23/12/2019 Here Are 5 Business Ideas That Just Won't Work In Singapore

ENTREPRENEUR

Get Rich Or Die Trying: Here Are 5

Business Ideas That Just Won't Work
In S'pore
Zafirah Salim
2019-11-26 16:14:49
1 

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Running a business is always a gamble. You never know if your business idea will fly or
fall flat until you give it a shot.

The risk is pretty much inevitable, but you can avoid failing altogether when you look
at the trends of what have worked, or what didn’t.

Here’s a list of some business ideas that have proven unsuccessful in Singapore, so you
can save yourself from failing as well.

1. On-demand Laundry Services

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23/12/2019 Here Are 5 Business Ideas That Just Won't Work In Singapore

Image Credit: honestbee

The downward spiral of homegrown startup honestbee began with the pause of its
laundry service in Singapore. While their failure stems more than just their
laundry business, it gives an idea of which of its services is not feasible.

Beyond honestbee, there are plenty of other on-demand laundry services in Singapore
such as 24/7 laundry lockers WashBox24 and MyLockerLaundry.

The key factors for the uptake of such services are the price and location. If it’s
expensive, consumers would rather wash their own laundry or go for a cheaper laundry
option.

Meanwhile, a good location is all about convenience. If it’s nearby to a customer’s

home or workplace, the likelihood of them engaging such services is higher.

However, it’s also noteworthy that almost every household in Singapore owns a
washing machine and thus does their own laundry. Unless the fabric requires special
care like dry cleaning, it’s safe to say that the demand for laundry services is low in
Singapore.

2. Bike/E-Scooter-Sharing

Image Credit: CycleLogy

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It’s safe to say that the heyday for bike-sharing here is now over, with the exit of
multiple bike-sharing firms such as Gbikes, oBike, Ofo, Mobike, ShareBikeSG as a
testament to this.

The industry’s decline is in sharp contrast to its promising start, with Ofo and oBike
initially raising millions of dollars from investors and expanding quickly to other
markets.

However, issues such as indiscriminate parking by users and abuse of the bicycles has
put the brakes on these companies’ growth.

The abrupt exit by oBike last June, which left many users in Singapore scrambling for
their deposits to this day, tarnished the troubled industry further.

For e-scooter sharing, the recent ban of e-scooters on footpaths due to the safety
hazards it poses have sparked a wave of resentment, especially among those in the food
delivery sector.

Retailers were hit hard by the e-scooter ban — they are left high and dry, stuck with
stockpile and money invested in certification for devices. One retailer, Mobot, said that
it has about 3,000 e-scooters worth S$1.5 million that it suddenly cannot
sell.

Firms providing e-scooter tours were also affected by the footpath ban, even
causing one operator to close.

Regardless, since Singapore’s transportation system is efficient and well-connected,

bicycle and e-scooter-sharing are never seen as a ‘need’ that helps to solve a pressing
pain point for users.

Granted, it could be useful for students and staff in large campuses, or blue-collar
workers to travel to more inaccessible places like industrial areas and dormitories.

However, it is not comprehensively beneficial for all group of commuters so do they

really count as an ‘urban transport solution’ for your everyday needs?

Unlike booking cars for long-distance rides, bicycle and e-scooter sharing only bridge
first- and last-mile gaps such as commuting to a nearby MRT station.

That said, their usage is smaller in scale when compared to other transport options. It’s
no surprise then why bicycle and e-scooter sharing services pale in comparison to the
relatively successful ride-hailing services in Singapore.

3. Food Delivery

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23/12/2019 Here Are 5 Business Ideas That Just Won't Work In Singapore

Image Credit: Marketing Interactive

Food delivery is undoubtedly thriving in Singapore as our appetite for convenience

increases.

When honestbee halted its grocery delivery arm last year, it cited “stiff competition”
in the groceries markets in Singapore as it faced competition from the likes of Cold
Storage, NTUC and RedMart.

It ended up focusing on its core grocery business to reduce business operating

costs. The same reason can easily be said as to why it ceased its food delivery services.

The reality is that it’s hard for new players to rival the ‘big three’ (namely GrabFood,
Deliveroo, Foodpanda) unless they have a unique proposition. Even so, it won’t be easy
to sustain the business.

To date, many niche food delivery players have exited the market.

Examples of which include Plum, which dispatches gourmet food at cheaper prices;
Porterfetch which satisfies late-night hunger pangs with after-hours delivery; and
Fastbee which delivers hawker food to workers in ‘ulu’ (remote) areas such as
industrial and business parks in the West.

Fastbee in particular, adopts a unique model whereby it allows users to place lunch
orders via its mobile app. These meals will then be delivered to designated vending
machines for self-collection.

The menu is specially curated, with food blogger-featured dishes such as

the Hainanese Scissors Curry Rice and Thaksin Beef Noodles.

However, people weren’t used to the vending machine concept and their lack of promo
codes rollout discouraged users from trying out the service.

The problem is that it didn’t have a “deep warchest” to do so, or launch extensive
marketing efforts, which in hindsight, caused them a great downfall.

It had difficulty raising funds to support its growth, and even after scaling down, they
found it hard to hold the financial fort.

Its monetisation strategy also leaves much to be desired as it only relies on a low
S$1.50 delivery fee as its main source of income. Unlike most food delivery companies,
it does not take a cut from hawkers or impose a minimum order requirement.

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While it relied on aggregating orders and eliminating point-to-point deliveries to stay

lean and keep costs down, the start-up clearly required economies of scale to turn
profitable.

4. Peer-to-peer Errands Services

Image Credit: TaskAmigo

Time is money, so it’s no surprise that people want to make money off people who
simply don’t have time on their hands to run errands on their behalf.

Many startups in Singapore have tapped on this business idea: FlagAHero, TaskAmigo,
TaskIsland and Taskporter, just to name a few.

On these portals, users can post errands and in turn, job seekers or runners will bid for
the jobs and help you complete them. The errands could be as simple as helping to
deliver something, or assembling a furniture.

These platforms will then take a cut from each successful job.

The problem for such concepts is that Singapore might be too small a market for it to
work. For this model, one would need a sizeable market of customers with high
disposable income and little options of cheap labour.

Demand was also pretty low for people to sign up as runners. For simple, menial tasks,
posters typically place a low price for the job.

This doesn’t create any monetary incentive for them to take up the offer, and even if
they do, you cannot expect ‘high quality’ work in return for it. This creates a vicious
cycle in which the platform will generate unhappy customers when jobs are not taken
up or not done right.

5. Powerbank Rental Services

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Image Credit: PowerNow

Singapore has one of the highest smartphone penetration rates, and it’s evident that we
can’t live without our phones — so much so that the term ‘nomophobia’ (no mobile
phobia) has been coined.

Banking on this complex, Singapore startup PowerNow (previously known as NOMO

prior to acquisition) started up a powerbank-sharing service to allay users’ anxiety
when their phone battery falls lower than a certain percentage.

Their pay-per-use business idea is simple: rent a powerbank (comes with charging
cables) for only $1/day and you can return it at any one of their locations at the end of
the day.

But is there a real demand for such services? Many people already own powerbanks,
and they are light enough to bring along when you’re out. It’s pretty fuss-free, you can
even slip it into pockets if you’re not bringing a bag along.

In the event that you didn’t bring your powerbank out, we tend to simply borrow one
from our friends.

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Alternatively, there are existing cool technologies that actually make powerbanks
redundant such as charging phone cases and Huawei’s reverse wireless charging or
Samsung’s Wireless PowerShare.

While the rental fees are low, the other important consideration is the location of these
powerbank rental sites.

PowerNow isn’t clear on its availability, but it generally listed its availability:
transportation hubs, shopping malls, F&B outlets, entertainment joints, event spaces,
tourist attraction spots and medical centres.

It needs to be readily available islandwide because there is no way that one is willing to
travel someplace else just to keep their phone ‘alive’. Most likely, they will just bite the
bullet and survive the rest of the day with no phone.

Featured Image Credit: honestbee / CycleLogy / Marketing Interactive / PowerNow

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TAGS: BIKE SHARING BUSINESS IDEAS E-SCOOTER SHARING FOOD DELIVERY POWERBANK RENTAL

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Nthetheya Tsoai
Food business i do really like it
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