ASIA FOCUS : Unlocking the door

UMESH PANDEY

Taking a plunge in markets that are immature and raw can yield rewards although investors have to be more cautious and patient, not rushing out as soon as signs of turbulence start to appear.

"It is like opening up the door, you keep trying until you figure out which is the best key to unlock the door. If you are going to a foreign country you got to be prepared to stay there for a while to understand it, to feel it and to make your business work," said Allan Zeman, the businessman who moved to Hong Kong three decades ago after having dealt with companies in the then British territory for his apparel business.

Mr Zeman, who started working at the age of 10 and had made his first $1 million by 19, says taxes in Canada, his home at the time, cost him about 60% of the $1 million in various forms while in Hong Kong the rate was a flat 15%, making the territory more attractive for the young entrepreneur.

But figuring out the best tax break was not this young man's ultimate goal. Instead it was to move into countries that were still lagging and offered higher returns. Among the options was to use China as the production base and for that he moved to Shaoshan, the birthplace of China's leader Mao Zedong.

"Even in those days, I took the risk of entering the Chinese market. That was some 28 years ago, but I can say that moving into unknown countries such as China is not everybody's cup of tea - you have to work 48 hours a day.

"You have to be committed and you have to make your business work as rarely will it work on its own."

Mr Zeman says that although it was his good fortune that helped him during his years in China, when shipments were taken off the trains in favour of shipments of people with close connections with railway station masters, in the long haul he says the efforts were worth it.

Today, the man who set up Hong Kong's first trendy restaurant, California, in Lan Kwai Fong, a narrow street in Central Hong Kong, has business interests in Singapore, Macau, Thailand, Singapore and other countries.

Mr Zeman, who is also called "the father of Lan Kwai Fong" after helping the area to become one of the most important bar and nightlife districts in Hong Kong, is the chairman of Ocean Park in Hong Kong and has one of the largest houses in Thailand with total space of more than 6,000 square metres.

Mr Zeman, who started his first job as a dishwasher to supplement his pocket money after his father died, says that making moves into a country is all about having the courage to take the first step.

"If you do not have the guts then stay and do what you are doing, as you will not succeed. The ones who succeed are the ones who are not afraid of doing what they want to do," he says.

He added that fears of intense competition in countries such as China should not prevent people from entering foreign markets.

"Thai people need to have confidence and adapt the various know-how to the local operations and make it unique before selling it to the outside world."

Citing the example of the agricultural giant, Charoen Pokphand Group, Mr Zeman says the group has been successful in beating farmers at their own game, with quick thinking and efficient systems in place.

As part of the strategy to move across borders, Mr Zeman says that people should always think ahead, think about tomorrow and think about the downside not just the upside.

Citing the example of Thailand where capital controls and the amendment to the Foreign Business Act have spooked investors, he says that such moves are not positive to foreign direct investments and are a good example of what could happen if investors take a plunge in countries about which they have less knowledge.

Thailand, he says, has great potential, like that of Hong Kong which serves as a gateway to China, but the country needs to open itself more to foreign investment.

Citing the need for clarity in various investments, he says that countries with clearer policies always win the race.

"A country is as good as its leaders. If the leaders are good then things will happen fast. That is the good point of China. China today is very international despite holding on to its identity and it is opening up more and more."

Mr Zeman, who has interests in property, hospitality, clothing and movie production, says that Thailand's strength lies in its hospitality sector and that is where the country could tap into global markets.

Citing the example of Anantara, the hotel chain that is based on Thai hospitality, he says that such products can be sold in the international market.

"China does not need another hotel as they have enough but a hotel with a twist such as those that offer Thai hospitality is something that will sell well. Why do people come to Thailand? It is because of the whole new experience of Thai hospitality," he says.

Such concepts with minimal added value, he says, can still work for other businesses that are looking to enter countries such as China.

China, he says, currently has every product that is there on the face of the planet but products with differentiation is something that could do well there.

"The product has to be something that the other guys do not offer. This is what I call as forced sale, meaning giving people the reason to buy your product or service over those that are being offered in the market," he says.

"Offer more than your competitor, as by doing that you are forcing people to come and it becomes advertising by word of mouth, and the business will flourish," he concluded.

Bangkok Post
Sunday February 11, 2007