Chinese entrepreneurs in PH: What makes them tick?

By: Myrna Rodriguez Co, December 23rd, 2012 07:05 PM

Henry Sy.  Lucio Tan. John Gokongwei. Just a few of the so-called taipans in the Philippines.  Migrants or sons of migrants who started small but grew phenomenally to own global business empires.   There are many more of them, less recognizable names, smaller-scale and less prosperous perhaps, but still with thriving businesses in their own right.

What makes many Chinese entrepreneurs so successful in our country?

A vivid memory of my childhood in Gagalangin, Tondo, is a genial Chinese shopkeeper called Sin Teng.  He had gold in his teeth, silver in his hair, and was always smiling, even when naughty young boys made fun of his accent and called him “Intsik beho.”

Right beside our house was another sari-sari store owned by a local couple, Mang Pepe and his wife. Sin Teng’s was our preferred source even if we had to cross a mean street to buy from him and he didn’t allow credit which Mang Pepe did.

Compared with local stores, Sin Teng’s never ran out of merchandise and always sold slightly cheaper.  It was also much bigger, more well-lighted and ventilated and more welcoming.  You didn’t have to shout “tao po, pabili po” to be attended to.

He would send our family gifts on special occasions.  I remember ponkan on Christmas and tikoy on Chinese New Year.  He had a soft spot for my mom who was a Chinese mestiza and could talk with him in faltering Mandarin.

Shortly before I left Gagalangin to settle down with my new family in Pasig, Sin Teng had closed his sari-sari store to open a hardware business in a more commercial location. I realized he was going up in the world, just like most other Chinese migrants who began humbly.

Studying the so-called Chinese mystique may uncover some lessons the newbie entrepreneur may pick up lessons from.

When one is a member of the minority race in a country, he has to be very resourceful. There are tough barriers he has to overcome to get into the more conventional occupations usually reserved for the locals. He usually has to explore other options and all too often he chooses entrepreneurship. Even then he has to work doubly hard.

The Chinese—or at least the first-generation migrants that came from China to the Philippines shortly before the war—were steeped in the Confucian values of industry, frugality, self-discipline, and respect for their elders.

They came here hardy and ready for hard work. No work was too menial that they wouldn’t take. They did not mind long hours, measly wages, or inhospitable working conditions.

Most of all, perhaps, they came here needful. And need is the mother not just of invention but also of the enterprising spirit.

When they put up their businesses they were content to begin modestly. Not for them were plush offices and air-conditioned lounges. They were willing to sit on apple boxes while conducting their business while a sensible electric fan rotated close by. They had no second thoughts about mopping floors, carrying heavy merchandise, selling house to house, and doing almost anything to keep their business going. They tightened their belts, and kept an eye on future and long-term benefits. When they earn profit, they didn’t rush out to buy sleek cars and luxurious homes but rather ploughed this back to grow their business. Psychologists call that “delaying gratification.”

The present generation of Filipinos will hardly remember them as small shopkeepers.  Nor as magbobote, magtataho, cochero.

No, they won’t remember. Today, the Chinese own retailing chains, large factories and big-scale agri-businesses and dominate the airline,  shipping and banking industries.  They are estimated to control one-third of the 1,000 largest corporations in the country.

It is said that the basic Chinese principles of doing business have been written down many years ago by the ancient taipan Tao Zhu Gong. Of these, the most well-known and practiced is the strategy of seeking low profit margins while aiming for high sales volumes, as applied by retailing tycoon Henry Sy, Jollibee’s Tony Tan Cak Tiong, and yes, even by the genial Sin Teng.

Many business principles have been inspired by Tao Zhu Gong:

Do not be short-sighted; look at the larger picture, instead.  Be focused and decisive; a focused person does not seek the limelight nor unnecessarily rush into battle with competition.  Be alert to new opportunities and analyze changes in the economic environment, especially those threatening your business.  Don’t overspend just to make a good impression.  Be flexible; stubborn people do not make good leaders.  Work hard and lead by example.   Know when to score and when to retreat gracefully.  Be mindful of the business cycle;  when prices fall, they will rise later and vice versa.  Don’t overbuy on credit nor extend too much credit to customers.  Run your business on the bases of honesty.  Etc.

The traditional Chinese way of raising children also resonates with Confucian values. Children raised in the old Chinese discipline had to learn a trade or a craft or an artisanship in their formative years. Rather than hang around and chill out during off-school days, they worked in the family business or in the business of a family friend as young trainees, beginning their apprenticeship doing the most menial jobs. They obeyed and revered their elders. They knew the value of work and were told from the outset: Everything you want to have, you have to work for.

The second and third generation Tsinoys may no longer be as stoic or as driven as their patriarchs. However, being scions of self-made taipans and even of lesser entrepreneurs, they were sent to the best schools and got premium education.

It is this generation of highly educated Chinese entrepreneurs that have improved and innovated mostly traditional businesses handed down to them by their patriarchs and parlayed them into the modern, highly systematized and professionalized, global business empires they are now.

(For more articles on entrepreneurship and small business management, visit the Small Enterprises Research and Development Foundation website at www.serdef.org.)

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