Xiaomi, a well established brand in India that has recently dominated the Indian market overtaking the likes of Samsung, is ready to enter Sri Lanka officialy on the 29th of November. It was back in 2014, when Xiaomi entered into a deal with Flipkart, to debut in the world’s second biggest smartphone market.
Sri Lanka is a growing market for smartphones, and untapped by the likes of Xiaomi. Competitors like Oppo and Huawei have already set foot in the country, while Samsung enjoys a healthy position in the country. As per a study, Huawei is close to Samsung at number two in terms of market share in the country while Apple occupies third position.
Xiaomi India head, Manu Kumar Jain, tweeted about the foray, and declared the launch date as November 29 in the city of Colombo. However, Xiaomi’s product portfolio for Sri Lanka is yet to be known.
In India, the company is rapidly looking to expand to more categories like smart home products, accessories, gaming laptops, and a lot more besides smartphones. The brand was in the news just recently for setting a world record for the most number of retail stores opened in a single day.
After developing a stronghold in Asia’s two biggest markets, Xiaomi has also set foot on European soil with UK being the latest target. Xiaomi has managed to take new markets by storm with its high value-for-money smartphones, and flash sales strategies. It will be interesting to see how Sri Lanka takes to the new entrant in the coming weeks.
Asia’s technology industry has traditionally (almost stereotypically) become known for its outsourcing capabilities. More specifically, India has outstripped even China (Malaysia, Indonesia and the Philippines are also strong) in the provision of Business Process Outsourcing (BPO) i.e. the provision of back office business systems functions such as finance, data crunching etc. as well as the more front office functions such as customer contact center services.
Although these industries will continue to support significant contributions to the GDP of their home nations, there is also a realization that ‘building and creating’ can be better than just ‘doing’ for long term knowledge-based economic development. Without jumping continents too far, initiatives in the Middle East now exist to try and create 1-million Arab coders. This kind of realignment is happening around the developing world.
If not quite ready to be movers and shakers, the Asian IT industry at least wants to be makers.
Tea… and IT
Formerly Ceylon before independence in 1948, the south Asian island nation of Sri Lanka is rather better known for its tea, temples and tourism before its IT. One center of hard-core software programming and creation that has been established is the new developer center serving Swedish-born enterprise applications company IFS (Industrial & Financial Systems). IFS is known for its Field Service Management (FSM) software, which is used to optimize the schedule of remote workers and resources -- the company is also know for its Enterprise Resource Planning (ERP) solutions for asset-intensive industries.
The IFS facility in the Sri Lanka capital Colombo currently employs somewhere just over 1,100 staff, with a 60 to 40 split between males and females respectively. The country came out of its 25-year civil war in 2009 and the capital now resembles parts of China in terms of its massive new construction surge (indeed, China itself has invested heavily in this new boom). But, interestingly, the IFS operation was established some 21 years ago this year, so the company either had faith, visionary clairvoyance… or both.
What makes the IFS facility (arguably) interesting is the fact that it houses developers, programmers and all the normal flavors or software engineering professional that we would expect to find in the west or any other more developed economy. As what might be argued to be a sort of validation of their skills, some of the IFS Sri Lankan team have now been posted overseas in Europe and North American in cases where the employee has become ‘the domain expert’ in their particular field. So how did this maker (not just do-er) operation come about in the first place?
“We were looking for a new development center back in 1997, one that was high value, obviously… but also one that that gave us access to really sharp talent coming out of good universities,” said IFS senior vice president of research and development, Thomas Säld. “I would also say that Sri Lanka has a special work mentality. People are very dedicated; and this was important to us because we needed a low attrition rate. Global ERP software systems programming is pretty complex, so once you train people up you need to be able to go forward in the knowledge that they will stay with the company for the longer term.”
Säld points out that although, yes, there is a big customer support contact center located in Sri Lanka at one of the firm’s four sites… around half (500) of the employees are programmers actually working to develop software on the core IFS platform.
“It is only when you start to co-locate development in more than one global site that you really know whether or not your programming processes are efficient or not. We could have put all our development in once place and theoretically created one very large site -- but making sure we exist in more than one place on the planet ensures that you can operate with connected methodologies. What is more, it also ensures that we have more diversity in our talent pool. It helps us think about how people use our products in other parts of the world. So Sri Lanka was deliberate and we knew that we needed to be somewhere else other than where the company was initially founded, in Sweden,” said Säld.
Configuration, not customization
Across the IT industry today, there is a big push for modular solutions that come packaged in composable chunks of connected cloud, often woven together through so-called Application Programming Interfaces (APIs). Software vendors want customers to use as many of their platform’s connected functionalities as possible and avoid in-house customization where possible. This is because custom-crafting add-ons and extensions builds up a silo mentality… and IT silos are difficult to move, migrate, upgrade and so on. As such, a large contingent of the Sri Lanka IFS software engineering team are trained to help firms understand the breadth of the software platform itself and look for different ways of working with it.
It’s what we call configuration rather that customization -- and it takes a developer brain to be able to know the difference.
“IFS started 21 years ago with just 28 staff and [as already noted here] we now employ around 1,100,” said Ranil Rajapakse, SVP and COO head of world operations for IFS Sri Lanka. “Looking at the establishment and growth of this now considerably extended team, it has always been important for us to be part of the global IFS technology proposition. It was very important that we were never thought of as ‘offshore’, we are part of the whole company and we’re just on a different shoreline. That term offshore seems to plant something in people in peoples’ minds and that’s not the way global IT companies need to develop these days. We run operations on the concept of what I like to call global-local duality and, ultimately, I think we will help reverse the diaspora and help to attract domestically born tech talent that has emigrated back to Sri Lanka.”
The company claims to be pretty serious about skills investment at the university level. IFS runs software application development courses at a number of local universities and technical institutes including the Sri Lanka Institute of Information Technology (SLIIT). This effort encompasses and includes lectures, seminars, computer labs training, full coursework programme curriculum development and exams. IFS supplies these services free of charge. The company also offers around 80 scholarships for those that cannot afford to attend university in Colombo.
“The way our team in Sri Lanka is now integrated with our other development, consulting and support operations within IFS globally is of meaningful value to our customers. Regardless of where a customer is located around the world, we are able to consistently offer them the best service from the most aptly skilled experts. The differentiator in our approach compared to peers is that customers are at the center of investment decisions like this,” said IFS chief executive officer Darren Roos.
Sri Lankan economic outlook
If we think back to the information technology pre-Windows 95, we were using Microsoft Windows 3.1 and the web was only just started to bubble upwards into our collective conscience. People went to work in the office and ordered sandwiches at lunchtime. A business (or indeed leisure) trip to China, the Middle East, Africa or India seemed like a lifetime voyage and Asia (as a whole) was still known for producing the cheaper end of the mass manufacturing goods market.
A quarter century later and we’re all about the web connected cloud in an age when open source is now the cherished darling of every enterprise software vendor. Lots of us work from home (or freelance) in the new age ‘gig economy’ and we’ve all swapped sandwiches for low carb quinoa and kale smoothies. The new Asia is one with developers actually developing (look at the number of Indian engineers that have gone on to become C-suite execs in Silicon Valley) and Sri Lanka wants to be a part of that boom.
What develops next could come down to the quality of Sri Lanka’s graduate market (the country has a 92% literacy rate compared to 74% in India) and its relative size. The tea, temples, tourists and tuk tuk auto-rickshaws will always be there, but technology could be the next reason you know where Sri Lanka is.
Neil Umagiliya has been appointed as the Chairman of Bank of Ceylon and assumed duties as the chairman on Monday (19). Umagiliya is presently a Director of Dial Textile Industries (Pvt) Limited, Vijaya Kumaratunge Memorial Hospital and is also a Member of the Sri Lanka German Business Council.
A Fellow Member of the Institute of Chartered Management Accountants, United Kingdom and a Member of the British Institute of Management, Umagliliya has previously held directorships at the Sri Lanka Export Development Board and the Information and Communication Technology Agency (ICTA).
He has also served as a Member of the Monetary Board of the Central Bank.
Softlogic Glomark, the first flagship global supper market was opened in Nugegoda for the benefit of retail customers. Sri Lanka’s modern grocery retail sector has seen a robust growth with improving incomes, rising urbanization and changing lifestyles which has attracted more customers from traditional grocer channels.
It was launched by Softlogic Supermarkets (Pvt) Ltd, a subsidiary of Softlogic Retail PLC under the parent group - Softlogic Holding PLC.
As a consumer business, it has over 100 international brands marketed through country’s distribution channels.
Softlogic Glomark is expected to revolutionize the modern retail trade in Sri Lanka with its unique global experience.
It will provide the widest selection of items and the best technology for consumer experience and will introduce a series of firsts in the country.
The 8th Annual Property Guru Asia - Property Awards Grand Final concluded on 9th of November, in an exclusive gala dinner and ceremony held at the Athenee Hotel in Thailand.
Four Sri Lankan companies were shortlisted for the following awards. Accordingly, Prime Group was selected for the the Best Developer (Asia) category and Capital TRUST Residencies (Pvt.) Ltd. for the Best Boutique Developer (Asia) category.
Altair by Indocean Developers (Pvt) Ltd was selected for the Best Condo Development (Asia) category as well as for the Best Condo Architectural Design (Asia) category.
Meanwhile, Mandarina Colombo by Macksons Properties –– Sri Lanka was selected under the Best Hotel Development (Asia) category.
Fifteen markets from Sri Lanka to China competed at the largest Grand Final event of the Asia Property Awards to date attended by more than 500 guests, with developers from Japan and Australia making their debut at the ceremony.
Isobar, the digital agency from Dentsu Aegis Network, has expanded its operations to Sri Lanka.
Last year, Dentsu Grant Group, a Sri Lankan communications agency, disrupted the nation’s advertising industry with the introduction of the global marketing conglomerate Dentsu Aegis Network into the country. Now, it will do so once again, reinventing Sri Lanka’s rapidly growing digital economy, with the launch of its full-service digital agency – Isobar.
Commenting on the prospects of Isobar in Sri Lanka, Shamsuddin Jasani, Group Managing Director - Isobar South Asia said, “I am very excited to launch Isobar in this amazing country. Sri Lanka is a rising mobile economy with smartphone penetration growing by over 20% and mobile penetration growing over 120% year-on-year. With the launch of Isobar Sri Lanka we are looking at creating a leading agency for the digital age that follows a true full service model. Under the guidance of Neela and her team, I am sure we will be a force to reckon with in this market in the years to come.”
Speaking on the launch of Isobar Sri Lanka, Neela Marikkar, Chairperson - Dentsu Grant Group and Dentsu Aegis Network Sri Lanka states, “We are thrilled to be introducing such an iconic brand into the Sri Lankan advertising industry. We are fortunate to be working so closely with our global and regional offices; we are confident that we will be able to use their global knowledge and skills to help develop business opportunities for our clients as well as help the digital economy of the country and accelerate through Isobar’s experience led transformation and brand commerce expertise.”
eady to revolutionize the market, Isobar Sri Lanka will offer end to end full service digital media creative and technology services and help clients navigate the world of tangible and intangible businesses through mobile brand commerce, product innovations, artificial intelligence (AI), virtual reality (VR), the internet of things (IOT) and wearables.
While China is the one of Sri Lanka’s largest trade partners, it also ranks high among the tourist originating countries that visit the South Asian island country each year. This has ensured wide acceptance of Chinese cards at merchants and ATMs across Sri Lankan cities.
UnionPay has now decided to roll out its mobile payments service in Sri Lanka to benefit from the fast growing industry.
UnionPay International, which is UnionPay’s global subsidiary, will collaborate with Cargills Group to launch UnionPay QR code payment service. The roll out will begin in the first half of next year.
Cargills ecosystem includes supermarkets, restaurants and cinemas. UnionPay will power Cargills’ e-wallet with the QR code function through digital issuance of cards. Apart from this, the Chinese lender has also developed NFC mobile payment and in-app payment.
“This cooperation is significant as UPI is rolling out its mobile payment products through cross-border cooperation with large retail groups,” said Cai Jainbo, chief executive officer, UnionPay International.
The mobile payments industry in Sri Lanka is growing rapidly. While the country saw an annual rise of 17.1% in the volume of mobile payment transactions, their value jumped nearly four-fold to Rs 21.3 billion (LKR) in April-June quarter this year, according to central bank data. However, only 2.5% of these transactions were directed towards retail payments. There are 14 licensed mobile payment operators in Sri Lanka.
Early this year, UnionPay international had identified Sri Lanka as one of the “new favorites” of Chinese tourists. This was reflected in the increased card transaction volumes at catering, accommodation, entertainment, tourist spots and travel booking merchants.
UnionPay’s QR code payment is currently accepted at around 60,000 merchants in 23 countries and regions outside the Chinese mainland. It plans to enhance its service capability outside the region by supporting payment upgrades in overseas markets.
The 4th edition of Intex South Asia, the largest international textile sourcing show in South Asia, was inaugurated today at BMICH by H.E. Mr. Taranjit Singh Sandhu, High Commissioner of India to Sri Lanka. Ms. Indira Malwatte, Chairperson, Sri Lanka Export Development Board, Mr. Sharad Amalean, Chairman, Joint Apparel Association Forum of Sri Lanka (JAAF), heads of several trade bodies, industry leaders and delegates from several countries were also present. The event has been organized by Worldex India Exhibition and Promotion Pvt. Ltd. The event partners include the Cotton Textiles Export Promotion Council (TEXPROCIL), Retailers Association of India, Clothing Manufacturers Association of India, Confederation of Indian Textile Industry (CITI) etc.
High Commissioner H.E. Mr. Taranjit Singh Sandhu and Chairperson, Export Development Board of Sri Lanka Mrs. Indira Malwatte also jointly inaugurated the India Pavilion organized by Federation of Indian Export Organistion (FIEO).
High Commissioner noted that Intex South Asia has become an annual event in Sri Lanka in the calendar of textile industry, which is a reflection of efforts of all stakeholders to turn a huge potential into reality. He also recalled Prime Minister of India H.E. Mr. Narendra Modi’s vision for textiles: “From Farm to Fibre, Fibre to Factory, Factory to Fashion, Fashion to Foreign.”
Underlining that India is the largest cotton and jute producer in the world and second largest textiles producer, as well as the second largest producer of silk in the world, High Commissioner added that there exists significant complementarity wherein Sri Lanka can source textile material from India and transform it into apparel and garments for rest of the world. He encouraged Sri Lankan companies to be part of the supply and value chains of large Indian companies. He praised the contribution of Sri Lankan companies, who have made substantial investments in India in textile sector. He noted that events such as Intex South Asia, would go a long way in promoting the existing synergy between India and Sri Lanka.
High Commissioner touched upon Khadi, a hand spun fabric, which Mahatma Gandhi had popularized, as a symbol of freedom and self-respect. India is currently paying tribute to Gandhiji as part of his 150th birth anniversary celebrations.
High Commissioner underscored that India’s rapid growth can bring dividends for the entire region, especially Sri Lanka. He added that there is a lot India and Sri Lanka can do together rather than at individual levels. He called upon the business community and industry leaders to innovate and grow together.
The 4th edition of Intex South Asia has participation of over 200 suppliers from around 15 countries showcasing a wide variety of innovative textiles products such as yarns, apparels, denim clothing, accessories etc. Alongside the exhibition, there are also Interactive Business Forums, Fashion Fiesta, Networking Reception, Fashion Show, B2B meetings, etc. The event concludes on 16 November 2018.
If there is one thing that business leaders and entrepreneurs detest is insecurity in the macro environment.
Businesses run according to forecasts and situations about the future. However, as much as businesses take into account uncertainty, the one thing all want to avoid at all costs is the volatility in the macro environment stemming from political stalemate, extremism, and political dysfunction.
Firms in IT and garments are starting to shift their head offices out of Colombo to Singapore owing to the political crisis, regressive taxations and the general environment for business that Sri Lanka now presents.
A CEO of a large software firm told the Business Times that by month end he will be shifting the headquarters to Singapore. “We find it easier to do business in Singapore. Especially after the new tax system we were debating it as we find it very difficult when consolidating our accounts for certain expenses, etc and with the latest turn of events, we have decided to leave Colombo.”
The country’s political risk has been fractured by the stand-off between former Prime Minister Ranil Wickremesinghe and President Maithripala Sirisena.
A garment factory owner also had the same story to say as the CEO of the software firm. He said that with the new political situation they will be impacted with GSP + being shaky and their decision to shift came early this month. They have decided to shift to Singapore.
Political instability hurts most firms, he added noting this is mostly because employees are often forced to skip work due to strikes and other protests and this impacts on the businesses negatively. In addition, businesses like a region that is friendly and welcoming towards them and not an intimidating and surly dispensation, some others who are debating on whether to shift from Colombo or not said. “The point here is that political insecurity hurts everything from profits to operations to the working conditions of the employees. Because of this businesses avoid it,” an analyst added.
Aswin De Silva has resigned from the post of Chairman of the state-owned National Savings Bank (NSB) on Monday, Mr. de Silva confirmed.
De Silva is a senior banker with more than 20 years of experience at American Express- Asia. He is FCA, FCMA and FCPA (Australia)-qualified. During the past year, NSB saw record profitability at LKR 14 billion.
NSB asset base was recorded at LKR 1 trillion, a growth 28 per cent in the last three years. NSB also saw the lowest non performing loans in the industry at 1.4 per cent last year. Under Aswin De Silva's stewardship, NSB recently raised a USD 100 million loan facility supported by Commerzbank AG.
The excellent relationship that NSB enjoys with its banking partners has allowed NSB access to a competitive interest rate despite the current global trend of interest rate increases.
The facility was arranged jointly by Dubai based Alpen Capital (ME) Limited and NDB Investment Bank of Sri Lanka. The funds were required as part repayment of USD 750 million which NSB borrowed from international markets in 2013 through an international bond issuance.
The Central Bank said on Friday that Sri Lanka Prosperity Index (SLPI) increased to 0.771 in 2017 from 0.661 recorded in 2016, mainly due to improvements in ‘Economy and Business Climate’ and ‘Socio-Economic Infrastructure’ sub-indices.
Economy and Business Climate sub-index has improved during 2017, due to increase in per capita Gross Domestic Product (GDP) and enhancements of the aspects associated with employment, CBSL said.
With regard to the sub-index of Socio-Economic Infrastructure, improvements to the road network with the extensions to the expressways, construction of bridges and flyover projects, availability of electricity facilities and improvements in pipe borne water quality were the key drivers.
Even though ‘Well-being of the People’ sub-index has declined during 2017 mainly due to the reduced levels of purity of environment and air quality, improvements were recorded in the aspects of availability of healthcare facilities, availability and quality of education, wealth of people and their engagement in entertainment activities, CBSL added.
Sri Lanka tea exporters to China are increasing and the country has been able to take 10% share of the Chinese tea market, Assistant Director, Sri Lanka Tea Board, Dhanushka Karunaratne said. He said that there is specially a growing demand from young Chinese towards Sri Lanka tea.
Karunaratne was speaking at the Sino – Sri Lanka Economic and Trade Forum where over 30 Chinese investors from Beijing participated.
Karunaratne said that in 2015, Sri Lanka was not even among the top ten exporters of tea to China and two years later Sri Lanka was able to move to top eighth position. In 2014 Sri Lankan supplied 6,105 million KG to China and in 2016 this was increase to 8,525 million KG while India was in the second position supplying 5,485 MKG of tea in 2016. Other three major exporters of tea to china are Indonesia, Vietnam and Taiwan.
Meanwhile Additional Secretary, Ministry of Megapolis and Western Development, Madhawa Waidyaratna said that the Urban Development Authority (UDA) is still striving to make Colombo the most livable city in the region which in turn would encourage more investments to Sri Lanka. He also said that The Colombo Port City Development project too would be a game changer to woo FDI to Sri Lanka and Chinese entrepreneurs should look at these developments close and try to invest.He also said that the Ministry of Megapolis and Western Development would look at more infrastructure development projects in the future. “The light railway would be such a high priority project.”
He also outlined the economic and industrial zones that are being planned and executed by the UDA focusing on several regions of Sri Lanka. The event was coordinated by Peacock Safari and Holidays China.
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