Mainland consortium Fosun has hit pay dirt, timing its take-off well with China’s opening-up. Group executive Chen Qiyu tells Luo Weiteng their next goal is to polish up their brand as a global technology giant by next decade.
Chen Qiyu, co-president of mega Chinese mainland conglomerate Fosun International, points out that the pursuit of evolving into a technology-powered group is in line with China’s economic reform momentum. (PHOTO BY ROY LIU / CHINA DAILY)
A “down-to-earth man with a can-do spirit” — that’s how Chen Qiyu, co-president of mega Chinese mainland conglomerate Fosun International Ltd, likes to call himself.
It was indeed his pragmatism and go-getter attitude that motivated the genetics graduate of Fudan University to join the once-fledgling company, which bore the imprint of a nation-wide “just-do-it” push and charted its own course of growing into one of the nation’s largest private business groups, when he emerged from the ivory tower more than two decades ago.
Fosun International burst onto the scene in 1992 after Deng Xiaoping, the late architect of China’s economic reform, embarked on his famous southern tour — a move that added flesh to the bones of the mega plan to open up the world’s second-largest economy.
With collective efforts from industrial operations, investment and technology, Fosun is well on its way to consolidating the business empire and benefiting from more synergies
Chen Qiyu, co-president of Fosun International
The Shanghai-based enterprise had timed its take-off perfectly with the country’s journey from self-imposed isolation to a modern market economy.
“Fosun International, whose growth story stands as the living embodiment of an economic miracle seen in the most populous nation on earth, proves to be the beneficiary of the groundbreaking reform and opening-up policy,” says Chen in an interview with China Daily in Hong Kong.
The company was founded by university lecturer-turned-entrepreneur Guo Guangchang and four other graduates of Fudan University — one of the nation’s most prestigious seats of higher learning — using his tuition fees for overseas studies as seed money. It virtually mirrored a gold rush of the times, with aspirants giving up the “iron rice bowl” and venturing into the business world to build up something from nothing.
Next came watching a homegrown conglomerate in the making with the economic overhauls setting the stage for sweeping changes in Asia’s economic powerhouse.
“Riding high on undertakings to ease listing rules for private enterprises under a quota system, Fosun’s pharmaceutical unit, Shanghai Fosun Pharmaceutical (Group) Co Ltd (Fosun Pharma) took the lead in going public on the Shanghai stock exchange in 1998,” recalls Chen.
“The company was at the forefront over the seven years through 2004, playing a proactive part in the country’s State-owned-enterprise reform in sectors including pharmaceuticals, steel and cultural tourism.”
Echoing a push for overseas flotations of private enterprises, Fosun International debuted on the Hong Kong stock exchange in 2007, followed by the listing of Fosun Pharma on the city’s bourse in 2012. It paved the way for the company coming under the global spotlight as a multinational group with its roots in China bringing back foreign brands and technology that fits in well with the country’s quest for the next growth engine, says Chen.
From a humble beginning in pharmaceuticals and property development, the conglomerate has today built up a business empire that spans diversified fields, including pharmaceutical and healthcare, tourism and culture and fashion, as well as insurance and financial services.
To bolster China’s vision of diversifying its economy from decades-long over-reliance on exports and investments to domestic consumption, and become a worldwide leader in artificial intelligence by 2030, Fosun is bankrolling a big effort in biotechnology and artificial intelligence.
“Known as ‘China’s Hutchison Whampoa and Berkshire Hathaway’ for years, Fosun will polish its brand as a technology giant and stalwart innovator,” Chen says.
The company’s investments in biotechnology, in particular, reflect a years-long commitment since its founding, underscoring its status among a crop of Chinese private enterprises making headway in industries like healthcare, caring for the elderly and education — sectors that have emerged as red-hot issues in a rapidly graying community, he observes.
Such industries are poised to be the biggest driving force for robust domestic consumption and strong economic growth that will continue to make China the envy of any major economy, Chen believes.
Fosun plans to invest more than 20 billion yuan (US$3.2 billion) in the innovation-and-technology sector in the next three years, reaching more than 100 billion yuan in the coming decade.
The conglomerate, which owns French leisure vacation chains operator Club Med and Portugal’s largest insurer Fidelidade, is never a money-burning venture capitalist. Instead, it’s a level-headed and practical investor — a character that sees a young upstart taking a good hard road to becoming a gargantuan enterprise, says Chen.
“With great endeavor in industrial operations, Fosun has made its mark. With the foresight to invest in up-and-coming target companies overseas, Fosun has beefed up its presence the world over. Now, in spearheading China’s ambition to lead the pack in the next technology breakthrough, Fosun is jumping on the technological bandwagon.”
“Each part of the story should not be viewed alone. With collective efforts from industrial operations, investment and technology, Fosun is well on its way to consolidating the business empire and benefiting from more synergies.”
Into the elite club
Hailed as one of the company’s key offshoots, Fosun Pharma joined the ranks of an elite club when its market capitalization hit 100 billion yuan in December last year, putting Fosun on a solid footing on the path to becoming an “incubator” of unicorns (privately-owned companies valued at US$1 billion or above).
Known for a broad portfolio of unicorns, Fosun itself has what it takes to emerge as a “super unicorn”, Chen points out. Among the 164 unicorns named by the Chinese Ministry of Science and Technology in March this year, Fosun has invested in about 10 of them at varying degrees. These include companies that Fosun International has substantial stakes in, such as Babytree — a mobile application for would-be and young mothers — and Shanghai Henlius Biotech — a biopharma company that’s said to be planning a US$1-billion-plus listing in Hong Kong as soon as this year.
“Fosun’s technological push could eventually blaze a trail in the creation of unicorns, giving promising startups a leg up to grow into skyscrapers,” says Chen. “Betting big on our global footprints, we’ve also set sail to make its creation of unicorns a worldwide story in Israel and the United Kingdom.”
‘A journey of a thousand miles begins with a single step’
As big as Fosun has become, the largest private-sector enterprise in China traces its origins to the story of young entrepreneurs plowing their earnings, talent and energies into capitalizing on the country’s unprecedented and continuing economic liberalization.
“For an entrepreneurial startup, the first and foremost thing is to survive. Starting up a business is a long-term endeavor. Make sure you don’t run out of ‘bullets’ in the hard early years. If you aim for success, you’ve to be prepared for failure as well,” advises Chen Qiyu, who joined the company two years after its founding in 1992, and was named co-president of Fosun International in March last year.
“Fosun itself is an undertaking that got started through collective efforts. It’s the poster child of how a good team could bring an entrepreneurial idea to fruition,” he says. “The power has always been with the entrepreneurs if they are blessed with a good team in the trenches.”
“It’s a real blessing to have a group of people who cherish the same ideals and follow the same path.”
Despite its humble roots, Fosun has taken a good hard road to the lofty goal of “marrying Chinese momentum with global resources”, being a well-connected local partner for foreign brands and technologies in line with the nation’s growth trajectory, says Chen.
The company is nimble at trend-spotting, gaining traction from successive waves of economic growth and changing business trends in the world’s second-largest economy at just the right moments.
Such a foresight comes from the company’s continuous learning skills, which prove to be a winning growth formula for running a business, Chen observes.
“As the Chinese proverb goes, a journey of a thousand miles begins with a single step. Fosun has risen from a great deal of small victories, which eventually have added up to a bigger one.”
He believes the company owes a large part of its success to going all out down-to-earth. “What matters is to strike up a delicate balance between developing the business in a proactive and steady manner. One should never be overly ambitious, neither should one stand still and rest on his laurels.”
As the latest business trend in China is largely defined by the aspirations of the middle class, the Shanghai-based conglomerate is well placed to gain momentum from the sheer size of the country’s increasingly fickle and choosy “super consumers” who have now gone beyond mimicking the patterns of the more sophisticated Western shoppers to being the trendsetters and innovators.
Chasing after the nation’s holidaymakers who are seeking novel holidays, Fosun had been investing in French leisure vacation chains operator Club Med since 2010, and bought it in its entirety in 2015.
Apart from introducing global circus troupe Cirque du Soleil into China, the company aims to replicate the glowing success of its Dubai luxury resort project in the seaside city of Sanya on southern Hainan province, billed as “China’s Hawaii”, with the official opening of Atlantis Sanya on April 28 this year.
To cater to the growing number of style-conscious consumers, Fosun is also making a big push into the fashion business with the recent acquisition of a major stake in 129-year-old French fashion house Lanvin and Austrian luxury textiles firm Wolford.
The company has also carved out a new unit, Fosun Fashion Group, to manage its rich portfolio of fashion assets, including St John Knits, Caruso, Folli Follie and Tom Tailor.
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