SINGAPORE: Hotelier and restaurateur Loh Lik Peng is the man behind Unlisted Collection, an umbrella brand of boutique hotel properties and restaurants in Singapore, London, Shanghai and Sydney. The hotels include Hotel 1929 in Keong Saik Road and among the restaurants is the award-winning Restaurant Andre.

Loh’s focus on staying relevant and repositioning the business for new opportunities will see Unlisted Collection’s New Majestic Hotel in Bukit Pasoh Road close on Jun 1, and he says there are plans to develop it into a private club.

The hotels are set within heritage buildings which have been sensitively restored and that’s really where his interest lies – in ensuring that not just the facades but the interiors of the buildings are preserved as well.  

Loh was born in Dublin but came back to Singapore with his doctor parents at the age of one. At 12, he returned to Dublin and was enrolled into a boarding school. A trained lawyer, he came back to practice law in Singapore in the late 90s, but eventually left to make his start in the business of hotels.

While most of his projects have been successful, he has had his share of failures and even run-ins with the law when it comes to labour issues.

He went “On the Record” with Bharati Jagdish about this and the gentrification of heritage areas in Singapore. They started first by talking about his start in the industry at the height of SARS.

Loh Lik Peng: I think at that time, ironically, what helped us was that we were a very small hotel. There was a perception that you are more likely to get SARS when you went to a large hotel because there would be more people there. And consequently, people continued to patronise a smaller hotel. We were a very small hotel. We were 32 rooms. The restaurant was wildly successful from day one too.

Bharati: You’ve actually stated in a previous media interview that when you were in the law, it was rather depressing because you were dealing with bankruptcy cases. Weren’t you at all concerned that you might go the way of some of your clients?

Loh: I was aware that the bankruptcies were due to the Asian crisis. I came into practice at the tail end of the Asian crisis, and a lot of my work was associated with that. The crisis was really all about the euphoria of the Asian boom. What I took away from that was that there were many opportunities that were available because of the crisis.

I was doing a lot of processing of mortgage documents and came across these properties that literally, 4-5 years ago, were valued at 3-4 times what they were selling at auction now when the mortgage actions took place.

I took that as an opportunity to go into something different rather than fear taking the plunge. To be honest, at that time, at that age, the opportunity costs were low. I couldn’t do the same thing now. For one, the property prices are very different now. For another, the opportunity costs at this stage of my life, with my children and wife and all that, are higher. It would be a totally different scenario. So at that time, what would it have cost me? I could just go back and practice law.

Bharati: You’ve said before that, for a long time, you thought you would go back to the law.

Loh:  I think I do miss the law in some ways, not that I am inclined to going back into practice, but I would say it was an intellectually interesting profession and it was always exciting, and you do different things all the time in law. In a sense I can see myself being happy in the legal profession, but I don’t miss it anymore because what I am doing now is equally rewarding and fun.

Bharati: And more lucrative?

Loh: I don’t know about more lucrative. In some respects, maybe. But it’s more the autonomy that you have. The thing about lawyers is that you are always solving someone else’s problem. And people come to you when they are in trouble. It is one of those professions where you are always encountering other people’s problems, you are always trying to solve other people’s problems and it can get a bit tiring. I’d rather be solving my own problems I guess.

PRIVILEGED BACKGROUND

Bharati: Some might say you come from a privileged background and that’s why you have the courage to do what you did, there is always a safety net. You had some support from your family as well at the start. Others however, who do not enjoy that privileged background, may think twice about taking some of the risks you have taken over the years. What do you have to say to that?

Loh: I have to say to some extent it’s true. My parents gave me every opportunity that life can offer. I think in that respect, it was easier for me to get a start. But at the same time, it was also more difficult. I came from a family of doctors. Entrepreneurship was never part of my upbringing. In those days, growing up in the 80s, nobody talked about entrepreneurship. You got a profession, you stuck to it and that was the way to success – an iron rice bowl so to speak.

Both my parents are doctors, my elder sister is a doctor, I became a lawyer, my younger sister is an architect. We were all put on that kind of professional path. For me, taking that plunge, from a financial point of view, was perhaps less risky than someone else, but from a personal, from a professional point of view, at that time, it felt risky for me. But the rewards from taking that adventure made it justifiable.

Bharati: Was there a fear of failure nevertheless, in spite of the fact that you could always go back to mommy and daddy for help whenever anything went horribly wrong.

Loh: Yeah absolutely, to this day there is still that sense of fear of failure. I have always thought that was necessary actually. To be honest, every time I felt complacent about doing something – that this is definitely going to be a winner – I fell flat on my face. It’s happened a few times. You have to have a real deep sense of fear when you do a project; the moment you feel comfortable in it is often the time when you make a mistake. 

So I always feel that a great sense of fear is always necessary when you do a project.

Bharati: How do you describe your business philosophy?

Loh: Depending on what aspect of the business it is. For the restaurant, it is always about harnessing the talents of the chefs out there. People are always quite surprised about how little hands-on activities I take with the restaurants. The restaurants are really run by the chefs and the managers. But it’s also really about making sure that all the chefs that we have are doing things that are unique, doing things that the consumers want. I always say to my chef: You have to cook the food you want to eat, but if the consumer doesn’t want to eat it, you are going to be out of business.

Restaurants are not entirely creative endeavours. They are creative endeavours to some extent, but they are also businesses. Somebody’s got to come in and eat your food. If they don’t, you have to pay the bills or close down. A lot of chefs are self-absorbed about things they want to eat, or their creativity and that’s usually a mistake, because unless your creativity is at such a level that people are saying: I am going to buy into your creativity, you fail as a business.

I make sure I give them the right incentives to do it right, whether it’s equity stakes, or profit-sharing. However the business is structured, I make sure the stakeholders have a real interest in the business.

The hotels are a bit different. Hotels tend to be a bit more real-estate heavy. They tend to have much longer horizons. It takes at least 4-5 years to get the hotel off the ground. From when you purchase it to when it opens, it’s very capital intensive. The philosophy for that is different. I always try to look for properties that are a bit off the beaten track.

We always do conservation properties. Buildings with a lot of character, fairly unique buildings, usually in unloved neighbourhoods, and we try to make them really interesting, so that people would come even though it’s not really in the centre of town.

So if you look at our earlier hotels, they’re in places like Keong Saik Road. Keong Saik Road was a notorious area at that time. Places like Bukit Pasoh. These places are in Chinatown. But when we launched these hotels, these areas gentrified very quickly.

When you look at our hotel in London, in Bethnal Green, it’s a former town hall of Bethnal Green and a spectacular old building, in a really rough part of town at that time. Same in Sydney, the Old Clare Hotel’s neighbourhood called Chippendale, which when I visited the site, the ground was full of used condoms and needles. It was rough, but when you go to Chippendale now in Sydney, you won’t recognise that description at all. It’s now really trendy.

GENTRIFICATION AND BLAME

Bharati: You talk about gentrification as if it’s a good thing. But some have railed against gentrification, including of areas like Chinatown. It isn’t what it used to be and has lost its old world spirit. I don’t think anyone wants condoms or needles on the streets as in the case of the old Chippendale, but they still want that flavour of Chinatown which seems to be lacking, or in Kampong Glam today. Over the years, people have said Little India still has its original character, but everywhere else gentrification has gone overboard. What do you have to say to that?

Loh: I tend to be one of those who agrees with those statements …

Bharati: In spite of the fact that you have contributed to the gentrification of those areas?

Loh: Yeah. People always put me on the list of people who over-gentrify.

Bharati: One of the “bad guys”.

Loh: One of the “bad guys”. But I do agree with that statement. I think parts of Chinatown have become very un-Chinatown. If I recall what Keong Saik Road was like before we first opened Hotel 1929, the old kopitiam was still there, the old coffee grinders, the brothels, the working girls who sat in the coffee shops with their clients. All those things have disappeared, and the character has changed a lot. Now you have Brazilian restaurants, everything else but the kopitiam. It’s a bit sad. It’s lost a large chunk of its original flavour – the things I found interesting. But I don’t know how you freeze that moment of time.

Bharati: Agreeing that gentrification has gone too far doesn’t absolve you though.

Loh: I would say those areas were ripe for gentrification anyway. Did we contribute somewhat to it? Probably. I guess I haven’t really thought of it in those terms.

Bharati: We should note that when it comes to the buildings that you’ve taken over, you have made an effort to preserve them inside and out, but while you say you agree with the camp that says gentrification in general is overdone, you clearly are contributing to the gentrification process yourself. Why do that?

Loh: But I believe it would have happened anyway. A lot of these businesses were no longer viable in that area because of high rents. A lot of the gentrification was driven by rents, so the businesses that can afford the rents tend to be more high-end lifestyle businesses rather than traditional businesses, largely because consumers don’t want to pay above a certain amount for traditional products and services.

To be honest, I think that aspect of control has slipped out of the hands of any one person. Perhaps the government or the Urban Redevelopment Authority (URA) could have done something about it. But the reality is that these streets are owned by private landlords, and in the end, they dictate who they want to rent to and for how much. The market dictates what the rent is. The people who can’t pay that rent get pushed out. 

The reality is that the vast majority of Singaporeans are not willing to pay more than S$2-S$3 for their mee pok, not willing to pay more than S$1.20 for their kopi-o. So these people are being pushed out. People will happily pay S$4 for their cappuccino. So the guys setting up their cappuccino stores are going to make much more money than the guys who do the traditional kopitiams.

Bharati: You’re saying this is consumers’ fault?

Loh: Absolutely! Absolutely. It’s the fault of Singaporeans. When people complain that the traditional trade is being pushed out, they must realise it’s also because they are not willing to pay the right price for these traditional goods. They want to pay the price their parents paid, or the prices they paid in their childhood. Those prices are not relevant in today’s Singapore, so these businesses get pushed out to their margins, or get pushed to the government-subsidised hawker centres, because people are not realistic about the prices people should really charge to make a decent living in modern Singapore. That’s the reality.

Bharati: You don’t take any responsibility at all for creating a demand for higher-end services through clever marketing?

Loh: No, because these market forces are much, much wider than any one person. If we hadn’t stepped in there, another person would have taken that space and rented it for higher rent and staff and for another business. We are, by far, not the largest player in this space or the only player in this space. It’s our job to create demand through clever marketing, and we try to do that as much as we can, and every one of our competitors does the same.

But ultimately, the demand is driven by the consumer, and they want to have cappuccino and have pasta, and have lamb shanks for lunch. They are not willing to pay the same price for char kway teow as for pasta.  They are not willing to pay enough to cover the char kway teow and the higher rents of the char kway teow seller.

Bharati: Do you see this changing at all considering that more and more, we are hearing voices saying they don’t want to lose all of these things?

Loh: I think there is a nostalgia for what they see as the old Singapore but that doesn’t necessarily translate into people changing their habits. People still want to go to a hawker centre and have very cheap hawker food, even though they realise that the hawkers are not making that much money from it, or they only survive because of effectively a government subsidy with the rent.

At the end of the day, I think the consumer has to play the biggest part in saying: Look, the prices my parents paid, that I paid in my childhood, are no longer relevant in today’s Singapore. I have to pay S$5-S$8 for a plate of mee pok or a bowl of wanton mee. Maybe still slightly below what a pasta would cost, but definitely more than what I’m paying now.

Bharati: You often make great efforts to conserve not just the facades but the interiors of the buildings you’ve taken over as well – something that you say not many people do here. One would think that your love of heritage would make you want to try to preserve the local character of the areas you have businesses in as well. Why haven’t you done more to maybe pressure the authorities to intervene here? Some of these areas have conservation status, so the buildings are preserved. Perhaps the authorities could take it further.

Loh: Well, I am not sure the government has the ability to do it too without really putting a lot of pretty heavy-handed measures in, saying you can only rent to a kopitiam, or you can only rent to a zi char stall.

Bharati: Or set rent at a certain price

Loh: Or rent at a certain price. You can’t do it in a country like Singapore with a free and open economy. You couldn’t possibly put those restrictions in place. I think at the end of the day I am not sure whether the government can control the businesses that go into the buildings once these buildings are in private hands. I am not sure if that’s the appropriate level of control.

Bharati: Some people believe the government could do more, but you obviously believe the business imperative will win out.

Loh: Yes, it’s a free and open economy. I think it’s really more about getting consumers to understand the prices they have to allow these traditional businesses to charge them in order for their businesses to survive.

Bharati: While the business people need to survive, consumers would say they too need to survive. They have financial constraints to deal with, families to support in a high-cost environment.

Loh: Sure. Then the reality is that you can only make the traditional businesses work in subsidised hawker centres. You have to be very clear that the government is, in effect, subsidising these spaces. In private areas that are largely owned by private landlords, these businesses would largely not be sustainable; that’s the reality. But nobody really has that conversation and it’s about time we did.

ON HERITAGE AND NATURE CONSERVATION

Bharati: There’s been a lot of debate over heritage and nature conservation in general in Singapore lately.  At the centre of this debate have been places like Bukit Brown and the Central Catchment Nature Reserve. What are your views on how these debates are unfurling?

Loh: I would say five years ago, these conversations didn’t really take place. And I think Bukit Brown was a good starting point in civic conversation about what happens to these spaces. If you had asked the Land Transport Authority (LTA) 5-6 years ago, they would probably not have thought it a good idea to consult the public about where they put their highways, or whether or not particular pieces of land they need for road building would hold particular value for particular segments of the community.

I think that was really an awakening for a lot of government agencies. The Bukit Brown debate was a big awakening for institutions like the National Heritage Board (NHB). Those types of conversations are now happening, and that’s healthy. It’s really good, it’s all about finding the balance between conservation, between development, between land value, between traditional use. All those conversations are now happening.

Bharati: But clearly, in spite of those conversations, many feel not enough is being done to listen to the voices of those who want these places kept in their original form or at least have their original intent and character left untouched.

Loh: My own perspective of it is that for there to really be an engagement with the community that really results in a change in government policies, there needs to be an interlocutor with real teeth. And this interlocutor has to be able to say to LTA: You can’t put the road through this area, for instance. I don’t know if the government is ready to have a conversation with an interlocutor with real teeth.

I think at this point in time, perhaps the government institutions are more comfortable with having conversations and making adaptive changes to the plan. I would strongly support it. And if you want an institution with teeth that looks after heritage, you need to have a public conversation about what form that takes.

Bharati: Do you have any ideas on what form it should take?

Loh: I haven’t really formed my own ideas of what that might be. I think first of all, the public themselves need to buy into what form that creature might take, and how much teeth it might have, and to what extent might it crimp development. There is always a price to pay, right, for these things? And the right balance would come with time. We are probably still grappling with those issues now. I am not sure if I have an answer for it. I am not sure if anyone has an answer for it.

DEALING WITH LABOUR SHORTAGES AND DISRUPTION

Bharati: I want to move on to talking about the hospitality industry. How are you dealing with players like Airbnb, and all of these other services that have disrupted the sector in the last few years?

Loh: At the end of the day, hotels have to differentiate themselves. Airbnb can never match the services of a hotel. Hotels come with restaurants, housekeeping, room service, and you have to produce those services at a high enough level that people are going to say to you: That’s great value, I am going to pay you that little bit extra to stay with you. Those are the services on which Airbnb can never compete with you because the very nature of the market is fragmentary.

You can have hundreds of landlords with small properties here and there. They can’t ever service the customers in the same way a hotel can. You have to differentiate yourself and make yourself much more special than an Airbnb. It’s the same in the retail industry. You have to give customers an experience that they can’t enjoy online. You have to make it worthwhile for them to come out and even pay a little bit more.

Bharati: Let’s talk about labour issues – labour costs and labour shortages in Singapore, which are a big issue in the F&B and hospitality industries. A couple of years ago, one of your restaurants was in the news. It was being investigated by the authorities for hiring foreign workers without valid work permits. I understand you were cleared but the issue is that one of your managers on a particularly busy day, called up some part-timers he knew from his previous job, and those people were not vetted by you.

Loh: It was a one-off incident, and should never have happened. We have hundreds of employees and we need to do a better job of training everyone to follow rules and procedures. Will there be some gaps? There always are some gaps. We try to make sure that there aren’t but we are far from perfect, and all we have to do is to redouble our efforts to make sure these gaps are as small as possible.

Bharati: It does say something about the situation on the ground though. Clearly your businesses, too, are suffering from the effects of the labour shortage.

Loh: I think the manpower shortage is here to stay. We have been told in no uncertain terms that the government is not in the mood to release more work permits. I think at the end of the day, the political reality is that they probably can’t. This is not unique to Singapore.

We operate in markets like Australia and the UK and we see exactly the same situation in those countries. The UK voted for Brexit largely because of immigration. If we look at Australia, they’ve tightened visas tremendously. America is the same. Donald Trump got elected largely on a “let’s kick the foreigners out” agenda. All these things are happening in all sorts of markets. It’s not just happening in Singapore. The political reality is that for governments nowadays, the number one priority is to look after the electorate, otherwise they don’t get voted into power.

Bharati: You make it sound like a populist decision. While you acknowledge this is the political reality, you disagree with its premise?

Loh: I think that immigration has been a boon to Singapore. It’s been a boon to countries like Australia and UK.

Bharati: But it has also caused a lot of strain on jobs that the locals might want as well, not just jobs that locals are not willing to do. It’s caused a strain on infrastructure.

Loh: I agree that housing and infrastructure has not necessarily kept up with the immigration population growth as well. I think this thing about immigrants taking jobs from Singaporeans is true – in some sectors. In other sectors it might not be true. Do I see an enormous amount of Singaporeans going into construction and hospitality while these sectors are being trimmed by foreign manpower they can hire? I very much doubt it.

Bharati: So you are saying that while there need to be curbs, the curbs need to be more targeted, even yet more targeted than they are now?

Loh: More targeted and nuanced. At the same time, it’s the feeling of being overwhelmed in your own home country. When you are sitting down in the MRT and you are surrounded by foreigners, you feel then that you are not in Singapore anymore, or you feel that you are somehow transported to the Philippines or China.

Bharati: Don’t you think that matters?

Loh: It matters. It’s about the feeling of insecurity as Singaporeans. So we need to do a better job of integrating these immigrants, and that’s true of a lot of the places in the developed world like the UK, America, because at the end of the day, these issues of anti-immigrant feelings are more than just about stealing jobs. It’s about a sense of dislocation, a sense of not being in your own country anymore, the lack of control. I totally get it.

Bharati: You seem to imply that the way to deal with it is not to put curbs on foreign manpower, but rather to think of better ways of integrating these individuals.

Loh: I do, and I personally feel that you need to do a little bit of both – curbs and integration. But we are not doing enough of the latter. We need to do much more in terms of integrating the people who are here already. But, at the end of the day, would we realistically need to have curbs on foreign manpower? Yes, I think so, because it’s again one of those things where having lots of immigrants is not an unalloyed good.

Our preference in whichever part of the world is to hire locals because it’s much easier to hire a local than to hire a foreigner, because they are well-integrated already. They understand the local culture. You don’t have to worry about them being homesick or finding accommodation and all those type of things. All things being equal, any businessman would hire a local, but they are not often available for the jobs that you need to hire for. It’s actually much more expensive to hire a foreigner than it is to hire a local.

Bharati: Today yes, because of the levies and all the other requirements you have to fulfil.

Loh: Why we hire a foreigner is because we can’t find the right skillsets in locals or the right people who want to come in to do those particular jobs.

Bharati: You have to compensate Singaporeans well though, in order for them to do these jobs. Especially since you have high-end establishments and you charge customers a lot, there’s no excuse for not paying your staff more. They have a higher cost of living to contend with.  

Loh: Yes, absolutely. My payroll has gone up 25 per cent in the last 5-6 years. There was definitely still a stigma about the service industry in Singapore before – that it was servitude. I think it’s changed over the years, but I think the larger issue for us in the industry is the lack of growth in the labour market.

It’s not really about getting people excited about the job. There are some people who are excited about the job. If I look at Singaporeans coming to the market now and working for us, they are as enthusiastic as any foreigner we have, they are as talented as any foreigner we might have and in many cases, much hungrier and much more talented, but the reality is that there is not enough of them.

I think it’s the fact that we have a very restricted labour supply and low fertility rate. If you look at the government statistics of Singaporeans going into the labour market, the net growth of labour from local supply, meaning PRs and Singaporeans, entering the labour force, we are at zero growth. Singapore has no more workers to give to the labour market.

Bharati: While so many business people like you complain about the labour shortage, there are many who also take this opportunity to boost productivity through technology. Some in the F&B and hospitality industry have been embracing automation.

Loh: I think the idea of automation is good, I think if you can remove a lot of the mundane jobs by automating them that’s great. I am not sure a lot of the jobs we have in our industry are mundane. I am not sure a lot of the jobs can be automated. Certainly not in the short term. I think a lot of it depends on the segment of the market you operate in.

If you are going to Restaurant Andre, and you are paying for a very special experience, and you want that very special experience, would you be happy to order your menu and drinks off an iPad, delivered by a robot? I think the answer is “no”. If you want the interaction, the conversation, you want to find out about the wines, the food, you want to be able to interact with your chefs, the servers. I think it really depends on the segment of the market you are talking about. Hotels are the same thing. 

SINGAPORE AS A TOURIST DESTINATION

Bharati: You have also been a member of the Singapore Tourism Board (STB) Tourism Consultative Council, so I am sure you have some ideas on what is needed to make Singapore an attractive tourist destination.

Loh: Actually my personal view is that STB has done a pretty good job. Not just STB, but the whole of government. If you look at the things we’ve developed. If you look at the Gardens By The Bay, the two integrated resorts, if you look at what is happening with the zoo, it’s 3-4 times the size of the present zoo, these things have been great for tourism. They have been massive catalysts. If we look at cruise business, all sorts of businesses now in Singapore, versus what they were 10 years ago, if you look at our tourism numbers now versus 10 years ago, if you look at our hotel rooms now versus 10 years ago, you have to conclude that STB has done a pretty good job.

I think they continue to do things that are relevant and expanding the airport is one thing. We are in a fiercely competitive region as far as tracking tourists are concerned, and most tourists that come to Singapore come from very far away, because Singapore is not a cheap market here. Are you going to get a lot of high-spending tourists from Vietnam coming to Singapore? You would get some, but it’s not a big component in your market. You want high-spending guys that have to come from far away, whether it’s America, Australia, Europe. China is a large growth market, and we have only scratched the surface of that. We have to continue to do the things we are doing quite well now.

We can never be a beach resort. We can never compete with Bali. But at the end of the day, as a city, as an urban getaway, Singapore is pretty unparalleled I think. I can’t think of a single destination, Bangkok perhaps, KL to some extent, but certainly they don’t have the sophistication of Singapore’s offerings.

Bharati: Some people say we need to do more of what we talked about earlier – preserve the local character of key areas in Singapore.

Loh: At this stage, I think you have to be careful about not “Disney-fying” the whole effect. You say you want to localise everything and you build a Peranakan village somewhere, things like that. It has to be carefully done. Leave the places that are currently authentic the way they are. Then we also have to operate on the level of Tokyo, on the level of London. We are no longer talking about Singapore as a quaint destination, a bumboat, one of those junks. We are looking at ourselves and positioning ourselves like Sydney.

HIS MOST POWERFUL FAILURE

Bharati: You mentioned earlier that you’ve had some pretty bad business failures. Which was the most powerful one?

Loh: A few years ago, we bought a hotel in London that used to be called the St John’s Hotel in Leicester Square. Those of you familiar with London would know that Leicester Square is one of the busiest places in London, probably in terms of footfall, the busiest place in London, just massive amounts of people.

This property came out and I was familiar with it because it was run by a very famous restaurant in London. It just opened, and almost immediately went to the hands of the liquidators and got offered to me. I looked at it and was like: “Wow! This place is in such a prime location.”

I was told that it went under because they spent too much on the renovations. Which was plausible, and I think they probably did. So I made a very quick decision, literally on turn of a dime, to make a bid for this property. In the course of two weeks, in the Christmas weekend, while I was on holiday and I wasn’t even in London, I purchased the property.

To be honest I didn’t do much homework, I looked at it and it’s got to work right? A year-and-a-half later, we sold the hotel and it was a tail-between-the-legs moment for me.

Bharati: What went wrong?

Loh: Here’s the thing, we purchased this hotel, we refurbished it, not a lot, but we refurbished it. The hotel itself was reasonably successful. The restaurant, from a critical point of view, was also successful. We won a Michelin star within 3-4 months of opening that restaurant. But nobody came. So the restaurant made huge losses every month. The hotel was doing OK.

But the reality is, we were opening a fancy restaurant in a very busy part of London which is full of tourists. They were there for stag nights and hen nights, who couldn’t give a damn about good food. They wanted cheap booze, burgers and ribs probably. And here we are, opening this high-end restaurant. I totally misjudged it and I walked into the same trap as the previous operators. I didn’t do my homework. I was totally complacent.

Bharati: At the end of the day, after doing all this work, what sort of legacy do you hope to leave behind?

Loh: I would like to leave behind a very interesting group of hotels. I hope to leave behind lots of happy customers, lots of happy people who have worked for me over the years. I want to be known as a really good employer, a really good boss, a really good businessman. But I don’t have any big ambitions. I don’t have any big hopes beyond that, really. I don’t want to rule the world. I don’t really want to conquer the business world. I am really quite happy and content to do the business that I do, and to open the boutique hotels and to get the critical acclaim when we open them.

Beyond that, I am not particularly ambitious. I don’t want to do more than what I doing now.

SINGAPORE: Apple fans turned out in force on Saturday (May 27) as the US tech giant’s first brick-and-mortar store in Singapore opened its doors.

Ahead of the official opening at 10am, an Apple representative said there were more than 200 people queuing around Knightsbridge Mall along Orchard Road, with some in line as early as 5pm on Friday.

First in line was Mr Peter Xiang who has been in line for more than 10 hours. The 25-year-old Chinese national, who has been to several Apple Stores in China, decided to fly to Singapore on May 23 for the opening.

“I’ve been on standby here for more than 10 hours. No matter, I’m still excited (but) a little tired now,” he told Channel NewsAsia. “Looking forward most to (getting a) Apple T-shirt and maybe I will buy something. Maybe some accessories.” 

The two-storey Apple Orchard Road is also the first official Apple store in Southeast Asia.

“Generally, Apple stores in Hong Kong, Tokyo and many other cities have turned out to be a destination retail space. Tourists as well as locals are often drawn to the stores to experience the offerings as well as to enjoy the new concepts,” said Mr Desmond Sim, head of CBRE Research for Singapore and Southeast Asia.

“Hence, it is not surprising that this will also be the same for the first Singapore store.”

Apple has nearly 500 stores in 20 countries worldwide and as of April, welcomes more than a million visitors a day. It expects the newly unveiled Singapore store, which it sees as a “modern-day town square”, to be one of its most popular around the world.

Apart from having its core products like the iPhone on display prominently on the first level, the store will also be conducting free hands-on educational sessions on topics such as photography and coding. These sessions will be conducted in a space called the Forum on the second level, which is equipped with a large screen and break-out tables.

Industry experts say the incorporation of activity-based and experiential-based concept stores is synonymous with brands such as Apple. It also serves as a strategy for brick-and-mortar retailers in their battle against e-commerce.

“The business of retail is not only about pure transactions but it has a high experiential component that consumers yearn for and is drawn to. This is especially so for new technology for lifestyle,” said CBRE’s Mr Sim. “Not to mention that the business of retail is also a very visual business. Design of stores will attract crowds.”

One unique design at the Singapore Apple Store that has caught much attention is the two curved stone staircases which drew inspiration from Apple’s new campus in Cupertino.

Industry experts expect the Apple Orchard Road, which opened after much reported delays, to be a boost for Singapore’s prime shopping belt and neighbouring stores.

Ms Christine Li, research director at Cushman & Wakefield, said: “Before Apple Store came to town, people could have been a bit bored of Orchard Road because there is little differentiation between Orchard Road and, say, a suburban shopping centre as people see more or less the same brands and retail offering.

“I personally believe that Orchard Road is not dead, but it needs to be exciting and entertaining in order for locals and tourists to visit it repeatedly,” she added. 

SINGAPORE: When we opened our flagship Ya Kun coffee stall at 1 China Street in 2001, we hung a corkboard on one of the walls, along with a stack of post-it notes and welcomed customers to leave their feedback or thoughts on their dining experience. 

Initially, posts were sparse, but every night, my mother would go to the stall, take them down and painstakingly reply to each of them – thanking them for their patronage or addressing their feedback – before pinning the replies up the next day.

Before long, this chat board caught on and we were getting daily comments. Regulars and tourists alike were pinning up their thoughts, leaving comments and even stating where they hailed from and how much they enjoyed this uniquely Singaporean breakfast. 

The list grew quickly to include notes from visitors hailing from Japan, the Netherlands, Mexico, Switzerland and South Africa. It did not take long for us to realise that while we were hosting the world at our stall, we could also bring our kopi and kaya to the world.

That was 16 years ago. Today, Ya Kun’s coffee is served in nine countries and in more than 100 coffee stalls.

Beginning with Indonesia, Ya Kun now has stores in Taiwan, South Korea, the Philippines, Myanmar, Thailand and China. In a matter of weeks, we will be proudly brewing for the first time in Macau as well. 

NO SHARED HERITAGE OVERSEAS

While we have expanded to so many locations overseas, every store runs in a manner that is still recognisably Singaporean.

Every outlet still brews their kopi and teh using the pot and sock coupled with the same pulling and occasional twirling. The kaya toast remains toaster grilled and the soft-boiled eggs are cooked to marble-like consistency.

We don’t do this because of vague sentimentalism, much as we take our heritage and brand very seriously. We do it because it’s a winning formula that seemed to have worked with consumers. 

People from all over the world tell us they like the traditional Singapore kaya toast breakfast set, despite coming from vastly different backgrounds and culinary tastes. The Koreans like the coffee for its sweetness and fragrance, while the Westerners love it for its strength and simplicity. The Japanese love the kaya toast for its crispiness while the Chinese love dunking it into the soft-boiled eggs. 

The soft-boiled eggs are the only exception to the unreserved welcome our products receive everywhere. Over the years, especially in cultures not used to having such eggs for breakfast, we have learnt not to impose that particular style of eating on any foreign stores.

In such cases, a pan-fried sunny side-up egg offers a suitable replacement. It is a fine balance between adapting to the local culture and staying true to our menu and so each item is scrutinised carefully before introduction. 

Staying true to our Singaporean roots has been the bedrock of our expansion philosophy. We don’t do this because of values of integrity, sincerity and accessible to consumers, much as these are important business concepts that we hold dear. 

You see, Ya Kun has always been a family-owned, family-oriented, home-grown business and elements of that kinship must be evident whether we are in Indonesia, South Korea or China.

It is not easy to bridge the cultural and commercial gaps when you expand overseas.

Among the different challenges that we have faced taking the brand abroad, one significant hurdle is something I call the issue of shared heritage.

The story of my grandfather Loi Ah Kun, the kopitiam culture and the traditional kaya toast breakfast all lends itself to a heritage that Singaporeans share and a common memory that we can all tap on. 

This is not the case when we break ground overseas. For example, countries like Japan, South Korea and Myanmar have their own breakfast culture and the concept of a heritage coffeeshop is as foreign as hamburgers.

To overcome that, we have repositioned ourselves as a contemporary, trendy cafe that serves an alternative brewing style and type of coffee from what they are familiar with.

Close neighbouring countries like Indonesia and Malaysia may share similar culinary experiences and eating habits as Singapore. But when we move further north, all that sense of nostalgia quickly dissipates.

This means that unless someone has a fond experience of having breakfast toast and drinking kopi in Singapore before that, we are simply an alternative coffee chain that serves a stronger kind of brew and a greenish odd-looking coconut jam called kaya on toast.

Breakfast is a highly personal routine to most people and to get someone to try something new is quite difficult. 

NO RIGHT COUNTRY, JUST RIGHT TIMING

For our business, this means that we require a much longer runway to establish ourselves in that country’s market. The harsh truth of what it takes to expand overseas is that you must be prepared to be in it for many years to understand the people and the culture and despite all that, success is not guaranteed.

So we have often been asked how do we strategise and select the right countries to enter, to which my reply has been that there is no right country, just right timing.

Indonesia, our biggest presence outside of Singapore has close to 30 stores and over the past 10 years, we have grown to be a part of the local community. 

In Myanmar, a Ya Kun coffee stall greets you both at the airport, as well as when you arrive at the city centre.

There is a difference of 10 years between the establishment of Ya Kun in Indonesia and Myanmar, and yet both are enjoying success in their respective stages of the business cycle. 

A SUITABLE PARTNER IS THE MOST IMPORTANT THING

While we apply a common lens when considering whether to enter a market, for example taste profiling, demographic study, economic situation and dining habits among others, the most important criterion of them all is finding a suitable partner.

We are under no illusion that we understand the intricate habits and behaviours of the locals and their receptivity towards a foreign brand. Patience and perseverance are key traits in locating the right partner, one who shares the same values and vision for building the brand in each respective country.

Government agencies like IE Singapore have also been instrumental in providing both the support and the confidence when we explore new territories. 

Of course you can have the best business concept, strategy and systems, but you also need good people who make success a reality.

When we opened our inaugural store in Shanghai, China, we seconded one of our best trainers to manage the outlet and brew the coffee there. He was stationed at the stall during operating hours and would regularly give us information on the profile of our customers, their ordering habits and their requests. 

One particular afternoon, he informed me, in real time, that there was a gentleman sipping coffee in our outlet with tears trickling down his cheeks. Naturally, I panicked and asked him to approach the customer to see what was wrong.

It was only after a few moments did I receive a reply that this gentleman was Singaporean and the aroma of the coffee in the winter brought back memories of his native country. It made him reminiscent of home. 

This incident drove the following point home to me: While expansion overseas is the next phase of our business strategy, we are invariably striving for something bigger than simply setting up more outlets.

With each outlet we open and every cup of coffee we serve, we are connecting with our fellow Singaporeans overseas and creating a new memory for the local customers.

We are gently and humbly promoting the Singapore lifestyle in new areas and reaching out to them to introduce what has become second nature to us: Our traditional breakfast and morning routine.

This is our way of life – whether it is breakfast with our families, a post-lunch chat with colleagues or a business discussion over a cup of kopi, our coffee stalls are places that provide the means for these events to happen.

The ability to provide a glimpse – a taste – of Singapore is now what drives us to reach further and wider in the world as we look ahead. It is through this simple fare that we hope to bring people together in kinship, friendship and partnership. 

Jesher Loi is a grandson of Loi Ah Kun and currently the director of Branding and Market Development at Ya Ku Kaya Toast. 

SINGAPORE: Manufacturing firms from Singapore are exploring opportunities in the Central and Eastern European region, particularly in automotive and aerospace sectors which are strong engines of growth for the local economies.

Representatives from 17 Singapore firms co-led by IE Singapore and Singapore Business Federation have completed a week-long business mission to Poland and the Czech Republic, in conjunction with President Tony Tan Keng Yam’s state visits to these countries. Almost half of the representatives were from the manufacturing industry.

During his state visit to the Czech Republic, President Tan visited Interplex Holdings, a Singapore-headquartered precision engineering firm with a network of more than 40 manufacturing plants located in 13 countries worldwide, and with about 12,000 employees on its books.

Interplex Precision Engineering Czech Republic was established in Pisek, a town in the South Bohemian region of the Czech Republic, in 2000. It currently has 550 employees in its factory, about 10 of whom are Singaporean.

Interplex Holdings CEO Alessandro Perrotta cited key trends that are transforming the automotive industry and driving demand for more sophisticated precision engineering – environmental, connectivity and safety.

“The automotive industry is basically moving from combustion engine to electrical engine,” Mr Perrotta said. “What it means for us is now combining the electrical part with the mechanical part to create an integrated solution known as mechatronics.”

Amid the emergence of autonomous cars, Mr Perrotta said car manufacturers need very precise components that can withstand harsh environments, as “the car is making decisions to drive versus us controlling it”.

Citing growth prospects in “Industry 4.0”, referring to the use of smart technology in the manufacturing industry, Mr Perrotta said: “You have to be here. You leverage good proximity of Germany with a low cost manufacturing base, and you’re close to customers here.”

The car industry is a major driver for the Czech economy, accounting for more than 20 per cent of both Czech manufacturing output and Czech exports, according to data from the country’s business and investment development agency Czech Invest.

Latest statistics from Czech Republic’s Automotive Industry Association Auto SAP showed that production and export of cars grew by almost 11 per cent in the first quarter of 2017 compared to the same period a year ago.

To accelerate strengthening of ties between Singapore and Czech Republic economies, new partnerships were signed between IE Singapore and Czech Trade Promotion Agency, Singapore Business Federation and Confederation of Industry of the Czech Republic.

Dr Tan, who witnessed the signing of the partnerships, said that with both countries as gateways into their respective regions, it is important for Singapore and Czech Republic to remain open and expand networks as “fellow small states in an ever-changing environment”.

Singapore Business Federation told Channel NewsAsia that Poland and Czech Republic are very strong in automotive engineering, and CEO Ho Meng Kit said these economies are “more competitive” and have lower cost of manpower.

Mr Ho said these markets also provide closer access to the European Union market with about 500 million customers.

Singapore-based manufacturer, Dou Yee Enterprises, which provides materials and equipment for industries including data storage, biomedical, electronic and automobile industries, is part of the business delegation and exploring the possibility of setting up a manufacturing plant in Poland.

President Tham Wai Mun said he visited Czech-headquartered car manufacturer Skoda to gain “market knowledge and insights into its strategy”, as some of Skoda’s suppliers are among Dou Yee’s customer base.

Skoda accounted for more than half of Czech Republic’s automobile production in 2016, according to data from the country’s Automotive Industry Association Auto SAP. The Czech Republic produced a record of more than 1.34 million cars in 2016, up more than 8 per cent compared to the year before.

SINGAPORE: An hour to midnight, crowd barriers were erected up outside Singapore’s first Apple Store at Knightbridge Mall along Orchard Road – a sign of long lines expected for the outlet’s official opening on Saturday morning (May 27).

More than 20 people – several of them students – were spotted hanging around outside the store on Friday evening, even though security personnel were overheard telling people to “please go home” and to come back at 10am the next day.

Some told Channel NewsAsia they have been waiting as early 5pm. Some literally went the extra mile, having flown in from abroad to check out Apple’s first brick-and-mortar retail store in Southeast Asia.

”We are all prepared and ready to camp out here with snacks and drinks,” said Sariddej, who flew in specially with a friend from Thailand and another from Laos for the opening. “We are big fans of Apple,” he said, showing off an Apple logo tee and iPhone and iPod tattoos.

Earlybirds like Sariddej and friends were ushered into the nearby Grand Park Hotel to get wristbands.

Peter, from China, who was first in line, said he is “really excited” for the launch. Armed with a foldable chair, he said he planned to camp out overnight. “Attending events like this for me is pretty meaningful. I have been to many Apple Store openings in China and this is my first time attending an Apple Store opening in another country.

“Normally for an Apple Store opening, they will give out merchandise like T-shirts and playing cards, so I hope to get those.”

On top of collectors’ items, Apple has more in store for opening day, including a performance by Singapore Idol 3 winner Sezairi Sezali as well as photo walks with photographer Aik Beng Chia.