"We mourn Mr. Li Wenda deeply and will take him as an example to start a business forever and never cap it."
On July 27, the official website of Lee Kum Kee Group released an obituary, and on July 26, 2021, Mr. Lee Wen Tat, Chairman of Lee Kum Kee Group, passed away peacefully accompanied by his family at the age of 91.
In the obituary, the Lee Kum Kee family introduced: Mr. Lee Man Tat's lifelong foresight, innovation and change, successfully led Lee Kum Kee from Hong Kong to the world, so that the century-old brand revitalized, becoming an internationally renowned sauce and condiment brand.
Admittedly, Lee WenDa is a "legend" in both the century-old Lee Kum Kee and the Chinese food industry.
From oyster sauce workshops to centuries-old family businesses
Li Wenda, whose ancestral home is Xinhui, Guangdong, is the third generation of Lee Kum Kee. Lee Kum Kee was founded by Lee Man Tak's grandfather Lee Kum Heung.
The story of this century-old enterprise begins in a small fishing village in Guangdong. According to records, in 1888, the Li family opened a tea house in Nanshui Town, Zhuhai, Guangdong Province. One day, Lee Kum-hee forgot to turn off the fire while cooking oysters, and the oyster sauce was boiled into a dark brown juice. After tasting it, the sauce tasted surprisingly good, and Lee decided to make it into production. Lee Kum Kee's later oyster sauce sign was created.
Born in a chaotic world, It is not easy to maintain the inheritance of Lee Kum Kee for more than a hundred years. In 1902, Lee Kum-shing moved his family to Macau, China. In 1920, a second-generation member, Lee Siu Nam, took over and in 1932 moved Lee Kum Kee to Hong Kong, China. At that time, Lee Kum Kee was just an ordinary family workshop.
With the help of overseas Chinese merchants traveling to and from Hong Kong, Lee Siu Nam sold Lee Kum Kee to the Chinese circles in Southeast Asia and North America, and gradually made Lee Kum Kee bigger. But the key person who really pushed Lee Kum Kee into the global market and built it into a modern enterprise is Lee Wen Tak.
"Dare to be the first" is one of the evaluations of him in the industry. At that time, after becoming familiar with the company's business, he personally carried out the transformation of Lee Kum Kee's trademark and packaging for more than half a century. Since then, he has riveted enough to lay out overseas markets, established production bases in the United States, Malaysia and other places, and took the lead in introducing modern automatic production equipment. He also established a series of management systems and control systems, transforming Lee Kum Kee into a modern company and tearing off the label of "small workshop".
Oyster sauce now enters the homes of ordinary people, but also thanks to Li Wenda's "dare to be the first". In the past, a hundred pounds of oyster sauce boiled into about two pounds of oyster sauce, and the price was not cheap. Li Wenda once broke his finger to calculate the account at that time, "Ordinary workers earn ten Hong Kong dollars a month, that is, five bottles of oyster sauce, which is really expensive." ”
In 1972, Lee Wen Da took full charge of Lee Kum Kee. This year coincided with the visit of nixon, then US President, to China, and China presented two pandas to the United States as a national gift. Li Wenda smelled the business opportunities, took advantage of the boom to launch the "Panda Brand Oyster Sauce", and also tried to defy the public opinion, positioning it as a parity model, so that it can be fully rolled out in overseas markets. Subsequently, "affordable oyster sauce" became Lee Kum Kee's product strategy, and the price was continuously reduced with the help of local production of Chinese mainland.
When sharing Lee Kum Kee's experience with the outside world, Lee WenDa once concluded that Lee Kum Kee has come to this day mainly thanks to the concept and practice of "always starting a business". "We know that in a changing world, there is nothing that can be 'kept'. Only by starting a business forever can we maintain healthy and sustainable development. ”
He said that the entry threshold of traditional condiments is very low, there are many people who make them, the competition is fierce, and it is not easy to become bigger. In the history of Lee Kum Kee's development, for a long time it has been a single product and a single market, so there is no possibility of rising. Therefore, to start a business forever is to constantly innovate: innovation in products, innovation in packaging, innovation in the market, innovation in management concepts.
Lee Man Tat's third son, Lee Kum Kee Sauce Group Chairman Lee Wai Chung, also said, "In Lee Kum Kee, there is no business, only continuous entrepreneurship. ”
It is precisely in this way that Lee Kum Kee, who bears the aura of "Oyster Sauce Inventor", did not rest on his laurels, and has innovated and launched classic products such as Lee Kum Kee steamed fish sauce, Lee Kum Kee XO sauce, and Lee Kum Kee soy sauce chicken juice. Around the soy sauce, Lee Kum Kee has also developed a series of products, including selected soy sauce, straw mushroom old soy sauce, steamed fish drum oil and so on.
"While inheriting, Lee Kum Kee maintains the spirit of eternal entrepreneurship, and on the basis of adhering to 100% quality, constantly creates more flavor-oriented products around changes in market consumption to meet people's various taste needs." Li Huizhong said.
Business empire and two missions
Lee Kum Kee, who has never been listed on the capital market, has never officially disclosed the actual operating performance of its business, but as early as 10 years ago, Lee Wenda revealed in an interview that the total annual turnover of the group's two major businesses of sauce and health products has exceeded 10 billion yuan.
Previously, the industry estimated that the annual sales scale of Lee Kum Kee in 2019 was about 70 billion yuan. Haitian Flavor Industry, which is known as "Sauce Mao" in the A-share market, had revenue of 19.797 billion yuan and 22.792 billion yuan in 2019 and 2020, respectively, and as of July 28, the market value exceeded 470 billion yuan.
According to Bloomberg's previous ranking of the top 20 wealthy families in Asia in 2020, the Lee family of lee kum kee group has a wealth of US$17.3 billion, ranking 12th. On the 2021 Forbes Global Rich List, Li Wenda ranked 111th with a value of US$17.4 billion and the sixth richest man in Hong Kong.
With more than 200 products and more than 100 countries and regions around the world, Lee Kum Kee was once known as the "Sauce Kingdom". Even the early slogan of Lee Kum Kee, "Where there are Chinese, there is Lee Kum Kee", has become "Where there are people, there is Lee Kum Kee". With Lee Kum Kee being selected as a space food, "there are lee kum kee where there is no one".
Lee Man Tak has repeatedly pointed out that lee kum kee group has two missions, and Lee Kum Kee has completed the first mission to spread traditional Chinese food culture to the world through sauces. Lee Kum Kee's second mission is to spread Chinese herbal health products to the world.
In addition to the sauce business, Health has become another important family brand of Lee Kum Kee Group. According to the information, Lee Kum Kee Health Products Group was founded by the Lee Kum Kee family in 1992 and operates diversified businesses, including Chinese herbal health products, chinese herbal medicine cultivation and sales, property investment, and venture capital for start-ups. At present, the members of the Group include: Infinitus (China) Limited, Infinitus (Hong Kong) Limited, Infinitus International Limited, etc.
Lee Wai Sen is the founder and chairman of Infinitus (China) Limited, the fourth generation of Lee Kum Kee and the fourth son of Lee Man Tat. In his hands, Lee Kum Kee, who makes sauces, completes the cross-border from "condiments" to "health products".
According to the information on the official website, Infinitus (China) Co., Ltd. is a modern large-scale enterprise based on the health and wellness industry, focusing on the research and development, production, sales and service of Chinese herbal health products, with 30 branches, 30 service centers and more than 7,000 stores in Chinese mainland.
Li Huisen introduced in the chairman's message that there are data that show that in 2019, the scale of China's health care industry has exceeded 3 trillion yuan, and it is expected that by 2030, the scale of China's health industry will reach 16 trillion yuan, and the health care industry will usher in a period of rapid development. For Infinitus, which is based on the main track of "health and wellness", the future market space is broader, there are more opportunities, but the responsibility is also greater.
"Committed to promoting China's excellent health culture and helping more people create a balanced, prosperous and harmonious healthy life, this is not only our mission, but also the value and significance of Infinitus' existence." Lee Said.
How does the family legend continue?
Throughout his life, Li Wenda pursued the concept of "Si Li and People". "Self-cultivation is passed down from generation to generation, and the work is only for the benefit of the people." Lee Man Tak received a calligraphy painting from a friend in his early years, and he took this poem seriously and made it the aim of the entire Lee Kum Kee Group.
"Whether it is to do things, do a good job in the family or run a business, you need to 'think of profits and people', that is to say, as long as you want to make profits, you must first stand in the other side's position for the sake of the other party, so that it can be long-lasting." Li Wenda once interpreted the connotation of these four words in this way.
The quality of the product is an important answer sheet that he handed over to the outside world. Everyone who walks into Lee Kum Kee's factory can see a slogan like this: "100-1=0". This is intended to warn the operator that as long as one of a hundred steps goes wrong, it is equivalent to doing it for nothing, so each link must be in place.
In addition, for Li Wenda, the most important thing in doing business is to "never let customers suffer losses". In the early years, there was an American dealer who gave advice on the taste of a batch of oyster sauce, although it was not a quality problem, Li Wenda also immediately took back this batch of goods, replaced by a batch of new goods sent to dealers, this transaction alone cost a lot of freight, but Li Wenda believes that word of mouth is more important than making money.
Lee Kum Kee has never had Lee Wen Tak since then, but Lee Kum Kee's family legacy has not ended. Regarding family management, Lee Kum Kee and Lee Wen Da himself have a strict set of rules.
In 2002, Lee Wen Da formulated Lee Kum Kee's "Family Constitution" and formed a family council of himself, his wife and five children. This may be the secret weapon that Li Jin remembers to break the curse of "three generations of wealth".
Lee Kum Kee has experienced two separations. In 1972, when Lee Wen Da had just taken over Lee Kum Kee, his two uncles wanted to give up business. Li Wenda had to spend all his savings on a huge debt to buy shares. 14 years later, Li Wenda clashed with his younger brother Li Wenle for his different views on the company, and eventually Li Wenda also bought back the full amount of equity from his brother.
"These two separations have stimulated me a lot. I think things like this happen in other family businesses as well. Later, I came up with a solution, which was to set up a family committee. Now Lee Kum Kee's family committee has seven members, me, my wife and our five children. Every three months, people meet to communicate with each other and reach consensus to ensure that they work together for Lee Kum Kee's cause. In 2013, Li Wenda said in an interview with the media.
According to Li Wenda, the family committee stipulates three "no"--no late marriage, no divorce, and no extramarital affairs. If someone violates the rules, they automatically withdraw from the board.
In addition, according to public reports, Lee Kum Kee's family committee also stipulates: insisting on family control, only family members with blood relations can hold shares in the company; the chairman of the group must be a family member, and the CEO can be hired; the next generation entering the family business must meet the conditions of at least graduating from university, working in an external company for at least 3 to 5 years, and starting from the grassroots level.
It is understood that at present, the fourth generation and even the fifth generation of the Li family have entered the company's industry. It is reported that at present, the chairman of Lee Kum Kee Group is succeeded by Lee Man Tat's third son, Lee Hye-chung.
It is worth mentioning that Lee Hye-chung once mentioned that the fifth generation of the family may not be able to be the successor of Lee Kum Kee. If there is no suitable person, the business may also be run by an off-family CEO, with family members remaining in control.
Zhongxin Jingwei client noted that on December 1, 2020, Lee Kum Kee announced that it would appoint Lin Bibao as the chief executive officer of Lee Kum Kee Sauce Group. According to the information, Lin Bibao was an auditor at KPMG in his early years, then joined PepsiCo China, and finally held the position of Chairman of Greater China. It is understood that this is the first time that Lee Kum Kee has appointed an independent chief executive officer to its sauce group, which has been concurrently held by Lee Hye-chung before.
However, China's condiment market is fiercely competitive, and Lee Kum Kee is not alone. Haitian Flavor Industry, known as "Sauce Mao", is not only among the best in the oyster sauce and steamed fish sauce track, but also sits firmly in the position of "Soy Sauce King"; competitors such as Qianhe Flavor Industry, Tianwei Food, and Zhongju High-tech should not be underestimated.
According to Dongguan Securities Research Report, in 2020, Haitian Flavor ranked first in China's condiment retail market share, and Li Kum Kee ranked third. At the same time, the research report mentioned that from 2014 to 2020, the market size of China's condiment industry increased from 259.5 billion yuan to 395 billion yuan, with an average annual compound growth rate of 7.25%. Euromonitor estimates that by 2025, the size of China's condiment retail market will reach 186.7 billion yuan. According to the proportion of retail in the condiment industry in recent years, assuming that the proportion of retail in 2025 is 35%, the market size of the condiment industry will reach about 533.4 billion yuan in 2025.
Under the market scale of 500 billion yuan, whether Lee Kum Kee can always be in the forefront of the fierce competition is a question for Lee Hye-chung and the new CEO to consider.
Chinese food industry analyst Zhu Danpeng told the client that Li Wenda's death will not have much impact on Lee Kum Kee, "His descendants have taken over different business sectors, and the overall operation is still relatively smooth at present, whether it is the development of the sauce group or the development of Infinitus, the overall is still very benign." ”
Lee Wen Tak once mentioned in the Lee Kum Kee 130th anniversary propaganda film that Lee Kum Kee can break through 130 years, relying on the hard work of each generation. "Our ambition is to extend this family business endlessly beyond the millennium." Li Wenda said.
This article originated from Zhongxin Jingwei
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