New World Development
New World Development Co (HK stock code 0017) is a Hong Kong conglomerate with operations in property, infrastructure, transport, retailing telecommunications and bus and ferry operations.It is controlled by Chow Tai Food, a holding company owned by businessman Cheng Yu-tung.
Adrian Cheng masters art of business early
New World's point man on mainland brings creative touch
Third-generation entrepreneur Adrian Cheng Chi-kong is not a frivolous playboy whiling away his time in nightclubs. In fact, he is a serious young man.
The baby-faced grandson of billionaire Cheng Yu-tung and son of Henry Cheng Kar-shun is hard-working, articulate and has a good memory for statistics. Those attributes come in handy now that he is in charge of running the family's retail operation on the mainland.
He is so serious about his work he even visits his stores disguised as a customer to get a feel of how business is going.
In keeping with his work ethic, the health-conscious 29-year-old deliberately keeps his distance from Hong Kong's paparazzi, who are constantly on the lookout for foibles of the rich and famous.
Mr Cheng has been in the spotlight since last year, when he received his first big assignment - to prepare his grandfather's spinoff of New World Department Store China and its post-listing activities.
He is now the executive director for NWDS China, New World Development and New World China Land, the Hong Kong-listed mainland property arm of New World.
Fluent in Cantonese, English, Japanese and Putonghua, Mr Cheng holds a Bachelor of Arts from Harvard University. He worked for investment banks Goldman Sachs and Credit Suisse before joining the family business.
You were born with a silver spoon in your mouth. Do you think you are lucky?
This is a difficult question. It depends from which angle [you look at it]. For some people, money is everything. But to be frank, I often ask for how long parents can support their children. There comes a time when the younger generation has to rely on themselves instead of their families. No matter how much money you get from your family, things can't work if you don't seize opportunities. Luck favours the prepared mind. I cherish opportunities and want to be prepared to grab them.
Your grandfather Cheng Yu-tung has 10 grandchildren. Do you face a lot of competition from your cousins?
No. We have very good relationships with each other.
Does your family have high hopes for you and are you under pressure to live up to your family's expectations?
My family does not put me under a lot of pressure. It is the opposite - they give me a lot of flexibility. I made the decision to work at Credit Suisse and Goldman Sachs before joining the family business. Actually, most of the pressure comes from myself as I always want to try my best.
Do you think you are an ambitious person?
What is the definition of ambition? Everyone likes success and I am no exception. But my motivation comes not from my family but from myself. For me, success doesn't mean money but the whole process of proving my value to society.
Your family engaged in everything from jewellery and property development to investment and infrastructure. Why did you choose to start with department stores? Did you select the sector you were interested in?
After graduating from Harvard, I worked for investment banks in various areas such as asset management and initial public offerings, so the public floatation of NWDS China was the chance for me to use that experience and expertise.
I didn't particularly choose a sector - this was just a chance for me. I am also the executive director of New World China Land and take care of a private equity fund under New World Development, which spots investment opportunities and invests in companies set to go public in one to three years.
Are you interested in department stores?
Yes. It's a challenging industry, particularly as NWDS China's market is the big mainland. Consumers in different cities have different tastes and even in the same city, their tastes change quickly. So our product mix changes every season and sometimes every month to fit in with that.
And every city is new and unique for me. I need to know the population, traffic, personal income and related statistics for every district.
Do you visit your stores from time to time? Have you ever disguised yourself as a customer to check if things are going well?
Yes. We have 32 stores and I visit them every one or two months. Sometimes I go there under cover as a consumer, as this can give you a true picture of the real operation.
What is your strategy for improving operating margins?
In direct sales, we sell more leather goods such as lady's handbags and men's suitcases because these products are less affected by seasonal factors and the pricing can be very high. And we are improving customer loyalty through our VIP programme, which provides our VIP customers with free cheese cake, lounges and massage chairs as well as a free personal shopper. We have attracted 1.23 million people, with most of our VIP customers being ladies.
What are your plans for expansion?
We'll keep buying new properties and open new stores in the big cities. NWDS China's advantage is that it can co-operate with our parent or sister companies to achieve synergy.
What is your view on family businesses?
The most important thing is to move forward with an understanding of the past. First, you have to know the history and origins of the family business and understand the value of the business. In the future, you can add creative elements in running the business. Now I am still at the stage of learning and understanding.
What is your management style and how is it different from that of your father and grandfather?
I encourage open discussions among team members and hope the company I run is a learning institute. I hope my employees can be innovative, accountable and committed to what they are working on. My role is like a gallery owner and every employee is a painter. I provide the canvas and paint brush for them and sit beside them until they finish the artwork. As for my father and grandfather, I will keep learning from them.
In the theory of running a business, some prefer taking care of everything while some focus on strategy. What type of person are you?
At this stage, I am in between. Strategy is definitely important, but operations can't be overlooked. Of course, I give power to my employees, but the most important thing is that they need to know what I want.
For me, action and performance mean more than words. And I show them with my own actions. When NWDS China went on an international roadshow before the initial public offering, I saw about 300 fund managers within two weeks. Everyone was super tired, but in retrospect, it showed I am one of the team, not just their boss.
What is your attitude towards work?
I like working. If I take several days off, by the second or third day I start to think about work and check my BlackBerry. Sometimes, I go straight to the office since it's better to talk to people directly than communicate via the BlackBerry.
What sort of person are you?
I'm independent. I guess that's because I went to study in the US at the age of 13 and didn't have any relatives or friends taking care of me.
What frustrates you?
It's impossible to have everything as good as expected. So I definitely have frustrations but I don't lose heart. The most important thing is I have tried my best. I am young, so sometimes frustration can be a motivation.