Inviting Clinton shows tycoon's daring side
When former dam builder-turned-property tycoon Pan Jun invited Bill Clinton to help promote one of his projects in 2003, he created a minor diplomatic storm.
It was the first time a Chinese entrepreneur had invited a former United States president to make a speech and not everyone was happy with the ideological implications. Pan wanted Clinton to come and indirectly promote one of the company's jointly owned projects in Shenzhen, Endless Blue.
The proposal was rejected by Beijing but Pan, chairman of Hong Kong-listed mainland developer Fantasia Holdings Group, insisted. Eventually, the event went ahead despite a lot of official tut-tutting.
'Most people think I am somewhere between stupid and misguided,' Pan said.
The word 'bold' is defined as showing a readiness to take risks or face danger; to be daring or fearless. In the business world, it can also mean being audacious and stepping out in defiance of the status quo. It is certainly a word Pan lives and works by.
Pan, 39, made his first bold move a few decades ago when he quit his comfortable government job in Yinchuan, in northwest China, and dived head-first into Shenzhen's real estate industry.
Listed in November 2009, Fantasia is small fry compared to some of its rivals. It had net profit last year of 373 million yuan (HK$424.7), compared with China Vanke's 5.33 billion yuan.
However, Pan is thinking big. With Baby Zeng Baobao, the largest shareholder of Fantasia, and a niece of former vice-president Zeng Qinghong, he has been looking for niches for the company to grow.
While market leaders such as China Vanke, China Overseas Land & Investment and China Poly Group are primarily focused on residential developments, Pan anticipates that the pace of the mainland's residential market will slow in the next decade. Commercial property therefore beckons as a bigger money-spinner.
Fantasia, even in its present small scale, has diversified 30 per cent of the company's assets to office, retail and hotel operations, with the remaining 70 per cent in the residential market.
How did you come up with the idea to invite Bill Clinton to promote your company's project?
I had thought of two men to improve our image and promote our product. One was Hong Kong actor Chow Yun-fat and the other one was Clinton. Chow's fee was eight million yuan and he was not up to Clinton's level. Clinton only cost US$250,000. It was value for money.
What difficulties did you face during the process of getting Clinton?
Most people thought I was crazy. The central government was shocked and criticised Zeng and the company's then shareholder Chen Hua, chairman of Shenzhen Kingkey Property Development, who paid Clinton the money for the speech. The central government banned the invitation.
But the money had been paid to Clinton, we had to proceed. I wrote a letter to Clinton and asked him to apply for a personal visa to visit Shenzhen. Clinton called the Chinese consulate. The consulate was shocked and called the foreign minister. At the time it was Tang Jiaxuan.
Tang called the Guangdong province chief asking about what was going on. The provincial chief called Shenzhen mayor Yu Youjun. Yu talked to Zeng and I was severely scolded by her.
At last, former Chinese People's Political Consultative Conference chairman Li Ruihuan made a final decision. He said he had no objection. Clinton came and the Guangdong province sent 600 police to take care of his safety.
How effective was this marketing campaign?
Clinton did not directly promote the project. But he said Chen was a good manager, in an indirect way supporting Fantasia and its developments. Endless Blue was one of the best-selling projects in Shenzhen in that year.
Have you invited him again? Will you do it again?
No, I have not. But Chen did invite a number of celebrities including 'Old Bush' (former US president George H.W. Bush) to promote his projects.
What did you learn from the experience?
Think big and your reward will be beyond expectation.
How did you get into this industry?
I was sent to work at a construction department in the Yinchuan government and was involved in dam projects. However, I am a person good at communicating with people rather than cement. So I headed south to be an ordinary employee.
Did you regret the move?
If I stayed, I could have been promoted to vice-director of one department. That's it.
When did you join Fantasia?
I helped Zeng market her first project. I joined after that job in 1999.
Zeng is always the focus of the group. How does her background help the company's business?
We have not got any land sites through this relationship. Even when we had problems inviting Clinton, we did not ask Zeng's family for help. Zeng is also executive director of the listed company. She focuses more on the product quality, and I am responsible for development strategy and marketing plan.
Why don't you follow your bigger rivals and focus on residential developments rather than diversifying into commercial properties?
The growth pace of China's residential market will slow in the next decade. People born in the 90s will accept renting homes as prices rise. As the urbanisation rate hits 65 per cent in a decade, we will see slower growth in demand for homes.
On the other hand, consumption is on the rise and so will demand for commercial property as the economy grows to a more mature stage. Quality commercial clients will help boost the value of retail spaces. We must enter this market ahead of our big brothers. We still focus on residential, but diversify to retail, commercial and hotels.
How do you know you are making the right decision?
You will only know by failing and doing.
How do you chart the company's future? Where do you see yourself in the next five to 10 years? Do you want to be the industry leader?
I hope Fantasia has its own niche in the industry. I do not have to be the leader in the industry. But I hope I can be recognised by the industry. I can contribute back to the industry.
Which company do you think is the most successful developer in China?
It is not easy to name one. Every company's strategy has its merits and pitfalls.