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More Japanese services firms in S'pore
Publication Date : 13-02-2013
Japan's services firms are saying konnichiwa to Singapore as they seek faster growth in the dynamic Southeast Asian region.
Four of Japan's five biggest law firms and all top three advertising agencies have set up a presence in the Republic, according to the Economic Development Board (EDB).
The latest arrival is Hakuhodo, the second largest ad agency in Japan and one of the top 10 in the world. It spent S$500,000 (US$402,000) to open a consulting office last month at TripleOne Somerset, with about 30 locally-hired staff and seven Japanese expatriates.
One of the main reasons the firm came to Singapore was that its clients did, said Hakuhodo, which has also opened offices in Thailand, Malaysia, Indonesia and Vietnam.
The maturity of Japan's domestic market has sent the country's firms expanding abroad, including to Singapore and other Asian countries.
Hakuhodo's main Japanese rivals, Dentsu and Asatsu-DK, already have offices in Singapore.
"Singapore and Southeast Asia are in the spotlight as a key market for Japanese companies, international conglomerates and Chinese and South-east Asian companies alike," said Shuntaro Ito, the general manager of Hakuhodo's international operation strategy and management division.
In addition, since so many diverse companies are already operating in Singapore, the city is "an ideal place to gather data, including data on trends in the growth market that is Asia", he added.
Singapore's position as "the best international hub in Asia" is also the reason Datasection, a Japanese social media analytics firm, is investing an initial US$110,000 to launch its Singapore office in April.
"Many global companies, which are our main target clients, are launching their headquarters in Singapore - more so than in Japan," said Mr Kento Hayashi, Datasection's chief operating officer.
Four of Japan's top legal firms have also opened offices here in the last 13 months: Mori Hamada & Matsumoto, Nishimura & Asahi, Nagashima Ohno & Tsunematsu and TMI Associates.
"In recent years, many Japanese companies have been accelerating their overseas expansion... and there has been growing interest in South-east Asian countries," TMI said in a statement.
"In order to respond to such requests from our clients and to provide more concentrated support locally, TMI decided to open an office in Singapore, the hub for Southeast Asia."
EDB's assistant managing director, Lim Swee Nian, said the investment agency has been seeing more interest from Japanese firms over the last few years.
Last year, 29 new Japanese companies registered their business presence in Singapore, up from only six in 2008.
This has also led to "a corresponding increase in demand for Japanese-specific professional services", he told The Straits Times.
In particular, consumer firms are flocking here to tap the growing middle classes in this part of the world, Mr Lim said.
In the last two months alone, five info-communications and digital media firms have announced new Singapore offices or collaborations with local companies, with more expected to follow.
Among them are Konami, Japan's second-biggest game software company, and Gree, Japan's largest mobile game developer.
Six other major consumer firms have either set up new offices or expanded their operations in Singapore over the last two years.
These include food manufacturer Nissin, beverage giants Suntory and Ito En, and Fast Retailing, which owns the Uniqlo stores.
In response to recent concerns about foreign firms pulling out of Singapore over tighter manpower curbs, Lim said EDB is working with companies to support their transition and believes Singapore's strong fundamentals make it still attractive to investors.
"We remain confident that Japanese companies with an active interest in tapping the growth of the pan-Asian market will continue to put Singapore on their radar screen," he added.
Japan is Singapore's top Asian investor, with a cumulative direct investment of S$52 billion (US$42 billion) as of 2011, the latest figures available.