A Look at Southeast Asia’s Death Care Industry

The end comes for us all, but funerary services are different the world over. The customers and traditions of one region are often not a good fit for another. To take a deeper look into the funeral industry in Southeast Asia, GLG’s Justin Chan hosted a teleconference with Hung Chye Hoo, the CEO of Singapore Funeral Services. What follows is an edited and condensed version of their conversation.

Could you provide a brief overview of the death care industry in Southeast Asia? Who are the key players, and what is the overall market size?

Southeast Asia itself is very diverse. It covers a huge geographical ground and is a melting pot of different races and religions. For the sake of our conversation, I will zero in on the Chinese-speaking community, which is my expertise. While this area has a large Muslim population, I won’t be talking much about that as it’s outside my range.

Funeral services conform to local customs and traditions. The industry is diverse and fragmented. Certain companies do very well in their own community. There are many family businesses that have lasted a few generations. But I’d single out the Nirvana Group from Malaysia. They have successfully corporatized and are able to cover a larger geographical area. Their stronghold is, of course, Malaysia, but they also have a presence in Singapore, Indonesia, and Thailand.

Within Singapore itself, there are many funeral industry companies. It’s also largely fragmented with a lot of smaller players. This is like a lot of the other places in Malaysia, but customers do recognize branding. They also recognize their local affiliate companies that they have been using for generations. It’s up to the individual affiliation of the families whom they want to choose as a funeral service provider.

Can you talk about growth prospects for the death care industry? Where do you see this industry headed?

Organic growth is projected. The baby boomer population is aging. And this generation is more educated than the previous one. They have a smaller family with more savings and disposable income and are less traditional in terms of taboos and some customs.

This translates to having a smaller event compared with the past. They are less traditional, and the wake is of shorter duration. Smaller families also mean a smaller turnout, which means a slight decrease in revenue in terms of what’s spent for the event.

Are there any new products or new packages that death care services providers are packaging or selling to these clients?

Traditionally, much of the focus was on religious rites, which can take up a huge part of the expenses. But now a lot of families are focusing more on memorializing the person and catering to the guests who are attending. We’re seeing a more personalized custom funeral in terms of choice of colors or catering or flowers and even digitalization and livestreaming of funeral wakes. The trend is toward the preferences of these customers.

How do regional players — like Nirvana, as you mentioned — navigate diverse operational requirements in different countries?

Essentially, they manage to penetrate large geographical areas by working with local partners who are well-versed in the rites and traditions of the different areas. Without those relationships, it’s difficult to assimilate to the local customs. People are unlikely to accept a new way of doing funeral services if it’s completely different from what they’ve been doing for generations.

How are funeral service providers differentiating their pricing model to offer a more premium service? And what’s the key difference between a premium service and a mass-market service?

The premium services are more customized. They’re trying to differentiate in terms of the service standards that are being delivered. Usually, they have an event coordinator who fully takes care of the family. The level of care and concern that they deliver makes a difference to what the family feels. On the other hand, a mass-market service has a “production line” feel. It’s just another funeral. Your staff may not seem as caring.

What is your outlook for the industry over the next three to five years?

We are seeing intense competition due to the low barriers to entry. It’s not as regulated as in other countries. That can be both good and bad. And as I said earlier, we have smaller families who may not be as religious, who may want a simpler event compared with a more traditional funeral, which means diminishing revenue. There’s a push toward cremation in urban cities so that we no longer require a burial plot. With the simpler ceremonies and the shorter duration, there need to be new products and services being offered, replaced, or what’s being offered previously if we want to maintain the revenue.

Going forward, service providers will need to pivot much faster compared with previous generations. But what we see now is cleaner competition — the push to innovate, to differentiate, and to give better service, to stand out in the market.

Everybody is looking into how to better improve their products and services to attract the families, to want to engage them, to help them with the funeral services. We do see some of the younger generations stepping in and bringing new ideas to the industry.

About Hung Chye Hoo:
Hung Chye Hoo is CEO and Co-Founder of SFS Care Pte Ltd (Singapore Funeral Services). He has over 20 years of bereavement experience. He is also BD Director of Life Corporation Services (S) Pte Ltd, pioneering the development of the first fully automated columbarium in Singapore. He is currently the Executive Director of the Association of Funeral Directors (Singapore).

Questions Asked During the Teleconference:

• Could you provide a brief overview of the death care industry in Southeast Asia? Who are the key players, and what is the overall market size?
• Could you share a bit more about the growth prospects for the death care industry? Where do you see this industry headed?
• Are there any new products or new packages that death care services providers are packaging or selling to these clients?
• How do regional players — like Nirvana, as you mentioned — navigate diverse operational requirements in different countries?
• Could you share more about what’s driving this demand, and are you seeing this demand increasing for pre-need funeral contracts?
• How do you see regulation of the pre-need sector? Are you seeing any regulators stepping in? And what kind of regulations do you foresee coming up?
• What percentage of the total death care sales is pre-need?
• And you’ve also mentioned earlier that the client base has gotten a lot more affluent and they’re a lot more educated. And so, how are funeral service providers differentiating their pricing model to, let’s say, offer a more premium service? And what’s the key difference between a premium a service and a mass-market service?
• If you have the data, could you share more about the operating margins for the premium services? What are the profit margins like compared with a mass-market service?
• I just wanted to ask about the potential consolidation opportunities that you see in the death care market. In the next five to 10 years, do you expect to see these smaller family-owned operators being acquired by bigger regional players?
• What are the latest trends in the death care industry in terms of innovative services or perhaps maybe an innovative business model that you’ve come across?
• Do you expect to see any long-term impact arising from the pandemic? How has the pandemic affected funeral operations in the region? And do you see these factors really impacting the way that funeral operators are continuing their operations in a post-pandemic world?
• How are death care services providers preparing for a potential increase in the number of funeral services that they will need to provide for, maybe in the long term, over the next 10 years?
• From an investment standpoint, do you see Asian investors turning to the death care industry now that it’s not so much of a taboo topic?
• Are there any unique challenges facing death care operators in Southeast Asia?
• Are there any potential regulatory risks that investors should be aware of?
• Is there any possibility that the death care services market might turn into a market that’s controlled by a few large players, a duopoly or just a few big players setting the price or just controlling the market?
• What is your outlook for the industry over the next three to five years?
• Just wanted to yield the floor to you one last time, if you have any final thoughts on the industry going forward.