New World Development brings in reforms from building to retail
Adrian Cheng is leading across-the-board reforms at the company his family founded 40 years ago, from residential development to retail
New World Development conducted a major overhaul of its operations last year to try to recapture its status as one of the city's top three developers in the next five years.
As part of the overhaul, the developer, which celebrates its 40th anniversary this year, turned to the third generation of its founding Cheng family. Adrian Cheng Chi-kong, 33, was appointed joint general manager in February last year after the retirement of his grandfather, Cheng Yu-tung, as chairman.
At the same time, Henry Cheng Kar-shun, Adrian's father and son of Cheng Yu-tung, was appointed as chairman of New World.
"I lost 17 pounds over the past year as I was so busy," Adrian Cheng said with youthful candour at a "meet the press" session at the group's Grand Hyatt hotel earlier this month.
Cheng, who graduated from Harvard University, first joined the group in 2006.
Shortly after he joined, he was appointed to manage New World Department Store China. He was also charged with developing K11, an art shopping centre in Tsim Sha Tsui, owned by the group.
In 2007, he was appointed an executive director of New World Development, and in 2009, he took charge of Chow Tai Fook Jewellery Group, which is owned by the family.
Now he is playing a key role in the reform of the group, which got under way in 2011.
"One of our objectives was to improve our building quality and shorten the development period of our residential projects," Cheng said. "We aimed to provide a new living experience for our residents, and conducted many focus group interviews to determine their preferences.
"We also wanted to be innovative in property sales and design. We chose architects who are strong in art and culture to design our project. We wanted to differentiate our product from our competitors."
The New York-based architect Tony Chi was appointed to design the Happy Valley luxury project and the Singaporean architectural practice Ernesto Bedmar to design the Yuen Long clubhouse project.
To improve its brand recognition, New World Development sponsored the Cross Harbour Race and the 2013 fireworks display on New Year's Eve.
"Our brand awareness was improved, the building quality of our developments was improving gradually, we set up a new construction team to improve the quality of our products, and we shortened our development period," Cheng said, pointing to the development of the Signature, a new residential project in Tai Hang, as an example of the reforms .
"Buyers were satisfied with the building quality when we handed over the flats. But for us that was not enough. It is important to maintain good quality, as we have eight new projects this year. I hope our residential developments project the image of being modern, chic, contemporary and elegant. The quality and materials of our projects have to be in line with or even better than the other developers."
New World had been criticised in the past for poor execution in achieving sales targets. To improve the execution, the company developed a new information technology system.
"It helps us to manage the development progresses such as winning building plans and pre-sales consents," Cheng said.
"It also facilitates communications between departments and can help shorten the development period and launch the projects for sale earlier.
"That's why we were able to release the Riverpark in Sha Tin and the Signature in Tai Hang for sale on schedule."
The group also established a department to investigate and develop new facilities for its residential projects. Keeping in step with changing demands and understanding the needs of customers was one of the company's major focuses this year, Cheng said.
To that goal, it mines information on customers signed up as "VIP members" at Chow Tai Fook Jewellery outlets and New World China.
Chow Tai Fook had 900,000 people signed up to VIP membership through its mainland stores and 7 million, including tourist shoppers, in Hong Kong, Cheng said, while New World China had 100,000 VIP members.
"In Hong Kong, we have more than 700 VIP members in our residential section. This network helps us to understand our customers' preferences and buying habits," he said.
Digital marketing will be another focus this year, while the group has established manpower training programmes and Cheng presents an on-line video every three months which provides his ideas for the development of the group, which managers are encouraged to watch.
"We are different from investment banks," Cheng said. "They may fire people when business is not good. We have a long-term commitment to our staff and hope to grow with them."
Despite all the improvements, Chen gives himself a score of just 50 out of 100. "I'm really grateful that my grandfather and father gave me confidence, freedom and the podium to exert my influence over the company. I learned to stay low profile and work steadily from them."