“Macau is a relatively small and highly competitive market,” says San Choi, deputy director of the Macau Youth Business Incubation Center, operated by Parafuturo Macau, a publicly-held company. To counteract this context, she argues that local startups should look to markets “beyond Macau”
How has Parafuturo Macau evolved since its foundation?
San Choi – Parafuturo de Macau was established in 2015 to support cooperation between Guangdong Province and the Government of the Macau Special Administrative Region. Its aim is to help young people in Guangdong and Macao to start and develop their businesses and strengthen cooperation between Guangdong enterprises and Macao small and medium-sized enterprises.
In December 2017, the Directorate of Economic Services (now the Directorate of Economic and Technological Development Services) contracted Parafuturo (PFM) to operate the Business Incubation Center for Macao Youth (MYEIC).
Since then, under the management of PFM, MYEIC has offered young entrepreneurs not only free use of office spaces 24/7 with a range of amenities, but also a range of free entrepreneurship support services. In 2018, MYEIC received the honor of being the first National Coworking Space outside the borders of mainland China.
In subsequent years, MYEIC has also received industry awards, including China’s Top 100 Outstanding Spaces, GBA’s Top 30 Incubators, and Incubation Base for Overseas Chinese Students, just to name a few.
How many startups or companies are currently headquartered in MYEIC? What are the focus areas?
S.C. – Since December 2017, MYEIC has had over 500 entries from rising entrepreneurs and startups. Currently, there are more than 90 incubators, mainly in the technology and innovation sector, representing 43 percent of the total. There are projects in the business and commercial services sectors (22 percent), cultural and creative industries (18 percent), traditional Chinese medicine, health industry and tourism, among others (17 percent).
What activities and initiatives does it organize to help these companies?
S.C. – MYEIC has been organizing branded activities, including the Macao Youth Innovation and Entrepreneurship Competition – the largest of its kind in the city – for six consecutive years, attracting entries from over 700 high-tech entrepreneurial projects.
It has provided accelerated opportunities for qualified projects in ten national and international entrepreneurship competitions, having won more than 4.1 million patacas in prizes over the years.
Another notable event, the “MYEIC ProQ Alliance”, which encompasses presentations and business correspondence, has been organized 14 times for four consecutive years, resulting in more than 10 million patacas in transactions for young entrepreneurs and startups.
Furthermore, in order to build a platform for investment matching and help young entrepreneurs connect with investors, MYEIC has been co-organizing “Investor Matchups for Startups” with Macau Investment and Innovation Association since 2022.
Through direct correspondence between young entrepreneurs and investors, deeper ties and cooperation can be created between them, expanding the choice of innovative investment and bringing a win-win situation for both investors and startups.
What efforts have you made to connect startups from Macau and mainland China? What factors attract startups from Portuguese-speaking countries to enter Macau and Hengqin?
S.C. – Promoting exchange and cooperation with the Mainland, especially with the cities of the Greater Guangdong Bay Area, Hong Kong and Macao (GBA), has always been an important function of MYEIC.
Prior to the Covid-19 pandemic, MYEIC organized annual visits to GBA cities for entrepreneurs to study the business environment and explore opportunities for development.
During the pandemic, MYEIC has not suspended cooperation with the Mainland and has signed cooperation agreements with partners in 11 GBA cities, including the Guangdong-Hong Kong-Macao Greater Bay Area Innovation and Entrepreneurship Incubation Base lead base in southern China and several of the 12 incubators in Guangdong Province.
Through these friendly alliances, the two sides can complement each other’s resources in terms of establishing companies, supporting think tanks and transforming technological achievements, as well as recommending Macao’s young entrepreneurs and innovators for incubators on the Mainland.
With the complete opening of borders and freedom of travel since the beginning of this year, MYEIC will resume overseas visits to guide Macao entrepreneurs who want to venture out to visit incubators and leading companies in Hengqin and the GBA, to meet preferred policies, participate in investment and financing activities, and understand the current economic situation as well as industry policies and regulations.
MYEIC will continue to play the role of a bridge and link for entrepreneurs and startups.
Recently, Parafuturo signed an agreement with Brazilian innovation hub Inova China Hub during Beyond Expo. What are the main objectives of this agreement?
S.C. – Under the agreements, MYEIC and the two entities will strengthen the integration of various innovation, technology and business matching resources, including government, universities, incubators and startups, to promote the development of dual innovation. This is the second time that PFM joins forces with renowned incubators in Portugal and Brazil to promote exchange and cooperation between young people and innovation, following the agreements signed with the Portuguese incubator Beta-i and Fábrica de Startups Brasil in 2018 and 2019, respectively.
In fact, Inova China Hub is one of the organizations in Brazil that has the most knowledge about Macau and the GBA, and they frequently organize events to raise awareness among Brazilian entrepreneurs interested in the Chinese market. They also regularly support Macau’s initiatives and recommend outstanding entrepreneurial projects for the “Innovation and Entrepreneurship Competition (Macau) for Technology Companies from Brazil and Portugal”.
What are the main challenges faced by startups in Macau today?
S.C. – The pandemic has had a profound impact on youth entrepreneurship over the past three years. Keeping the businesses they created alive has become a serious problem for many post-pandemic entrepreneurs.
According to the research we carried out, in the fourth quarter of 2022, 28 percent of the Center’s members were “in the red”, 56.7 percent were able to break even and only 15.3 percent were able to make a profit. According to their feedback, the profitability of startups remained poor, and the prices of the products and services offered were often reduced, resulting in low profit margins.
Second, Macau is a relatively small and highly competitive market, which also poses a challenge for startups. With a population of around 670,000, local demand is limited. Therefore, it is important for startups to have a market expansion strategy beyond Macao in order to reach a wider audience and explore growth opportunities.
In addition, the lack of qualified labor and the difficulty in finding investors willing to support early-stage startups are also challenges faced by entrepreneurs in Macau. The startup investment ecosystem is still developing and it is often difficult for startups to find enough funding to fuel their growth.
However, despite these challenges, Macau has a strategic geographic location and plays an important role as a platform for cooperation between China and Portuguese-speaking countries. With policies supporting entrepreneurship and innovation, as well as market expansion in the GBA, Macau offers opportunities for startups to connect to a wider ecosystem and take advantage of its unique location and resources.
