Starbucks may be a global franchise, but the difference between Starbucks in Singapore and in Malaysia is an interesting microcosm of the competitive nature of the two countries. In short, I get the sense increasingly that Singaporeans have no room for complacency. If the experience at Starbucks in Malaysia is anything to go by, we'd better pull our socks up.

Next time you're in Kuala Lumpur, go to Starbucks with your laptop and try to plug in your power cord. You'll be pleasantly surprised. Not only will your little green "power" light come on. The cafe even supplies an extension cord with a multiple adaptor to make it easier for several customers to plug in at once (if there is a café in Singapore that offers the same customer service, please let me know!)

I remarked about this phenomenon to a Malaysian friend, and offered a comparison with cafes in Singapore (not necessarily Starbucks). Here, the wall sockets are usually switched off to ensure customers who dare to plug in don't draw on the store's electricity. The staff flick the fuse on only long enough to to zip around the store with the vaccuum cleaner, before flicking it off again. Further, the staff often frown at you if you do find a wall plug that gives you power to your laptop. Or scold you outright for contributing to the electricity bill.

My Malaysian friend said: the folks in Singapore are smarter!

This brings me to the crux of the issue. Sure enough, the Singapore store owners may be smarter to save electricity. But this attitude is penny-wise, pound-foolish. The Malaysian store owners have realised that even though their electricity bills may be higher, customers will sit - and consume drink after drink - if they are able to keep their laptops powered on (laptops actually don't draw a lot of power compared to, say, the store's hotwater heater, cappuccino maker or toaster). They take a longer term view and, in my opinion, not just keep existing customers drinking more beverages, but keep them coming back.

So while Singaporeans may be smarter to keep costs down, the Malaysians are more business savy to take higher electricity costs into account in order to attract and retain customers.

I must confess: I am well and truly on the Singapore side of the argument when it comes to CIQ, railway land, access to treated water, sea boundaries and many of the other arguments the two countries have from time to time. But having traveled to Malaysia practically every month since October 2006 my view has changed somewhat. Previously I was impressed with the efficiency of the Singapore system. Having now dealt extensively with Malaysians I am finding they are hungrier, think out of the box more readily, and are quicker to make decisions. They are willing to make short-term concessions for long-term benefit.

For investors, the implications are potentially that:

1. Malaysian companies are more innovative, and could become more profitable as a result than Singaporean companies
2. Bursa Malaysia is becoming more innovative, and could become tougher competition for international capital

These points should not be news to anyone. The government has been telling us this for a long time. But it really gets you thinking when you experience it yourself.


Mark Laudi, who is among probably a small group of ang mohs who knows all the words to "Majulah Singapura".

To comment on this blog, go to the Investor Central blog.

Labels: Bursa Malaysia, Singapore Exchange, Starbucks