Daniel Chong Wai-chung, chief executive of department store chain YATA, has always done things a little differently. Having led the Japan-themed retailing group for seven-and-a-half years, he has earned a reputation as being something of a maverick with some extraordinary feats to his credit.
In one instance, Chong hiked the bonus for his employees even as the economy was reeling from the 2008 financial tsunami. In another bold action, he waived the conventional slotting fee and shortened the accounts payable days for his suppliers.
Now, Chong is again standing apart from the rest in the industry as he says that he is not opposed to the new curbs on Hong Kong visits for Shenzhen residents.
China’s recent move to limit Shenzhen residents to one Hong Kong visit per week has dismayed most local retailers, who feel like they have been punched on the face.
The industry is worried about the negative impact the policy change could have on retail sales and have called for bigger visitor quotas from other mainland cities to make up the shortfall.
But Chong has taken a totally different view. He supports the idea of limiting the visitor numbers, saying that people have to see the other side of the coin.
“Hong Kong just can’t take in anymore,” he says, noting that locals shouldn’t be in a position where they are “unable to squeeze themselves into an MTR train”.
This is not the first time that Chong has spoken his mind.
The government and the members of the pro-establishment camp have been blaming the Umbrella Movement for damaging the retail sector. Chong was the first industry player to come out and proclaim that the movement didn’t do any harm to his firm.
Pro-democracy supporters have praised Chong for his braveness, and his bold pronouncements won applause from netizens, who said they would shop more at YATA because of Chong’s cool comments.
While some retailers have felt the heat in an industry slowdown, sales in YATA have gone up in contrast. Sales in the first two months of this year were up 10 percent compared with the same period last year.
Nowadays, price is not the only consideration of customers; they also want to see if the companies’ values matches with theirs, Chong explained. “That’s what we call value marketing.”
He has also brushed up his group’s image by rolling out a slew of supplier-friendly policies.
One major move is the removal of unreasonable slotting fee that other big supermarkets usually impose on the suppliers.
Many suppliers are just small and mid-sized enterprises; the expensive slotting fee can easily bar them from entering the market.
Typically, suppliers are asked to pay at least HK$100,000 just to get their products on the supermarkets’ shelves.
“Suppliers have to pay the fee for every single outlet of the supermarket,” Chong noted.
Collection of the slotting fee would effectively mean limiting the varieties of products.
“Who can afford such a high fee? It is only the large companies, and what they supply are usually the standard, most commonly available products. That leaves customers with fewer choices.”
By waiving the slotting fee, Chong requires suppliers to mark down the retail price in exchange. This ensures better prices for customers while also providing market entry opportunity for more suppliers.
At the company’s outlet at the apm shopping mall in Kwun Tong, there is a corner packed with shelves of curry products. YATA staff call it the curry library, an example of how slotting fee waiver practice enriches the product variety.
YATA’s accounts payable policy, meanwhile, is almost unorthodox and very much welcomed by suppliers.
Chong has shortened the payable days from 90 to 30. According to the CEO’s logic, supermarkets have to pay their landlords and workers every month, so why are suppliers paid once per quarter?“We now pay for 80 percent of our products within 30 days,” Chong said proudly.
Born in a poor family, Chong’s parents were both hawkers, selling socks, underwear and school uniform in a street stall at Cheung Sha Wan.
Technically speaking, Chong grew up in the street.
“I was best at selling bras,” he said without any embarrassment. He measured bra sizes for female customers until he was twenty.
“People back then were more simple and pure.”
Do his supplier-friendly policies toward small firms have anything to do with his background?
“Maybe,” he said after giving it a thought.
Chong published a book “The CEO who does not have a meeting” in March, aiming to share his extraordinary management insights with readers.
The CEO is known to be against the idea of having too many meetings.
According to Chong, once the company’s strategy and direction are set, there shouldn’t be any big changes in the short term. Frequent formal meetings are therefore unnecessary.
Chong stays in office six hours a day, mainly checking email and chatting with his colleagues. A boss needs to build trust with employees, giving more autonomy to the staff and let them do their work, he believes.
This article appeared in the Hong Kong Economic Journal on April 14.
Translation by Betsy Tse
[Chinese version 中文版]
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