TL;DR

Who: Mobike, SingPost, Some China insurers

Weekly Business Brief | 2019 Week 11

Wrapping up the week's business news and announcements.

SBO Singapore Weekly Business Brief
Published:   |   Updated:   |   Posted in

Mobike withdraws from the Singapore market

Mobike has also withdrawn its applications for a PMD-sharing licence and to increase its maximum allowable shared bicycle fleet size.

Mobike made an application on Monday (Mar 11) to seek consent to surrender its bicycle-sharing licence in Singapore, the Land Transport Authority (LTA) has confirmed.

In an emailed response to queries from Channel NewsAsia, LTA said on Tuesday it is assessing Mobike’s request, and will work with the company to ensure that it has fully explored all options, including its proposal to transfer existing assets or operations to existing licensees, to minimise impact to consumers.

LTA added that it has emphasised to Mobike that if its application to surrender its licence is granted, it must conduct a proper exit by removing all bicycles from public places. The company must also provide refunds for user deposits and pre-paid credits in accordance with the company’s terms and conditions.

Mobike has also withdrawn its applications for a PMD-sharing licence and to increase its maximum allowable shared bicycle fleet size.

Read more on this report from Channel NewsAsia.

SingPost mulling closure of US e-commerce business

The U.S. e-commerce business… has been a drag on SingPost’s profit as the unit suffered losses in each of the last three years, a key reason why SingPost’s market value has more than halved since a record high in February 2015.

Singapore Post Ltd. is likely to wind down or sell its loss-making U.S. e-commerce business after conducting a strategic review of the unit, according to a Bloomberg survey.

The U.S. e-commerce business, which helps U.S. retailers including Speedo and Tommy Hilfiger manage online stores and package deliveries, has been a drag on SingPost’s profit as the unit suffered losses in each of the last three years, a key reason why SingPost’s market value has more than halved since a record high in February 2015.

The company is now conducting a review of the business which is “expected to remain loss-making in the current financial year,” Mei Yu Hong, a company spokeswoman told Bloomberg by email on Feb. 20.

Read more on this report from Bloomberg.

Chinese insurers expanding in Singapore, targets South-East Asia

PwC’s Ms Ang said: “We have to bear in mind that the market is not limited to just the locals in Singapore, but (includes) the accessibility that Singapore can provide in reaching offshore markets.”

Despite Singapore’s small market size, a handful of Chinese insurers has been expanding slowly but surely into the country, and appears poised to use it as a springboard into the rest of South-East Asia.

Currently, two China-based insurance companies are licensed by the Monetary Authority of Singapore (MAS) to conduct business here as direct insurers, while two others have entered the market to distribute their technology and wealth management solutions. Among them, two have already expanded into Indonesia after setting up shop here.

The focus on technology is wise, given the companies’ deeper expertise in the developing field, said Benjamin Cheong, a partner at Rajah & Tann Singapore LLP, which acts for ZhongAn in its deal with Grab.

“It’s quite well known that Chinese companies are ahead of the rest of the world in software, artificial intelligence and blockchain tech,” he said. “We believe that quite a lot of these companies have the expertise to do proper insurtech software which is not found in Singapore, so they feel that they can do better in the insurtech business and can complement the existing players.”

Observers are hardly surprised [about the expansion in Singapore], noting that not only does Singapore offer a stable, well-regulated environment for companies looking to heed the call to head overseas under the Chinese government’s “One Belt, One Road” strategy, but it also occupies a strategic position in South-east Asia for further expansion.

PwC’s Ms Ang said: “We have to bear in mind that the market is not limited to just the locals in Singapore, but (includes) the accessibility that Singapore can provide in reaching offshore markets.”

Read more on this report from Business Times.


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