- Boosted by stay-at-home trends, Singaporean gaming and lifestyle company Razer posted record-high earnings in the first half of 2020.
- Razer’s fintech arm saw a 114.3% year-on-year increase in total payments volume (TPV) fueled by demand for digital payments due to the pandemic.
- Concerns over shrinking mask supplies led the firm to convert one of their supply lines to a mask production facility.
- This article is part of a series called Resilient Singapore, which focuses on Singapore’s resilient and sustainable growth in the post-pandemic world.
As businesses and economies around the world reeled from the impact of COVID-19, Razer, the gaming company — which has interests in gaming hardware, software, and services, as well as virtual gaming credits and fintech — saw slow behavioral shifts that worked out in their favor, said Razer’s Chief Strategy Officer Lee Limeng.
“The last six months [proved] very interesting. With people unable to leave their homes, we noticed interesting trends,” Lee, who has been with the company since 2018, shared from his home office in Singapore. “People were really furnishing their work-from-home setup. Then we started seeing a new wave of gamers who started playing games again because they couldn’t engage in any physical sports or outdoor entertainment. We also saw parents starting to play games because they wanted to spend time with their children.”
A series of isolation-inspired posters with the words “Stay Home and Game On”was also released to encourage the gaming community — old and new — to do their part in curbing the spread of the virus.
Well-known in the gaming and esports communities for producing high-performance gaming peripherals, such as mice, keyboards, and headsets, Razer’s hardware business contributed to a healthy 86% of its total first-half revenue.
“The global ‘stay-at-home’ situation has boosted user engagement with gaming and esports to record levels,” Razer Co-founder and Chief Executive Officer Min-Liang Tan said in an August statement.
The business has grown rapidly ever since its founding in 2005, but the pandemic has taken it to new levels — though not without some challenges.
Shifting and changing the supply chain
Globally, Razer has over 16 offices worldwide, including China, with dual headquarters in Singapore and California. “When the pandemic started [in China], everyone was wondering how it would unfold. Our supply chain did encounter some disruption,” Lee said.
First, Razer tackled its supply chain challenges, including finding ways to get their products out of China as the virus started to spread rapidly. Then, they looked at the immediate needs of their staff — the demand for surgical masks in particular, as worldwide mask supplies dwindled. They started looking for a solution for their staff in 16 offices, as well as business partners who also needed masks.
“We actually converted one of our [manufacturing] lines to start producing masks. [We faced] a lot of challenges like getting supplies of raw materials and supply of equipment, but we managed in the end,” Lee said.
Following that move, more than one million of those masks were donated globally. In a statement released less than one month later, Razer announced that its fully automated mask manufacturing line in Singapore — which was set up in a mere 24 days — expected to produce up to 5 million masks a month to meet the growing demand for masks in the city-state as well as in the larger Southeast Asia region. Production is presently ongoing, but Razer has not committed to any future plans for the facility.
Innovating digital payment solutions for Southeast Asia
Lee also leads Razer’s fintech arm, “Razer Fintech,” where pandemic-related digital consumption and spending in the first half of 2020 generated US$1.8 billion in total payments volume. The relatively new fintech arm operates one of the largest offline-to-online digital payment networks in Southeast Asia, with its suite of digital payment solutions aimed at addressing a large unbanked and underserved population in the region.
“We were fortunate in a certain way that we happened to be in the right space at this point in time,” Lee said. “Ecommerce activity picked up, and we also saw activity going to our payment channels as people began ordering groceries or goods online.” With both new merchants and consumers rushing to join the platform, total payments volume rose by 114.3% on the year.
Aware of the implications of COVID-19, Razer pledged an SG$50 million fund (approximately US$36.5 million) to support its business partners, encompassing cashflow relief measures, fee waivers, and investment opportunities.
“We told our partners why don’t we waive sign-on fees and annual fees,” Lee said. “And we’ve actually witnessed some businesses mitigate the impact of the pandemic because of their [digitalization efforts].”
Singaporean companies have a bright, digital future
What was his key takeaway from the pandemic? That digital innovation was vital to tiding this difficult time. Before COVID-19, it might not have been a priority, “But now we need to see how we can help everyone to prioritize. Now, everyone wants to go digital, and wants it done yesterday,” Lee said.
Having their roots in Singapore plays to their advantage because the country “has always been a little bit ahead of the game” in terms of digital advancements, Lee said. “For digital payments and other future technologies, we tend to use Singapore as a testbed because adoption here is a lot faster. If it takes off, then we push it out to other countries, obviously with some localization.”