Tony Tan Caktiong
Dec 12, 2008
*Special to asia!
Napoleon famously said that quantity has a quality of its own. Tell that to Filipino fast-food king, Tony Tan Caktiong.
Tan, 58, and of Chinese descent, rose to his current prominence riding on the 1997-8 Asian financial crisis. During that brief but painful period when the peso collapsed against the dollar, the Filipino middle class ditched restaurants and turned up in droves at Tan’s Jollibee joints where, for US$2 they could enjoy burgers, sandwiches and traditional Filipino fare in air-conditioned comfort.
Tan, who started out with two ice cream stores in 1975, emerged from the crisis as the Philippines’ chief provider of fast-food. His Jollibee chain – a Filipino copy of McDonald’s – outsold everyone, relegating even old McDonald’s to second place, a rare position for the American juggernaut.In 1998, when the peso started gaining strength against the greenback, Tan opened his first Jollibee in Daly City, California, which has a large migrant Filipino population. In no time, Jollibee also opened up in Taiwan, Indonesia, Hong Kong, Saipan, Saudi Arabia, Brunei, and Vietnam.
The son of a restaurant owner, Tan was not fixated on pushing burgers. Rather, he intuitively knew what McDonald’s took years in Asia to find out – that Asians prefer local food, even in the most Westernised of eateries. In Jollibee, spaghetti is served Filipino-style – extra sweet.
In 2000, Tan branched out of Jollibee to acquire Chowking, a Philippine-based chain of Chinese fast-food restaurants. Four years later, he ventured into China and bought Yonghe King, another Chinese fast-food chain. This was followed by Red Ribbon Bakeshop; and Delifrance, a Singapore-based café chain. Then in June 2008, Tan went back to Taiwan and bought the eight-store noodle joint Lao Dong, which it plans to expand to 100 outlets on the island.
Today, Jollibee has more than 1,700 stores worldwide (about 200 of which are outside of the Philippines), employs more than 25,000 staff, and has annual revenue exceeding US$1 billion. And still Tan is pushing each unit to expand.
Some investors are not impressed. They feel that Jollibee Food Corporation, the Philippine-listed holding company, has lost focus. They see nothing common among the half dozen or so brands now amassed under Tan’s ever-growing umbrella. Worse, they fear that Tan has grown foolhardy in his insistence on expansion when consolidation should be the guiding theme for the company. They do have a point. Running a much smaller Jollibee in the Philippines in 1997/8 is different from managing a multinational corporation, which presents a whole different set of issues from cashflow to foreign currency exposure. Besides, competition today is much stiffer than it was a decade ago. Having learned from Tan, McDonald's and Jollibee's other rivals now, too, include local food in their menus, eroding what many consider to be Jollibee's biggest competitive advantage. And, like Jollibee, Western fast-food chains are all keen to expand in Asia to offset the slowing demand in other markets. It thus remains to be seen whether Tan can ride out this crisis as well as he did the last time round.
Lee Han Shih is the founder, publisher and editor of asia! Magazine.
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