Henry Sy: How innovative retailing for the masses built a business empire
CROSSROADS (Toward Philippine Economic and Social Progress) - Gerardo P. Sicat (The Philippine Star) - February 6, 2019 - 12:00am

On his passing just a fortnight ago, Henry Sy was the richest Filipino on the Forbes list of world billionaires. He started selling shoes to the masses and made it big into many directions of business.

As a result, his company is a big presence in the Philippine economy today. Forbes estimated his net worth at $19 billion.

Beginnings. Henry Sy was born in Fujian, China in 1924. When he was 12 years old, he followed his father’s path who had earlier immigrated to the Philippines. By that time, his father owned a cramped sari-sari store in Manila.

That was the way of most poor Chinese immigrants who inched their way through to survive economically. Being essentially penniless, they started without much capital except for their work and thrift. It was either in the food industry, in buying and selling scraps, in laundry and personal services, or in owning a corner sari-sari store.

The sari-sari store was general retailing for everyday small needs, catering mainly to the immediate neighborhood. Indeed, it was a very small beginning, almost from nothing.

Chinese immigrants usually grew prosperous from their lowly economic station from hard work. That was the case for the family. Through long, hard and patient work, progress was slow but steady.

Henry was educated in the Chiang Kai-shek School, a school for ethnic Chinese living in the Philippines, for his early schooling. From there, he enrolled in Far Eastern University, one of the growing private universities of the country.

He must have learned his retailing from his sari-sari store experience. His formal education alerted him toward more business sense.

His first major business venture was selling shoes for the common man. He thought that if he could sell as many shoes to the ordinary citizen it could eventually lead toward a fortune. For men and women, boys and girls (he probably thought) were as plentiful as the nation’s people. And that was a solid basis for a business.

The Shoemart Store. He thus conceptualized a modest store in a busy corner of the just reconstructing Manila after the Second World War. The Rizal Avenue near the intersection of Carriedo St. – the end of that busy thoroughfare – was saved from total destruction and was easily rehabilitated after the war.

He found a place there, along the same side of the popular movie theater, the Ideal Theater where new releases of MGM movies were shown. That was the original Shoemart Store location, and the year was 1948. Flanking the other side of Ideal Theater along Rizal Avenue (known as the Avenida) was the Good Earth Bazaar, a store popular during the Commonwealth and war years.

The foot traffic of shoppers was, thus, partly captured, a critical aspect of successful selling. As they say in real estate, location, location!

Moreover, the Shoemart area at the Avenida corner on Carriedo St. ended at Plaza Goite that was at the foot of Santa Cruz bridge. This plaza led easily to Escolta St., then still the main shopping center of those years. That was only a 10-minute walk away to the Berg’s Department Store on Escolta, the prime shopping attraction then.

A store just does not succeed into a big business. The central source of effort – the owner, in this case, Henry Sy – must have been inspired, well-motivated as a manager and inspirational to his co-workers in many ways.

For instance, the store arrangement of goods had to provide for good viewing of the merchandize on display, allowing the availability of various choices for shoe-buyers from the viewpoint of style as well as considerations of economy of the pocket.

There was no room for cluttering the display space with inventories. But the stock rooms in the back-office could be crowded and properly-sized-and-classified and ready to serve quickly the requirements of the buyers who were trying the shoes while in the store.

Eventually, this synergy of store display, stock room readiness and worker efficiency in meeting calls for shoe sizes and style choices would improve, and then further improve.

Another important trait was to understand that shoe sizes and styles had their peculiarities in demand, but they also followed a statistical law of averages. A proper attention to these aspects of useful information related to the sizes and shapes of people’s feet. Moreover, the demand for shoes was also affected by the vagaries of changing styles which affect the buyer’s tastes.

The businessman’s strong sensitivities to these situations were important. Buyer demand had to match with supply for shoes on order from suppliers (the shoe producers). These risks must have taken a lot of study and attention for the serious businessman.

Hence, Henry Sy must have built his profits first from mastering shoe-selling from all the above three elements. (1) High volume of sales because of good location. (2) Understanding the average buyer of shoes from the standpoint of physical attributes as feet sizes, the buyer’s income capacity, susceptibility to style preferences and needs. (3) Understanding the capacities and limitations of the shoe manufacturers that supplied the merchandize to be sold.

From these, he learned the art of inventory management for the seasonal changes, as well as to minimize losses due to overstocking.

Profits and expansion would not be realized if the business failed to link suppliers to what the people wanted to buy. In going about this process, the guiding principle was that the shoes had to be reasonably priced and that their quality lasted.

Shoemart succeeds. It was in this Rizal Avenue-Carriedo St. location that the Henry Sy business empire began to germinate.

The profits he earned from the Shoemart enterprise did not stop him from thinking big. Profitable operations from year to year would deliver the seeds for further successful growth.

Essentially, that would be the source of future growth for his various enterprises during the 1970s to the 1980s.

Henry Sy would accumulate a growing pile of savings that enabled and propelled him to venture far, wide, into other possibilities while never losing his anchor from his passion – his store.

He would even find his interests growing widely, while at the same time investing further in improving and enlarging his store.

My email is: gpsicat@gmail.com. For archives of previous Crossroads essays, go to: https://www.philstar.com/authors/1336383/gerardo-p-sicat. Visit this site for more information, feedback and commentary: http://econ.upd.edu.ph/gpsicat/

HENRY SY
Philstar
  • Latest
  • Trending
Latest
Recommended
Are you sure you want to log out?
X
Login

Philstar.com is one of the most vibrant, opinionated, discerning communities of readers on cyberspace. With your meaningful insights, help shape the stories that can shape the country. Sign up now!

SIGN IN
or sign in with