At 61, Ge Wenyao is still very fashionable. As the chairman of Shanghai Jahwa United Co., Ltd. (SH.600315), he’s sometimes called “Old Ge” or even “Old Master Ge” by company staff. He still likes wearing light-brown spectacle frames-as his generation usually does-but his glasses have evolved over time, from big, traditional, dark brown plastic frames to today’s small, trendy, colourful frames.
He also requires his whole company to be fashionable. The company office building has recently been renovated into a “creative centre” with three tea/coffee bars. Ge believes that a fashionable office for his staff is the basis of any fashion business. “We need more brainstorming,” he says.
Ge is by nature an adventurous personality and he admits people like him usually like making waves. In his 23 years of leading the company, Ge has turned around and rejuvenated Shanghai Jahwa several times. Ge still refuses to accept failure, and is always looking for new opportunities-not unlike many entrepreneurs in Shanghai.
One of Jahwa’s competitors, a particular multinational company, apparently started looking into Ge’s situation when he turned 60 last year. The competitor was inquiring about the government’s rules on retirement ages and how they would apply to Ge. A mandatory retirement could have a big impact on the future of Shanghai Jahwa.
But Ge doesn’t want his eventual retirement to stunt the development of Jahwa. “He is very anxious now and he wants to put the management team and Jahwa on the right track before his retirement,” explains a senior manager at Jahwa.
Ge is now designing a giant project for the future of Jahwa. At the end of last year, Shanghai Jahwa decided to upgrade itself into a fashion business. It also submitted a proposal for building a fashion industry to the government, detailing the necessity for Shanghai to be transformed into the fashion capital of China and the willingness of Shanghai Jahwa to pioneer the transformation.
For Shanghai Jahwa, it is no easy task to upgrade from a household chemicals company to a fashion business simply by changing its title. The mission will require a massive reform, and it’s a dream that Chinese enterprises have never before attempted. Ge is fast-tracking efforts to set up a platform in an attempt to lead China’s fashion industry over the next few years.
To attract and retain talent, Shanghai Jahwa’s equity motivation scheme was approved earlier this year; and salaries for key employees will also be increased dramatically. Ge has promised that the salaries of Jahwa employees will be on par with those offered by multinationals.
“Jahwa is now facing a precious opportunity for development,” says Ge, and he doesn’t want the opportunity to slip away.
The Smell of Fashion
It was a big accomplishment for Ge to snatch back Cortry from foreigners. On March 20th, Shanghai Jahwa announced that it would increase its own capital and purchase 51% of the controlling shares of Sichuan Cortry Cosmetics Co., Ltd. for RMB65.21 million (US$9.4 million). It was the first merge in seven years for Shanghai Jahwa since being listing on the stock market. And the acquisition between Chinese household chemicals companies is considered rare.
As a renowned facial mask and skin care company in China, Sichuan Cortry now owns two trademarks: Cortry and Leenchie. Cortry was the first Chinese brand facial mask product, and used to be a top domestic brand. Cortry has since been bumped to No.2 in terms of market share in China, only second to P&G’s Olay. Its annual turnover is about RMB100 million (US$14 million).
Recently, Cortry has been looking for business partners. There were lots of interests, but Cortry founder Ma Jun finally settled on Shanghai Jahwa.
“We hope to achieve an annual turnover of RMB300 million (US$43 million) for Cortry in two or three years,” says Ge. Taking on Cortry is not just a way to gain a new product line and improve Jahwa’s competitiveness against the multinationals; it’s also a key step in the strategy of upgrading to a fashion business. Cortry and Jahwa’s Herborist brand can complement each other nicely in terms of R&D on Chinese medicinal herbs and marketing channels.