HK retailers saw one of the worst years on record in 2016, but TSL jewelry group decision-maker Estella Ng tells Sophie He shrewd running and strategy had helped them win the day.
Estella Ng Yi-kum, deputy chairperson of Tse Sui Luen Jewellery (International) Ltd, says the group had prudently navigated the economic downturn in 2016. The jewelry chain has now set its sights on the Chinese mainland market, which will continue to be its future growth engine. (Parker Zheng / china daily)
When the going is rough, riding the tiger with skill and shrewdness may not be that hazardous after all.
That’s what probably Tse Sui Luen Jewellery (International) Ltd (TSL) — one of Hong Kong’s oldest and well established jewelry and investment chains — found as the city’s retail industry underwent one of the toughest years on record in 2016 amid a global economic downturn and a shattering slump in tourist arrivals, says Estella Ng Yi-kum, the group’s deputy chairperson, chief strategy officer and chief financial officer.
It was, indeed, a dreadful time for local retailers, in particular, the jewelry trade, but good companies can still rake in the dollars in a challenging environment, she believes.
“In the heyday, companies may still go bust. But, in bad times, with good management and strategy, they may still be able to make it with handsome profits,” she tells China Daily.
TSL, which has been in business for 46 years, performed relatively well last year, driven to a great extent by its operations on the Chinese mainland, having recorded decent growth of 1.5 percent year-on-year in terms of same-store sales.
The market, she predicts, will remain volatile in 2017, mired in uncertainties, politically and economically, as the world tries to fathom out the aftermath of such shocks as Britain abandoning the European Union, and the protectionist and combative policies of new White House occupant, US President Donald Trump.
“For the retail market, we still need to fasten our seatbelts in the next 12 months while positioning ourselves and seeking new opportunities.”
The Chinese mainland, Ng says, will continue to be TSL’s future growth engine as the country currently accounts for more than 60 percent of the group’s entire operation.
TSL, which is also engaged in property holding and the logistics and supply-chain business, will open up a further 100 franchised stores on the mainland in the next two years. At present, it owns 316 stores there, including 115 franchised outlets.
“We’re on target,” says Ng. “The ratio of our self-run and franchised ones is 2:1. So, for every franchised outlet, there’re two self-operated stores. A few years down the road, the number of our franchised stores will take up 70 percent of our total on the mainland. This means that the pace of opening up new franchised stores there will be much faster than that of self-operated ones.”
Eye on mass market
In Hong Kong, TSL keeps the number of stores at around 26 but, for the past two years, its business strategy has changed as it tries to replace some of the stores at prime tourism centers with ones that are near MTR stations. The aim is to cater more to local residents and the mass market as the mainland tourist pool shrinks and people’s shopping behavior changes, says Ng.
Currently, about half of the chain’s local stores are located in prime tourist centers, while the rest are focused on the mass market.
According to Ng, the appetite for jewelry and diamonds among the middle class is still very strong. While about 22 percent of TSL products are made of gold, the rest are mainly jewelry and diamond creations, and the company is cooperating with international designers to launch cross-over products.
“We’ve also widened the price range. We’re not just targeting high-end products. We do have affordable ones for those looking for something that’s reasonably priced — products that you can wear every day to work or use as small gifts for yourself.”
Young consumers are not left out either.
“We’re not just focusing on large diamonds, but also on smaller ones with elegant designs that are much admired by younger consumers. You can see the appetite as it’s on the rise as opposed to traditional products.”
Apart from shifting business strategy, TSL has jumped on the e-commerce bandwagon — a sector that may be small for the company, but is growing very fast.
In 2015, when TSL launched its e-commerce platform, the revenue generated then was about HK$5 million, while the second year raked in between HK$30 million and HK$40 million.
Ng believes e-commerce does have great potential with a huge market and a trend that everybody is following, particularly on the mainland.
E-commerce accounts for some 3 percent of the group’s turnover and it aims to lift the proportion to 5 to 10 percent in the next few years.
“Fundamentally, we’re trying to get our products across to different types of consumers, regardless of whether you’re a sophisticated client, from the middle class or a teenager. Whenever they visit our stores or our websites, there’s always something for them to buy.”
According to TSL’s latest interim report, the group’s net profit dropped 24.1 percent to HK$11.7 million, while turnover fell 11.6 percent to HK$1.55 billion for the six months ended August 31, 2016, compared with the corresponding period in the previous year.
‘There’s no glass ceiling, go out and work like you’re a man’
Estella Ng Yi-kum, deputy chairperson of Tse Sui Luen Jewellery (International) Ltd, rose through the ranks — from an audit accountant earlier in her career to one of the top posts in the local jewelry group.
Initially, she had a stint in the city’s securities scene, having served as senior vice-president in the Listing Division of Hong Kong Exchanges and Clearing Ltd (HKEx), as well as various other senior positions.
Ng recalls that when she joined HKEx, just a mere 200 companies had been floated in Hong Kong. By the time she quit the bourse operator 10 years later, the tally had climbed to more than 1,000.
“In the decade I was with HKEx, the philosophy I learned was that change was constant as I had seen companies being listed, only to go to the wall in a few years and then disappeared.”
Even in very good times, she observes, enterprises may fail and go bankrupt. But, in bad times, with good management and strategy, companies are still able to make huge profits.
Ng switched to Hang Lung Properties Ltd in 2003, becoming an assistant director of finance, and was there from 2003 to 2007. She had the honor of being the first female executive director in the company who’s not a member of Chairman Ronnie Chan’s family.
In January 2008, she teamed up with Country Garden Holdings Company Ltd, serving as chief financial officer until April 2014.
“I was in the property business for 11 years, and learned that whenever there’re risks, there’re always opportunities,” says Ng, adding that in a property downturn, properties are illiquid. “So, when the market isn’t good, you can’t sell just one bedroom or a dining room. Financial management and risk management are very important in the property industry.”
After she joined TSL in 2015, she found it was a very different but very dynamic industry as the retail sector offers a lot of challenges and fun.
“I can always apply my previous knowledge here, the risk management and corporate governance, and always look ahead, think ahead.”
Ng points out that, in the property business, the management team needs to think at least three to five years ahead while in the retail sector, it’s is the same although the market conditions are beyond one’s control and people can build up a good foundation.
“For example, the company has to plan ahead, whether it wants to be more focused on the Chinese mainland or in Hong Kong in the next three years.”
She says what she likes most about TSL is that it has had a long history and the owners are very devoted to jewelry.
“We’re not just selling products, with the design and everything. We really appreciate the jewelry.”
As a business leader, Ng stresses it’s very important to stay positive — whether it’s a good day or not, you’ve to get up in the morning, it’s another day and a new start.
“A positive attitude would influence your colleagues and anybody around you and, with such an attitude, you can think of something that’s more constructive.”
She stresses that a leader has to know his or her own weaknesses — nobody’s perfect, but only when you know your strengths and weaknesses, you’ll know how to rectify them.
And, a leader should also be equipped with the required knowledge, skills or language.
For young women aiming to have a career, Ng suggests they shouldn’t restrict themselves in whatever they do just because they are female.
“Go out and work like you’re a man, and don’t think there’s a ceiling for you because of your gender. And, women need to strike a balance between the family and career, as the family is our shelter. Whether it’s in good or bad times, we can always go home.”
Never give up, she advises. For a woman, if you don’t feel good, you can have your cry, and the next morning, always wake up and start to fight another day.