Gen2 family firms look to world future(2)

Study abroad

"Many young family members who were born in the 1970s or 1980s, had an overseas education, have different characteristics and enjoyed a comfortable life, unlike their parents," said Yu Mingyang, a professor at the China Enterprise Development Institute of Shanghai Jiao Tong University.

Jin Feipeng, for example, a 32-year-old Wenzhou-born son of the founder of Shanghai Jiuding Clock Co, transformed the family company from a basic manufacturer into a top brand in the world clock industry after taking over the business seven years ago.

Having graduated from Thames Valley University, London, Jin appears to have been born with a business mind, selling DVDs at weekend markets in London just one-month after he arrived at the age of 17.

Jin returned to China and took over his father's 10-year old clock company in 2005, when Jiuding was just an original equipment manufacturer (OEM) for clock replacements and clocks owned by international brands.

After working in the family company for more than two years, Jin realized that being an OEM was not the best future for the company so he dropped most of the OEM orders and started building Jiuding into a brand that could manufacture high-end clocks for the domestic market in 2008.

"I've successfully enabled 85 percent of our products to meet demand in the domestic market. Jiuding as a Chinese brand has now stepped on to the world stage, selling to the United States, Germany and certain Asian countries," said Jin.

Jiuding clocks feature original German mechanical movements combined with superior quality clock components in a solid wooden casing with a unique finish in a choice of colors.

Jiuding has more than 200 selling venues in China. It merged with a German clock brand as an acquisition and has legal ownership of brands from the US, Germany and Japan in the China market.

"My goal is to develop Jiuding from a single brand into a multi-branded company and from a manufacturing-based enterprise into a trading as well as service concentrated enterprise. Then I want to open an individual clock store of Jiuding products. That's my dream," said Jin.

Challenges

However, not every second-generation family business is as lucky as Huang and Jin, who have already tasted the fruits of harvest while a great many of their peers are still trying to take their family companies out of China.

"Given that the majority of second generation family businesspeople were born after 1980, they are not mature enough to apply what they learned abroad to the actual running of businesses quickly," said Yu, the professor from Shanghai Jiao Tong University.

Guan Yanqin, 27, is to take over the running of her father's pickle-making business in Meishan, Sichuan province, although she is young and not experienced enough to be a board member.

"I grew up in the plant and saw my parents working hard night and day.

"Their spirit certainly inspired me so I want to be in charge of the company and let them enjoy their retirement soon," said Guan.

Having graduated from London School of Economics in the UK with a master's degree, Guan started work at her parents' company after spending six months in Beijing working at an accounting firm.

During her five years of study in the UK, Guan successfully introduced the pickles made by her family business to local Chinese stores in her leisure time, persuading the stores to sell the products at discounted prices at the beginning.

"I started by visiting small grocery stores in Birmingham, where I studied for my bachelor's degree, and gradually expanded to Manchester and London," said Guan.

Guan is still trying to expand the pickle business out of Sichuan province and even China into other countries where Chinese people live.

"My pickle selling in the UK ended when I came back to China but I am planning to open some overseas offices and warehouses in Europe, the US and some Asian countries to promote our products properly," said Guan.

In the next decade, more second generations of family businesses will get ready to face the challenge. It will be a turning point for the real economy in China, which is mostly contributed to by massive privately owned family enterprises.

"Many small- and medium-sized enterprises will be operated by the younger generations soon after the fathers retire. It will be a new era for privately owned businesses in China," said Song Xiaohui, an officer with the Shanghai SME Development and Service Center.

Song added that the younger generations have the modern knowledge and great foresight to take their family businesses to the world with their open-minded strategies.