by threatening to switch if you don’t meet their demand. It will be less of a concern if you, the supplier has strong technology or IP that is not easy for other competitors to replicate.”

3. More cha-ching from the G and investors

Roboy, an advanced robot developed at the Artificial Intelligence Laboratory of the University of Zurich. Image by Wikimedia user Adrian Baer

Younger startups benefit from more government support schemes and venture investments than their predecessors. This is a good thing. However, these resources must be directed toward ideas that can be competitive in the global market.

For Dr Wong, deep tech is the way forward. Think Artificial Intelligence (AI), DNA sequencing and supercomputers.

“This may require looking at reallocating funding support. Although there are higher risks and higher returns, deep technology is more likely to succeed in the global market,” said Dr Wong.

For more gazelles to be created, both startups and investors must be willing to take risks, and be invested in ideas that can change the world. The G may have already got the memo, as Dr Yaccob Ibrahim, Minister for communications and information, announced the launch of AI.SG at Innovfest Unbound 2017. This initiative will bring together investors, government agencies, startups and universities to advance AI research and development. The National Research Foundation (NRF) will invest up to US$107 million in the project.

4. Younger and more equipped

Founders of startups are getting younger. About 62 per cent are 39 and below, and increasingly more founders are female, up from 5.9 per cent in 2010, to 10.6 per cent in 2016. The majority of founders are also trained in technical disciplines and have work experience.

University programmes like NTUitive and NUS Enterprise help entrepreneurs in their first forays into the startup scene. They provide support for aspiring founders, and aim to transform research into commercially viable products. NUS Overseas Colleges links students with startups from around the world, with opportunities to work in Silicon Valley, Israel, Beijing and Stockholm.

What’s exciting is that these programmes have the potential to link breakthrough research with startups.

5. Many are expanding across borders

More startups are outward looking: over 50 per cent have branches overseas, and 72 per cent derive their income from international customers. For startups to grow, they need to tap into global networks and markets.

“Singapore’s domestic market is too small, if firms want to grow, you need to get regional and global,” said Dr Wong.

Some startups like Ascent Solutions have been global ever since it started and almost all of its business is international. Six years ago, it launched a GPS tracking solution for companies transporting cargo in Africa and now it is dominating the market there.

What is clear is that although the startup ecosystem is teeming with more innovative companies, more gazelles are needed.

It’s difficult to become a gazelle because a startup must be both quick to grow, and also profitable. While there are many fast growing or growth-seeking firms, they must take risks that can sometimes cost them gravely. Cautionary tales abound: Redmart, once the largest online grocery in Singapore, had substantial amounts of VC funding, but it ran out of cash before achieving profitability. Investors quickly pulled out. It was then sold to Lazada at an estimated price between US$30 million to US$40 million, a much lower value than before.

Yet there have been some who successfully make the transition: Razer, an American gaming company jointly founded by Singaporean entrepreneur Mr Tan Min Liang and Mr Robert Krakoff, who is an American, is what Dr Wong terms as a super-gazelle.

“Both startups and investors need to take risks for startups to make the transition to become gazelles.” said Dr Wong. “It may be risky, but if there is a breakthrough product, the startup can achieve success.”

 

Featured image by Wikimedia Commons user Susan Adams. CC BY-SA 2.0.

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Photo By Shawn Danker
A worker walks by the Bedok Reservoir office of the Aljunied Hougang Punggol East Town Council.

by Danielle Goh

WHAT did you make of the PwC report on the finances of the Workers’ Party (WP) town council while it had charge of Punggol East? Did it look like same-old, same-old? Poor PwC. Its limelight had been stolen by KPMG, which released its report on the whole town council administration and finances in October last year.

PwC was put in charge of auditing the Punggol East single-seat ward which was incorporated into the Aljunied-Hougang town council after the by-election in May 2013.

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The WP had a short two years running the ward before it reverted to People’s Action Party control in the last general election. According to the auditors, there was plenty of foot-dragging and procrastination on the part of WP, hence, the lateness of the 94 page report, which was peppered with phrases like “no documentation’’ and “unsatisfactory overall”.

But the report is interesting for some insights into how a handover of town councils is done. The WP took over Hougang in 1991 and Aljunied in 2011. The Punggol East handover meant that both sides would have some experience to fall back on. Clearly, the WP operates a “new broom sweeps clean’’ strategy when it came into power, turfing out vendors even though their contracts had yet to expire. That, of course, is the town council’s prerogative. The question is whether the change led to better services or lower costs.

The chief beneficiary appears to be FMSS, the incumbent managing agent for Aljunied and Hougang, which went on to manage Punggol East. It charged a rate that is 17 per cent higher than the old vendor CPG, which had yet to finish its contract.

According to the PwC, the WP said that the managing agent contract went to FMSS because CPG wanted to terminate the arrangement. PwC said CPG could have been made to stay.

The PwC report had an interesting list of companies which seemed to have done well bidding for work in the WP’s Punggol East ward. According to the auditors, they won contracts even though they charged higher rates than competitors, or because there were no other bidders, or were simply handed the job.

Here’s what the auditors said about the way they were hired.

1. Rentokil Initial Singapore, which does inspection and extermination of termites, bee’s nests, rodents and other pests

Rentokil was awarded the contract from Sept 1, 2013 to Aug 31 last year. It was not the lowest bidder, and received 71.8 per cent on the Price Quality Method (PQM) score, falling behind Pest-Pro Management, which achieved 90 per cent on the PQM score. The PQM score measures the price and quality of a tender, and is the method of choice to help the G with its selection of contractors for the town council.

The Tender Evaluation Report submitted by the Aljunied-Hougang Punggol East Town Council (AHPETC) did not explain why it awarded the tender to Rentokil.

“In our view, neither the circumstances and reasons for not accepting the lowest tender in this case were fully justified, nor the reasons for not doing so properly recorded,” PwC said.

Rentokil was paid $10,385.42 in total. If the contract was awarded to Pest-Pro, the lowest bidder, it would have saved $2,700.21.

2. Red-Power Electrical Engineering, which maintains booster pumps, automatic refuse chute flushing system and roller shutters

Red-Power was hired for work in the Hougang and Aljunied estates in 2012, before the town council absorbed Punggol East in 2013. It was the sole bidder then. Instead of calling for a new tender for Punggol East or extending existing contracts with incumbent vendors, WP handed the work to Red-Power. The WP town council said the work went to Red-Power so that it would have greater leverage when the main contract for the whole AHPETC ran out. PwC, however, noted that when compared to other vendors who do the same kind of work, Red-Power was expensive. One comparison showed that its rate was higher by 775 per cent.

If the town council had chosen to extend the contracts of existing contractors by 12 months, it would have saved $25,920.

“Exercising [such] options would have allowed the Town Council to enjoy the significantly lower rates for a further year, while, at the same time, providing the Town Council with the additional time required to call for a second tender,’’ said the PwC.

3. Neela Electrical System, which maintains the electrically operated roller shutter doors at bin compounds and centralised refuse chute chambers

Neela was the sole bidder for a tender for the work in Punggol East.  It was given the job although its rates were 10 per cent higher than what other vendors charged and Neela itself had acknowledged to the town council during an interview that it had no experience in such repair and maintenance work.

The Finance Department of AHPETC was unable to provide the necessary payment documents and information to verify the work done by Neela, which was paid $27,545.65 in total.

4. Titan Facilities Management, which does conservancy and cleaning works

Titan was hired by the old PAP town council. When WP took over Punggol East, AHPETC could have extended Titan’s contract term by an additional 12 months. It did not do so but chose to call a new tender. While Titan had the lowest tender price of three bidders, it was charging 67 per cent more than before. If its contract had simply been extended for 12 months, the town council could have saved $423,147.

5. J. Keart Alliances, which maintains the fire protection systems including standby generator sets

Like Titan’s contract, the AHPETC could have extended J. Keart’s contract for another 12 months for the same rates.

Instead, the AHPETC called for a new tender for this too. J Keart won but with a new rate that amounted to a 400 per cent rise of rates for the weekly maintenance of generator sets, and a 2,567 per cent increase for the annual maintenance of fire extinguishers. If J Keart had stayed on, PwC estimated that the town council could have saved $27, 249.20 from April 1, 2015 to March last year.

Now that the town council is back in PAP’s hands, we wonder if it also adopted a new broom sweeps clean approach. We asked and we are waiting for an answer.

PS. The PAP town council has declined to comment.

 

Featured image from TMG file.

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