China’s new billionaire entrepreneurs
Anna Healy Fenton
The latest China rich list, China’s Tycoons, published by Week in China, names 125 mainland billionaires. Included are many older magnates who made their money in well-worn sectors like textiles and construction. Much more interesting are the younger entrepreneurs. Here are three of the most inspiring, relatively youthful businessmen and women who have made their fortunes in very competitive and different areas. Their stories highlight that success is only limited by imagination and determination and often involves initial setbacks and a daring attitude to risk.
Fortune favours the brave
Wang Wei is one of China’s most intriguing billionaires. So much so that private equity firms have reportedly offered 500,000 yuan (HK$634,096) to any middleman who can arrange dinner with him.
His company SF Express – the Chinese version of Fedex – grew its reputation by word of mouth. They never advertise. Founder Wang, 41, declined all media interviews until 2011, keeping such a low profile that in 2010, Hong Kong’s Next magazine, fascinated to learn more, sent an undercover reporter to work for SF Express for three months.
Born in Shanghai, Week in China recounts Wang’s move to Hong Kong as a child. He founded SF Express in 1993 with a US$13,000 loan from his father, formerly a Russian interpreter for the People’s Liberation Army air force. From six delivery men, including Wang, and a van, SF Express grew its cross-border express delivery services. He was, says Week in China, among the earliest parallel traders to shuttle across the Hong Kong-Shenzhen border.
Wang competed with cheaper fees and reliability, and according to Next, he collateralised the entire company to the Bank of China to borrow US$550,000 in 2005 to fund his China venture. It worked and business took off, riding on China’s booming e-commerce wave.
The audacious Wang acquired two Boeing-757 jets in 2009. Revenues hit US$1.5 billion in 2011, according to Forbes, putting Wang on China’s richest list in 2012 with net worth of US$1.2 billion. In 2010, Wang bought a trophy house in Kowloon Tong. He brought in new investors last year when China Merchants led a consortium of state-controlled firms to acquire a 24.5 per cent stake in SF Express for 8 billion yuan, according to Week in China. This valued the courier at 32 billion yuan, or 25 times over 2012 earnings.
SF Express’ valuation, and Wang’s net worth, are set to surge again, should SF Express go the IPO route, which looks likely as rivals Fedex and UPS have won licences to open in some Chinese cities. Week in China values Wang’s remaining stake in SF Express alone is valued at about US$4 billion.
The comeback queen
Zhejiang-born He Qiaonv’s father was a landscape gardener, so she was following a family tradition by enrolling at Beijing Forestry University to study landscaping and horticulture. After graduating in 1988, she worked in Hangzhou. A visit to a bonsai exhibition a few years later in Beijing inspired her to launch her own business selling the miniature Japanese trees. She branched out to buying plants in Guangzhou and leasing them to five star hotels in Beijing. She ran a florist outlet in the New Century Hotel, which led to her taking over the hotel’s landscaping works.
Her initial success hit a setback when a manager ran off with company cash, and an investment she made in iron ore failed. But she persevered and in 1994, started landscaping property developments for foreigners in the Beijing suburbs. She prospered. “In 1995 and 1996, almost all of Beijing expat real estate landscapes were done by us,” Week in China quotes her as saying. He, 48, was now doing high profile projects, such as Oriental Plaza.
In preparation for listing, her company Orient Landscape expanded rapidly and by 2003, she had 80 projects on the go across China, with 700 staff.
But the Nasdaq bubble bursting scuppered her IPO, stretching her to the limit. Heavy cutbacks shrank the workforce to just 200 people.
But she bounced back when the economy improved and in 2009, a growth enterprise board, the ChiNext, launched in Shenzhen. By then Orient Landscape had recovered and was providing landscaping services to prominent municipal projects, such as Beijing Airport’s newest terminal. The company finally listed in 2010, making He one of China’s richest women, placed 79th on last year’s Hurun Rich List. He’s fortune is worth 13.5 billion yuan
More to life than work
Li Lixin, 47, got his first salesman’s job as a 19-year-old school leaver in a stationery factory, rising to manage the sales team. He saved hard for six years and started his own stationery business. By 1993 it was earning 1 million yuan
Li then changed direction, setting up Lisi Plastic to make plastic household items in a Ningbo workshop. In 1994 he displayed his wares at the Canton Fair, and although his English was basic, he convinced an American buyer to place a 1.5 million yuan order for six containers of goods. Business flourished and he was soon working with a network of US agents selling his products abroad.
By 2004, he was running Asia’s largest Household plastic factory, with sales of 1.5 billion yuan, supplying Wal-Mart and Carrefour. He was exporting to more than 100 countries, with 90 per cent of his goods going to Europe and America, leaving him vulnerable when the financial crisis hit in 2008. He responded by investing 120 million yuan in R&D to improve product quality, co-operating with Tsinghua University. The average price of his products rose.
Even before the crisis, Li planned to transform his business. Modelling the success of the Waltons of Wal-Mart and IKEA’s Ingvar Kamprad, Week in China says he decided retailing was the way ahead and in 2006 took over Ningbo’s top department store. He then bought up malls, supermarkets and department stores in third and fourth tier cities. Lisi currently has 10 department stores and 40 supermarkets. Their sales now represent 60 per cent of group profits.
Famously known as China’s “Plastics King”, Li injected part of Lisi’s assets into a listed company; Magician Industries, as a vehicle for further non-retail expansion, now focused on financing alternative energy start-ups.
Li advocates a work-life balance. In a letter to staff, he wrote: “Run a family the way you run a company. Even though you are going to have a lot of work to do you can’t forget the birthdays of your wife or your child. Spend more time with your family! Buy them presents and also encourage them in the love for learning!” Li is worth 4 billion yuan, ranking him 492nd on last year’s Hurun Rich List.