Launched in 2019, Clearly Basics is a medical grade skincare line combining pharmaceutical ingredients with botanicals, bringing the best from both worlds to its customers. Recognising the reality of Singapore as a small market, the company knew it needed to go outside the country in order to scale. Today, it serves consumers in 33 countries from its offices in Singapore, making them one of the many Singaporean micro-small-and-medium enterprises (MSMEs) to expand abroad.
SMEhorizon speaks with Ron Kwok, CEO of Clearly Basics on his company’s journey and how working with Wise Business has helped them expand their operations and develop their business. Lim Paik Wan, APAC Expansion Lead at Wise also shares her insights on the global aspirations of local MSMEs like Clearly Basics, and how technology can help them realise these goals.
From telemedicine to cosmetics
Recounting his company’s journey, Kwok shares that his company started out in 2017 with a mission to provide a convenient and effective means to access a dermatologist. “Exclusively through Facebook Messenger chat, customers could send photos of their skin and receive customised medication from a dermatologist.”
“We were well ahead of any competitors when we first started as Singapore had just opened up telemedicine,” he shares.
However, expanding beyond Singapore as a telemedicine outfit had its limitations. “We quickly realised every country has its own regulations on telemedicine and it would be tedious going through the process with each new market. So we decided to take the best of our prescription formulations and turn them into a cosmetic line.”
This is a move that has paid off: today Clearly Basics, launched in 2019 as a medical grade skincare line serves customers in 33 countries, directly to consumers or through Amazon.
Such ambitions are not uncommon in the Singapore MSME community. Lim observes that “MSMEs in Singapore are really ambitious. According to a global survey Wise conducted with YouGov in December 2021, Singapore is home to the highest proportion of MSMEs (70%) operating abroad, a term that we classify as ‘micro-nationals’.
“We’ve also seen Singapore MSMEs accelerate their digital transformation enormously over the past few years. The Singapore government has rolled out a number of digital programmes, such as the SMEs Go Digital Programme, and reportedly already more than 78,000 small businesses have come onboard, with more than half coming onboard in 2020 alone.”
Challenges expanding overseas
While pivoting into cosmetics line helped Clearly Basics go beyond Singapore’s shores, it did not clear all the challenges of breaking into a new market. Lim shares that despite the advances made through Singapore’s push for digitalisation, Singapore also has the highest percentage (80%) of MSMBs who have been discouraged or prevented from expanding internationally.
“Based on MSME feedback, one of the top challenges that consistently stood out was the challenges of international payments. For the large majority of Singapore MSMBs who have been discouraged from expanding internationally, payments emerged as a top challenge for these businesses 一 63% cite the cost and complexity of managing international payments as a major deterrent to either venturing or further expanding overseas, followed by lack of capital or resources (44%), import tariffs (36%), and culture or language considerations (32%). “
This was an experience shared by Clearly Basics. Kwok says that because the majority of their sales are to customers in Europe and the United states, they faced a lot of issues with making international payments with banks. “. Having to go to the physical branch and wait in line — it was a real hassle. We also lost money having to convert incoming money into SGD, only to send it back out to EUR or USD on business spend.
“Between our entities, we were transferring upwards of USD 250,000 every month. The transaction fees were adding up quickly.”
Technology building bridges across borders
Fortunately, says Lim, there’s active innovation today focusing on small businesses’ pain points around digitalising and overseas expansion, from managing complex cross-border payments, billing, hiring, to customer acquisition. “Take payments as an example: even though sending an email around the world takes seconds and is virtually free, moving money across borders remains incredibly slow, difficult and expensive for the most part.
“This problem affects everyone who has ever needed to manage multiple currencies, but these inefficiencies are often hardest on those who can least afford it — entrepreneurs, freelancers and resource-lean smaller players who don’t have the option to wait for or negotiate better rates.
Clearly Basics has leveraged some of Wise Businesses’ offerings in order to address these pain points. “their Business Account offering allowed us to hold currency in foreign accounts,” says Kwok.
“This allowed me to collect money in USD and then pay in USD without repatriating the money back into SGD. The money we’ve saved so far has been reinvested back into the business, whether it’s for R&D or for day-to-day operations. As all entrepreneurs know, whatever helps maintain positive cash flow is an asset.”
Keeping operations clear
Clearly Basics is one of the fortunate companies whose product and operations proved resilient against the pandemic. “Skincare is selfcare,” says Kwok, “and as people stayed at home, they focused more on taking care of themselves. Also as a direct-to-consumer brand, we did not have to worry about retail outlets or footfall.”
Kwok shares that his experience with Clearly Basics highlights the need for Singapore SMEs to build with scale in mind. “While I am thankful for our experiences running the teledermatology service,” he says, “we had to pivot the company in order to successfully expand outside of Singapore.”
Meanwhile, for those MSMEs who are ready to bring their successful model abroad, Lim reminds MSME leaders to remember that the technology exists to help them where it matters, and encourages them to explore alternative digital options especially when it comes to payments. “Too often, international banking involves high, hidden fees, slow services and unnecessarily complicated processes.
“It doesn’t have to be this way; local businesses deserve services that help them thrive abroad, instead of stifling their global ambitions. According to our survey, digital services have the potential to help businesses better operate abroad — 15% of MSMBs in our survey who operate abroad that use digital providers for international payments accelerated their expansion plans during COVID-19, compared to 6% of those that do not use digital payments.”