From six men and a van to 400,000 staff and a fleet of 35 aircraft: the making of SF Express
After starting the business in a ‘grey area’, then expanding it amid an economy taking off, SF founder Wang Wei has become the latest inspiration for young Chinese entrepreneurs
Forty-six-year-old Wang Wei has become the biggest talking point in Chinese business this week, as he squeezed into the country’s top three richest after his company SF Holdings Group went public in Shenzhen last Friday.
Wearing a black outfit with his company’s logo, a pair of blue jeans, and running shoes, Wang rang the bell for the start of trading in SF shares – the company he founded in 1993 doing parcel delivery with six men and a van.
This self-made, delivery man turned top tycoon has become the latest inspiration that Chinese youngsters worship.
By Wednesday, SF Holdings’ shareprice had surged by almost 40 per cent since its debut on the Shenzhen bourse. It pushed the personal wealth of Wang up fourfold from the beginning of this year, to US$26.5 billion, according to Bloomberg Billionaires Index.
That makes him the third richest individual in China, after Wanda property tycoon Wang Jianlin, and Alibaba’s founder Jack Ma, while ahead of Tencent Holdings Ltd founder Pony Ma.
SF Holdings is now valued at 262 billion yuan (US$38 billion), at Friday’s close, its shares falling back another 7.8 per cent to 62.60 yuan, but still biggest market capitalisation on the Shenzhen exchange, which has proved a magnet for technology listings.
Wang’s story typifies that of recent generations of Chinese entrepreneurs – he started a business in a grey area, leverage the cost gap between the mainland and offshore markets, and expanded globally using financial strength accumulated amid China’s emergence as a economic power since the 1980s.
“The success of Wang can partly be traced back to the time he started the business. The robust economic growth after the 1990s in China gave birth to explosive demand for timely deliveries,” said independent economist Song Qinghui, author of Interpretation of the New Normal Economic Phase.
But with countless competitors now, and wages rising, the odds against another deliver giant such as SF emerging are huge.
“Replication of his success, would be difficult,” Song said.
Wang founded SF Express in 1993 in Shunde, a minor city in southeast Guangdong Province. It filled its first bucket of gold by offering one-day deliveries between Hong Kong and Shenzhen.
“When SF started delivering packages in the 1990s, it was still an illegal business called ‘black delivery’,” Wang told the official People’s Daily in 2011, in the only interview he has ever given.
“We would be fined if caught by postal officers, so we had to handle packages sneakily,” said the son of a former Russian interpreter.
“I know the taste of being poor, of being discriminated against by people for being poor,” Wang said during a recent speech to his colleagues, mainland media including the Beijing News reported.
“My parents were university professors in the mainland but their academic records were not recognised when we moved to Hong Kong when I was little. So we started from scratch,” he said.
Privately operated delivery businesses have been sprouting, still technically illegally, for years since, boosted by economic growth and online shopping spree.
The authorities only amended the country’s postal laws in early 2009, when it recognised the legitimacy of licensed postal and delivery businesses.
By then, SF Express had also set up the country’s first privately managed cargo airline, SF Airlines, with the approval by the Civil Aviation Administration of China. It now has a fleet of 35 planes.
Its preliminary 2016 adjusted net profits were 2.64 billion yuan, the company disclosed last week, higher than market expectations.
But like many successful tycoons in China, Wang has continued to keep a low-profile, sticking to the principle, say those close to him, that it’s his “political right” — no surprise then, that the 2011 profile was an exclusive to Communist Party’s mouthpiece newspaper.
In 2013, he sold a quarter of the business to a consortium of Chinese state-backed companies, led by Citic Capital. Wang, however, still owns 65 per cent of SF Holdings post-flotation.
Sources say he is famous for being obsessed with improving the delivery industry, and for being fair and standing up for his employees.
During the IPO ceremony last week, he made a brief speech in which he thanked his parents, and urged employees “do more, and talk less”. An SF delivery man who was slapped on the face by a luxury car owner during a road accident last year, was also invited to ring the bell.
After the IPO, Wang lavishly distributed red packets, or lai see, to 400,000 employees that were worth a combined 1 billion yuan.
The minimum was 1,888 yuan each, while outstanding staff were given more than 10,000 yuan, according to company employees.
“The boss is deadly serious about the company’s image,” said Wang Wenbin, a SF express delivery worker.
“Our company has a strict code of conduct for the discipline of its employees, because the boss wants to ensure the very best services for clients.”
SF couriers often have to go through internal examinations which include checks on their fingernails, dress code, and use of language, and the company maintains quality control measures of the services offered by every single delivery worker.
The economist Song Qinghui, says Wang’s tenure as China’s third richest man might be brief as many analysts consider its shares are overvalued after three days of hitting their maximum 10 per cent rise, before slipping back the last two days.
“He also might find it a challenge to stick by his strict strategies and beliefs, now that SF is a public company.”