RSM’s Qiu Wenqi: Prioritise market trends, invest in R&D, and implement digitalisation strategies

Businesses must also diversify markets, have contingency plans, and monitor geopolitical developments to mitigate risks.

Businesses across Southeast Asia are navigating an increasingly complex landscape marked by rapid technological advancements, evolving market trends, and geopolitical shifts. In such a dynamic environment, understanding the nuances of business strategy and adaptation is crucial.

With a career spanning diverse industries and a keen eye for emerging trends, RSM Partner Qiu Wenqi offers unique perspectives on navigating business valuation, technological advancements, and geopolitical shifts in the region.

Wenqi's expertise lies in the valuation of businesses and financial instruments, ranging from traditional financial modelling to the assessment of complex securities issued by early-stage companies to venture capital and private equity investors. Her extensive experience extends across various sectors, including technology, healthcare, logistics, manufacturing, agriculture, shipping, F&B, green energy, and property. With a clientele spread across the region, Wenqi brings a wealth of insights into the nuanced dynamics of business in Southeast Asia.

In this exclusive interview, Qiu Wenqi, as a judge in the 2024 SBR International Business Awards and National Business Awards, shares her insights on pressing issues facing businesses in Southeast Asia, from the challenges of assessing financial instruments to the transformative potential of emerging technologies. With a sharp focus on innovation, efficiency, and adaptability, her perspectives offer actionable strategies for businesses aiming to thrive in the ever-evolving regional landscape.

With your extensive experience in business valuation across various industries, what are the common challenges businesses face when assessing their financial instruments, and how can they effectively mitigate these challenges?

I have noted that the issuance of financial instruments, especially by early-stage companies, has become more prevalent. These instruments can indeed be complex, with various terms and conditions, so understanding them is crucial. 

Businesses often only realise the regulatory requirements associated with these instruments when auditors bring them to their attention. 

There are several valuation models available, such as discounted cash flows, option pricing models, binomial tree models, and Monte Carlo simulations. Selecting the appropriate valuation methodology and determining the fair value of such instruments can be challenging and typically require the expertise of independent valuation experts, incurring costs for businesses. 

Furthermore, the fair value of financial instruments is affected by several factors, including volatility, company valuation, and market trading multiples. Management’s input and estimation may also be needed. These data can be volatile, impacting the value of financial instruments and, consequently, the company’s financial performance. 

Therefore, it is essential for businesses issuing financial instruments to carefully consider these factors and ensure compliance with regulatory requirements. 

In your opinion, what are the emerging trends and technologies that businesses in Southeast Asia should prioritise to stay competitive in the global market? How can companies effectively integrate these trends into their operations to drive growth and innovation?

Technologies evolve rapidly nowadays. Failure to keep up with technological advancements can result in falling behind competitors, losing market shares, and missing out on growth opportunities. 

I have been hearing “The Internet of Things (loT),” “digitalisation,” “artificial intelligence (AI),” and “big data analytics” very often when people talk about technologies. Although there may be a lot of other technologies under development, I have seen these technologies play a significant role in helping businesses compete in the current digital world. 

Let me share with you one example. One of my clients successfully implemented a digitalisation platform for their employee share options plan, replacing traditional paper-based processes. This move streamlined the award process, reducing administrative burdens for the HR and finance teams. The digital platform also grants employees easy access to crucial information about their share options, fostering transparency and improving engagement. Furthermore, it allows employees to manage their awards conveniently from any location, enhancing overall communication and collaboration within the organisation.

In the above case, digitalisation significantly enhanced operational efficiency, streamlined processes, reduced manpower, saved time, and minimised errors to a considerable extent.

These technologies are not only helping businesses stay competitive but also driving innovation and creating new opportunities for growth. As businesses continue to adopt and integrate these technologies into their operations, we can expect to see further advancements in efficiency, customer experience, and overall competitiveness.

It is crucial for businesses to stay updated with market updates and emerging technologies to remain competitive and drive innovation. Investing in talent to ensure the workforce has the necessary skills and capabilities to leverage these technologies is also essential. As businesses continue to integrate these technologies into their operations, we can expect to see further improvements in efficiency, customer experience, and overall competitiveness. 

With your deep understanding of the Singaporean business ecosystem, how do you foresee the role of technology shaping the future of industries in the region?

The Singapore government has been placing a strong emphasis on innovation and technology in recent years. I foresee technology playing a pivotal role in shaping the future of industries in the region. Some of the key areas include:

Innovation: The development of technology provides businesses with innovative products and services, helping businesses enhance their competitive edge and create unique products and services. This innovation can increase brand and market value, helping businesses stay ahead in the market. 

Customer Positioning: Technology can help businesses position their products and services in the market, improve customer satisfaction, and build loyalty. Data analysis and AI technology can help businesses better understand their customers’ needs and preferences, leading to more targetted marketing strategies. 

Efficiency Improvement: Technology can help businesses improve the efficiency of information sharing and communication within enterprises. This in turn promotes team collaboration and knowledge management, leading to better decision-making and streamlined operations.

What strategies should businesses adopt to capitalise on these advancements in the business landscape?

Businesses should keep a close eye on market trends and identify emerging technologies and opportunities early to be able to seize competitive advantages. Allocate some resources to research and development to continuously innovate and develop new technologies that can give the business a competitive edge. 

It is important to implement digitalisation strategies across operations to improve efficiency, enhance customer experience, and drive growth. 

On the other hand, with the digitalisation of operations, businesses should also implement robust cybersecurity measures to avoid data breaches, financial losses, and reputational damage.

Can you share some insights into the impact of geopolitical and economic factors on businesses operating in Southeast Asia, and how organisations can adapt their strategies to navigate through uncertain times effectively?

The trade tensions between the Chinese and US economies have indeed benefitted Southeast Asia, as many manufacturing companies moved their production teams out of China to avoid tariffs and blacklists. This has resulted in more investments flowing into Southeast Asian countries, creating opportunities for local businesses.

Nonetheless, geopolitical instability, including domestic political unrest, protests, government crises, or democratic decline, can create uncertainties for businesses across regions.

Supply Disruptions: It can cause supply disruptions, impacting the production and distribution of goods and services.  

Currency Fluctuations:  Depreciation of currency may affect the company’s financial performance and the investor’s return. 

Economic Slowdowns: The demand for goods and services may be significantly affected by economic slowdowns or recessions.

Regulatory Changes: Change in policies can create uncertainties for businesses. Companies should be prepared to make timely adjustments to comply with new regulations.  

Overall, business operations and investors’ confidence would be impacted by geopolitical instability.
 
Businesses operating in these regions need to be aware of these risks and take proactive measures to mitigate them. This may include diversifying their markets and supply chains, having contingency plans, and monitoring geopolitical developments. 

As a judge at the SBR International Business Awards and National Business Awards, what specific criteria do you prioritise when evaluating businesses for these prestigious accolades?

My focus would be on determining whether the project introduced new innovations and successfully demonstrated innovative approaches in their products or services. This could include innovative use of technology, a unique marketing strategy, or creative solutions to better serve customers. I would also look for businesses that leverage technology and innovative processes to improve efficiency, productivity, and competitiveness. A commitment to continuous improvement and innovation would be important as well.