Singapore firms turn to bartering
By Mariko Oi
Asia Business Report, BBC World, Singapore
In northern Singapore, among many residential flats, there stands a huge six-storey building called Northlink.
It houses more than 500 small to medium sized businesses, or SMEs.
They are the backbone of Singapore's economy, and yet they are the hardest hit by the current recession.
Since the global credit crunch spread to the city state, banks became nervous to lend - especially to SMEs.
Alarmed by the situation, the government has announced that it will spend almost $4bn (?2.6bn) to stimulate bank lending in the budget.
But Singapore is experiencing its worst downturn in its history, with the economy forecast to shrink by much as 10% this year. And the freeze in credit markets is not yet thawing.
So businesses are turning to alternative methods to pay their bills, a tactic once considered a last resort, namely the age old practice of barter trade.
On the top floor of Northlink building, manager Malvin Khoo is busy finalising deals with his clients. He owns a Singapore based printing and packaging firm that employs 15 people.
"The greatest thing about bartering is I could be ordering a jumbo jet, or a yacht tomorrow," he quips.
Obviously, that is "quite unlikely", he laughs, though he has managed to use a property in Malaysia to barter with.
"It is the cheapest way to expand my business."
Mr Khoo joined Barterxchange, a network of 600 businesses in Malaysia and Singapore, 18 months ago.
Instead of simplistic one-to-one direct exchange of goods and services, members go online.
Forget cash. They have their own universal currency.
Companies earn credits by offering their services and skills. They can then use them to get what they need from other members.
"I had some customers that I did packaging for, who had surplus plates," explains Mr Khoo. "So I structured to trade $20,000 worth of plates to restaurants. Some of them were just opening up so they needed new plates."
In return, Mr Khoo scored free meals at various restaurants.
One of them is Megumi Japanese restaurant, which has sold dining vouchers worth more than $10,000.
"Not only did we get free webpage design and printing services by bartering, we also got some tremendous exposure to the business community," says managing director Hazel Hok.
"We used to be a local neighbourhood restaurant, but we have seen a significant increase in corporate functions."
And there is no geographical boundary.
Asia's biggest barter trade site is connected to more than a dozen global websites, where half a million companies participate.
"We have even sent electronic goods to Nigeria," says Lee Oi Kum, executive chairman of Barterxchange.
The industry is now worth over $8bn annually, according to the International Reciprocal Trade Association.
And its popularity is rising.
Barterxchange has seen a 30% jump in its membership since 2007.
Companies cannot operate solely by bartering. But it definitely offers alternative methods to make things a little easier.
Post Merge: May 18, 2009, 04:46:30 PM
Unusual ways to make money
By Shanaz Musafer
Business reporter, BBC News
"Barter for a beer," reads the advert on the classified site Craigslist. Click on the link and you will be guided to "the Landlady's Fancy" - a list of items that pub owner Dawn Kolpin would like to acquire. If you can provide one of them, you'll get a beer on the house.
Dawn is one of a growing number of people who are increasingly turning to the age-old art of bartering - the exchange of goods or services for other goods or services.
"With the economy the way it is at the moment, I thought that bartering could be a new way to bring people into the pub," she says.
With the UK now in recession, more and more people are looking for ways to earn extra money or to pay less for things that they need.
That has led to a growing "informal" economy.
Craigslist says it has seen a doubling in the number of adverts offering items to barter in the last year, Dawn's being one of them.
Dawn and her husband bought the Marksman pub in Shoreditch, east London, four years ago.
"We had a wish list for some things to do with the pub and thought bartering would be a good way of getting them done."
The idea started, she says, when they were looking for some CDs to replenish the jukebox.
"I initially put out an ad saying, 'Barter your old CDs for a pub meal,' and I got a couple of responses."
Now her wish list includes things as wide-ranging as vases and screwdrivers (in exchange for a beer) to a call for someone to tune "Joanna the Piano" (in exchange for a meal).
Of course, the increased volume of bartering seen on Craigslist and sites like it has led to some more unusual trading offers.
"My wife's loud parrot for your Vespa," says one advert. Perhaps not quite an equal exchange.
But people are turning to more varied ways of making money.
Motorists who want to earn while they drive can go to Stuff2Send.com.
The website lets ordinary car drivers register as "couriers". Whenever their journeys coincide with parcel deliveries, they can get in touch with the sender and arrange a fee.
Alan Kornbluth, a 20-year-old student from London, says it's a top way of making money.
"It's such an obvious thing. Personally I've done it before. I think it will definitely take off."
The beauty of it, he says, is that you hardly have to go out of your way.
"I put an offer in to carry something to Newcastle, where I was going anyway."
However, to join as a carrier, you do have to pay an annual fee of a minimum of ?11 before you can get going.
The service will also appeal to environmentalists, as it will help reduce emissions on the road.
The website launched in December and founder Colin Hay is confident it will grow, even in a recession.
"It's a recession-type business," he says. "It's essentially about thrift and common sense."
Websites such as Jobsgrapevine offer to link people who need odd jobs doing with people who can do them.
Categories include babysitting, cooking and dog walking, and you can even get paid to wait in for the gasman on behalf of someone else.
It seems there is a growing market out there for people with time on their hands to cash in on things that other people simply don't have the time for.
However, while people may be looking for alternative forms of income, there is one area that consumer groups urge people to treat with extreme caution - offers to work from home.
We've all seen the adverts in newspapers or posters stuck to lamp posts offering a large income for work, such as envelope-stuffing or craft assembly, that can be done from the comfort of your own home.
What they don't tell you, according to the Office of Fair Trading (OFT), is that you might have to pay up front for supplies or equipment to do the job. And once you have done, your promoters may refuse to pay you, claiming that your work is not up to their "standards".
The OFT has seen a recent rise in complaints about work-at-home scams and has issued a warning for people to be wary.
Citizens Advice also offers guidelines, which advise people to avoid advertisements or firms that ask for a payment before work starts.
But as people turn their attention more to the "informal" economy, there does seem to be a growing number of innovative ways to earn a bit of extra cash or save some of what's already in your pocket.
And according to Dawn Kolpin, there's an often-forgotten social side to these informal exchanges.
"With bartering, there's just a human element and an experience element that's not always possible with pure money exchange."