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Achieving a delicate balance
STEERING a business through a pandemic is hard enough. Doing so while playing a social role at the national level is even harder. Yet balancing between corporate and social obligations is something that Seah Kian Peng, 58, has long had to do, as group chief executive officer of FairPrice Group and NTUC Enterprise. Running the labour movement's co-operatives means being responsible not just to shareholders, but the wider community, says Mr Seah. (see amendment note)
In a year when the pandemic saw supermarkets flooded with shoppers, he was named Outstanding CEO of the Year for guiding NTUC FairPrice to play its crucial role in Singapore's Covid-19 response.
A HEAD FOR BUSINESS
Though Mr Seah has spent the last two decades in NTUC FairPrice, his career has taken him across a whole spectrum of organisations. He started out serving his scholarship bond with government-linked firm Indeco Engineers, before being posted to the Administrative Service, heading the Ministry of Defence's budget department.
His next posting was to the National Trades Union Congress (NTUC), where he did corporate planning and started NTUC Healthcare's chain of pharmacies. When his bond was up, he headed for the private sector.
"That was something that I always wanted to do," he recalls. "The days when I was in the public service, I enjoyed it. But I knew that I am better at operations, business, versus policymaking, that kind of thing, so I've always wanted that experience."
He spent three years with piling and engineering firm Sum Cheong Corporation - until the NTUC called him back. So in 1996, he returned to head NTUC Healthcare, then NTUC Media. In 2001, he became chief operating officer of NTUC FairPrice, and then chief executive officer in 2010.
In 2019, he was concurrently appointed group CEO of NTUC Enterprise Co-operative, the holding entity of the labour movement's social enterprises, including NTUC FairPrice.
In 2006, Mr Seah entered politics, becoming a Member of Parliament (MP). His interest in business explains why, compared to his labour MP colleagues who are more involved in labour relations and advocacy, his work is focused on social enterprises: "I'm the only one on that side. . . I think that is also a recognition of my own strengths and weaknesses."
When he joined NTUC FairPrice, it was a supermarket retailer that only crossed the S$1 billion annual turnover mark that year. Now, it is part of the larger FairPrice Group, with multiple retail formats - from FairPrice Xtra hypermarkets to convenience store chain Cheers - and over 570 consumer touchpoints, including hawker centres, food courts, coffeeshops, and pharmacies. The group is set to cross the S$4 billion revenue mark this year.
In the future, NTUC FairPrice aims to be an "omni-channel" retailer, with a seamless experience across physical and online shopping. Its evolution, including the introduction of new formats, has been in response to changing demographics and lifestyles, says Mr Seah. Savvier, well-travelled shoppers, for instance, may have a demand for plant-based meats or organic produce.
This is part of the balancing act that NTUC's social enterprises have to perform, between corporate and co-operative concerns. "We still need to survive," he says. "The part about being sustainable, being commercially viable, is very important. So that is no different from running any private sector, public-listed company. But I think the other dimension which is equally important is the social objective."
In a way, these objectives do align. The FairPrice group employs 13,000 staff, he notes: "I have to make sure we earn to provide jobs for 13,000 people. So viability is important."
In short, the group provides "a unique opportunity to do good while managing and running the business efficiently".
As CEO, Mr Seah deals with familiar business issues such as the bottom line, productivity, resource optimisation, market relevance, partnerships, identifying opportunities and mitigating risks.
Yet he does this while bearing in mind the group's central objective - "It has always been FairPrice's social mission to moderate the cost of living" - even if it means taking certain decisions which might be untenable from a strictly business angle. "Our role kind of gets enhanced - the social role, the community role - whenever there are crises that hit us," says Mr Seah. This includes previous pandemics such as Sars and bird flu; economic crises; and even the haze, when NTUC FairPrice was the first supermarket to sell masks. Even for non-crisis situations, such as the introduction of the goods and services tax (GST), NTUC FairPrice rose to the occasion by initially absorbing the tax.
Covid-19, of course, has been unprecedented in many ways: "the scale, the intensity, and the impact". NTUC FairPrice's centrality in Singapore's response is perhaps captured by a happy little detail: in this year's Campaign Asia-Pacific awards for Singapore's top local brands, it took top position for the first time.
Yet the role has not been easy to play. The first trial was when the Covid-19 Dorscon level was raised to orange in February, sparking panic buying across the island and online.
Mr Seah's leadership in this moment was one of the reasons that he was named Outstanding CEO of the Year. He repeatedly assured the public that there were sufficient supplies, and called for calm - including via quick Facebook updates, when there was "no time for the corpcomms team to tell me what to do", he recalls.
He also started various initiatives during the pandemic. These include a FairPrice Foundation campaign to donate up to S$500,000 to five organisations - with plans to raise this to S$1 million for seven organisations - to match the service fee for online orders; and a S$50 million support package by NTUC Enterprise, comprising new deals for union members and the extension of various discounts.
One new scheme close to Mr Seah's heart is FairPrice on Wheels, launched in April. "When the 'circuit-breaker' was announced, we saw that there were some mature estates with a higher percentage of low-income seniors that did not have a supermarket near where they lived," he says. FairPrice on Wheels brings essential groceries to such neighbourhoods, evoking the provision vans of the 1960s.
At the same time, the pandemic has prompted business upgrades to NTUC FairPrice's infrastructure and resilience. The group invested heavily to upgrade its online grocery infrastructure. It increased online capacity by 30 per cent by converting a brick-and-mortar store into a fulfilment centre, and has put in place more redundancy to cope with surges in demand. It also continues to diversify its sources, with products coming from over 100 countries. Eggs, in particular, are now sourced from much further afield, notes Mr Seah: "Never would I have imagined that we would import eggs from Poland or Ukraine."
NTUC FairPrice's role as a market leader is central to both its corporate and social responsibilities. Apart from staying ahead, it also plays a "benchmarking role" that should not be underestimated, says Mr Seah.
Many years ago, for instance, NTUC FairPrice was the first to introduce senior citizen discounts, which are now commonplace: "And when the rest have it, it benefits everyone." During this pandemic, it was the first to introduce a priority shopping hour for seniors and vulnerable groups, which "speaks to the need of the day". It was also the first to introduce purchase restrictions - something which a purely profit-seeking retailer might hesitate to do.
Mr Seah has had to make many such decisions even before Covid-19. In March 2019, for instance, NTUC FairPrice announced a price freeze for 100 essential items. This was meant to last till the end of June 2020, but has since been extended till year-end.
Though preceding the pandemic, this price freeze - and the assurance it provides - came at an ideal time, says Mr Seah. But as he notes: "If we took on a purely commercial lens, it's unlikely that we'd do this."
NTUC FairPrice's social significance can be seen in smaller things, too: from couples requesting to take wedding photos in supermarket aisles, to grocery shopping as a multi-generational family outing. "All these little things show that we are very much plugged in, and we are, you could say, part of the social fabric," he says.
In being part of everyday lives, the retail arm is similar to the rest of the NTUC Enterprise group, of which Mr Seah has been group CEO for just over a year. From insurance to preschools to real estate, NTUC Enterprise employs some 22,000 staff, and serves some 2 to 3 million people in some way each day, says Mr Seah: "The social impact that's created as a whole is actually quite huge."
Yet that is also why he finds the role of group CEO "quite challenging", he adds. Each enterprise has its own industry-specific challenges, and its own considerations in balancing the commercial side and its social impact. Having to switch tracks between very different industries in the course of his work is not easy, either.
Then there is the greater significance of his role. "At times I also feel quite weighed down," he confesses. "It's more than a job. Your stakeholders are quite diverse - all important. Shareholders, staff, customers and the broader community."
"You get it right, the impact is great. You get it wrong. . ." Mr Seah trails off, but the weight of the implications is clear.
It goes back, as always, to the central mission. This year in particular, he adds, "the things we do are things in which we don't put commercial considerations at the top of our mind". FairPrice on Wheels is a clear example: "For sure, if it was about commercial considerations - for this, we actually lose money. But we are doing it as a service. I think it goes to illustrate what NTUC FairPrice is about."
Recalling the gratitude and happiness with which residents greeted the appearance of the FairPrice on Wheels vans, he says: "You cannot measure that. The difference that it makes to this person's family."
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Amendment note: An earlier version of the story referred to Mr Seah as chief executive officer of NTUC FairPrice and NTUC Enterprise. He is group CEO of FairPrice Group and NTUC Enterprise.