Frank Wang (pictured, below), 32, founder and CEO of LuxSea, on luxury, entrepreneurship and why China could be the new Japan.
My family business is in the energy sector. My grandfather was the founder of Huaneng Group, which is one of the biggest electricity generating companies in Asia. It was the first Chinese company to go public on the NYSE and is in the Fortune 500.
My father also works in the business, although now he concentrates on the new energy sector. Last year I started working in the business a bit – I am helping them in Indonesia, Cambodia and the South China region. I think I might end up doing quite a lot with the business in the future.
I studied in California. My major was computer science and business combined together, and I wanted a career in a high-tech company. In 1999 I founded an e-commerce business there, called GreatDog.com, selling electrical products online. I was based in Silicon Valley and everybody was working in start-ups. All my friends were saying: “I’ve got a job in this start-up called Google, or eBay.” Really, though, my entrepreneurial spirit came not from California, but from seeing my grandfather set up Huaneng when I was growing up with my grandparents in Shanghai.
I closed down GreatDog in 2004 and then went to work for JP Morgan. They assigned me to Hong Kong and in 2007 I left that job and did my MBA at CEIBS in Shanghai. While I was researching for an internship at LVMH I got the idea for LuxSea. China had a fast-growing economy and had some very strong overseas luxury brands like Louis Vuitton and Gucci, and lots of low-end bands like H&M, Uniqlo and Zara, but there is a big gap between the two sectors.
Lots of these smaller, mid-range brands don’t have the teams to come and work here, so I said to them: “If you want to come to China then I can be your representative and be your partner here”. They authorised us to sell their products, and when we had those arrangements we went and talked to shopping centres and said: “We have dozens of brands, do you want to do something new, we can quickly open up stores”.
We are currently distributing Rebecca Minkoff, CC SKYE, Amrita Singh and others, and we’ve signed deals to introduce many other brands to China soon. We started off with handbags and accessories, and we’ll add shoes and clothing in 2013. We started the business on-line and we have six online stores and three online outlets as well as three physical stores, two in Shanghai and one in Changzhou.
In the first half of 2013 we’re opening stores in Beijing, Taipei and Nanjing, and hopefully another in Shanghai. We’re also in talks about franchised stores. We had $2 million in sales last year and we are hoping to triple that in 2012.
There are still lots of opportunities in China, but most Chinese businesspeople are looking for opportunities elsewhere. My business partners look at China and they see a fast-growing economy and a stable government and they think that they can do business here. But in my family, for instance, most people are US, Canadian or Australian citizens. China changed presidents in November and nobody knows what will happen in the next 10 years.
There is a lot of uncertainty and people worry that some big event might occur, just like it has many times in the past 50 years in China. Look at the recent territorial dispute between China and Japan – I drive a Japanese car and I couldn’t go out in it. People seemed to think that if you bought Japanese products you were a bad person. This shows that even a little event can cause a massive problem and it seems there is not a lot anyone can do about it.
Americans worry about China taking their jobs, but I think China could end up like Japan. In the States 15 or 20 years ago they worried about Japan buying everything, and they are scared that China will do the same. But Chinese manufacturers are shipping factories abroad: one Chinese wage is 10 times a Vietnamese or Indonesian wage. People are selling their factories and re-investing elsewhere. It’s nearly impossible for China to replace the US as the primary power in the world.