LUXASIA IS NOT JUST A PRETTY FACE, AS FOUNDER PATRICK CHONG SETS THE WHEELS IN MOTION FOR A TRANSFORMATIVE CHANGE INSIDE OUT.
LUXASIA IS NOT JUST A PRETTY FACE, AS FOUNDER PATRICK CHONG SETS THE WHEELS IN MOTION FOR A TRANSFORMATIVE CHANGE INSIDE OUT.
If a book can be a key to unknown chambers within the castle of one’s self, then the apps on the first page of a smartphone is probably telling of its owner’s personality too.
As one would expect of a chief executive’s device, there are the usual app suspects of news agencies, e-mail, calendar and the stock exchange on Patrick Chong’s iPhone 6. But a closer inspection discloses a deep appetite for connectivity. There are six messaging apps, including Wechat, Skype, Line and Tango (Whatsapp has its special place in the bottom dock). Whereas most business leaders stay away from social media citing privacy concerns, the head honcho of Luxasia has Twitter, Facebook, Instagram and Linkedin. Since he’s in the retail business, apps like Aveda (which Luxasia distributes), courier service Zyllem and code scanner QR Reader help to keep him in the know. Apps are also categorised in folders, which are titled with emoticons such as the newspaper for news apps, a telephone for messaging apps and an aeroplane for travel apps.
His daughter, Sabrina, says: “He’s always the one who goes, why are you not using this app or that? Check out this new thing I have on my phone.”
Chong tells The Peak: “I’m not a digital native. I’m curious and I want to know as much about technology as I can.” He has no qualms letting on that he downloaded a popular dating app “just to see what the fuss was about”. The day before this interview, he was tinkering with Golfshot, which would supposedly help him with his handicap of 23.
“He’s the early adopter, in tech terms,” son Alwyn, who prefers to wait for updated versions, chimes in. Chong was the one who introduced traffic and navigation app Waze to his children.
Chong says: “I’m a big fan of tech and what it can do. Technology is an enabler. It can make life so much more fun and efficient.”
Clearly, this baby boomer is no technophobe resistant to change. Because if that stereotype held true, the founder and CEO of Luxasia Group, who fell into the beauty business “accidentally”, wouldn’t have stayed on top of his game for the last 30 years. Just as beauty junkies seek the latest colours and skincare formulas, Chong is a proponent of modernising his business in the face of an evolving marketplace. Besides overhauling its computer and data systems six years ago, Luxasia is committed to sending its over 2,200 staff for regular training programmes. “We saw the benefit of using video conferencing to save time, travel costs, improve communication and be more effective. Simultaneously, we saw the need to use technology to have real time information/data available, thereby managing our business more efficiently across the region.
“This has now created one platform for us to scale up our operations seamlessly while controlling costs, inventory and management information systems better. If we hadn’t implemented these changes, we wouldn’t be in a position today to turn current challenges into opportunities. We are at important crossroads. Preparing for the future is an obsession.”
1986
YEAR LUXASIA WAS FOUNDED
> 2,200
NUMBER OF LUXASIA STAFF
$1
ALWYN’S DAILY WAGES AT AGE 9
120
NUMBER OF BRANDS LUXASIA DISTRIBUTES
17
AGE WHEN ALWYN HAD TO SACK A PEER
9
AGE WHEN ALWYN FIRST STARTED WORK AT LUXASIA
11
NUMBER OF TERRITORIES IT OPERATES IN
$2
MILLION AMOUNT LUXASIA CO-FUNDED START-UP VANITEE
BEAUTY BOUNTY
Luxasia is tackling the volatile retail climate head on. While others have shuttered or downsized operations, Luxasia expanded its brick and mortar multi-label skincare and fragrances store Escentials, which is headed by Alwyn, last December. From 1,500 sq ft, the Paragon store now covers 2,300 sq ft to include a vanity zone where shoppers can try on the latest makeup in front of large mirrors. To keep the intrigue, it will introduce new brands every month, such as Damselfly candles from Australia, Stockholm labels Byredo and Verso, and the French perfume house Dear Rose, in addition to the current stable of exclusive premium cult skincare and fragrance brands such as Eve Lom, Diptyque, Serge Lutens and Annick Goutal. Concurrently, the Escentials website is being revamped to become an e-commerce site that will feature an e-magazine with beauty and lifestyle content – a la luxury fashion and lifestyle online purveyor Net-a-porter.
“The only way forward is to have a relationship where consumers trust the retailer for recommendations,” says Chong. “Education is important for the consumer so he can make informed choices. I think he will be more grateful with the information provided for him to make that informed choice.”
Luxasia distributes 120 brands in 11 territories including Indonesia, Thailand, the Philippines, Taiwan, Hong Kong, China, India, Vietnam and Myanmar. It rang in RM772 million (S$258 million) in sales in 2013, reported Malaysian newspaper The Star. Expansion to Japan, South Korea and Australia is in the pipeline.
“The constant question is, how do you promote products? That’s what’s most exciting about the business and that’s what has kept me in the business. Doing more of the same is not an option.
“With digitalisation, there is less brand loyalty. But customer experience is still very important. We are very strong in our offline business – that is our competitive edge, and we should lev-erage on that. Nothing beats trying out the real thing for yourself. But we also need to build the virtual business – that’s where we need the right talent so the consumer can be served both offline and online.”
Which is why Luxasia co-invested $2 million in home-grown beauty appointment-booking app Vanitee in July last year. “It’s a concierge business that’s related to ours. We don’t run it; we encourage our business partners (like LVMH, Coty, Elizabeth Arden and Yves Rocher) to use Vanitee,” says Alwyn, who, together with sister Sabrina, brought the start-up to Chong’s attention. Sixteen-month-old Vanitee has a network of over 550 verified independent beauty artists, who have since served over 4,700 customers.
NOT JUST A PRETTY FACE
But more than being a complementary service, what impressed Chong most about Vanitee was its founders and their “can-do” attitude. “They are constantly innovating and opening new markets.
“I’ve learnt lots from the new generation, including my children. It’s through my interaction with them that I realise we need to reposition the company. The future is not what I may be comfortable and familiar with. Then I begin to see – I have to embrace change. There is no other way about it.”
While Asian parents are said to be less open-minded and slow to praise their off spring, it’s not the case with Chong. While filming a video segment for The Peak, he sought his children’s opinion on answering questions posed, instead of making the executive decision. You also see the quiet pride in his eyes as he brings to attention Alwyn’s success with Escentials, a concept store that the latter developed 14 years ago when he joined Luxasia as a marketing executive, as well as having made inroads into the tough China market – he was based in Shanghai for six years. And without Sabrina at the helm of the supporting functions in the group, “we wouldn’t have a business that would be sustainable in the long term”.
And of course, the entrepreneurial spirit in this new generation of start-ups reminds him of himself.
He stumbled onto the beauty scene 40 years ago, after then-employer British company Inchcape posted him to its fragrances and cosmetics department, instead of the wines and spirits sector he had requested. “I was apprehensive because I didn’t know if it was the right business for me,” recalls Chong, whose original aspiration was to be a pilot but changed his mind because the pay wasn’t attractive. “I can put my hand over my heart and say that I couldn’t have joined a better industry. Resources were limited and that forced me to be creative when it came to building partnerships.” To address an infrastructure gap that Inchcape couldn’t plug then, Chong set up Luxasia in 1986 to serve the Singapore, Malaysia, Indonesia and Philippine markets.
“When we go to new markets, we always try to hire locals because they know the markets better than us. But how do you attract the right person? Does he have the passion and is he up to challenges? To build and sustain the business, it has always been about attracting and retaining the right talent. People should stay or come to us because we offer a fair deal.” By that, he is referring to a conducive environment for creativity, allowing staff to run the business as their own, while remunerating them at market rate with appropriate recognition and incentives to inspire their best performance.
That includes finding his successor. Privately held Luxasia may be a family business, but Chong makes no bones about finding the best qualified person as the next leader – which may not be his children. Bangkok-based Alwyn oversees Luxasia’s China, Thailand and Philippine markets, while former corporate lawyer Sabrina joined four years ago and is group head of corporate development. Chong’s younger daughter is a doctor.
“NOT SURE WHAT HE THOUGHT I COULD DO WITH IT.” – ALWYN ON BEING PAID WITH A GOLD STICKER AS A CHILD.
TESTING GROUND
To enhance customer experience, the revamped Escentials store at Paragon now includes a vanity corner where shoppers can try out products.
AT FACE VALUE
“It’s vital to separate ownership from management,” Chong says. “We need to plan for succession. If the right talent happens to be from the family – great. But the family must be far-sighted and open to finding someone from outside.
“(Alwyn and Sabrina) have indicated they are not ready to be in the driver’s seat, which is okay with me. But I ask myself if I will be working for the next five, 10 years; I would like to do different things and have a different pace of life, even though I love the business. In the meantime, we’re happy to find someone who can help us, not just to lead but to find new skills, new talent, new knowledge to help us get to the next level. Having a deep talent bench is always better for the long term. The point is building an enduring legacy that we can be proud of.”
For Alwyn and Sabrina, it has always been about how they can value add to the group. She says: “Making a personal mark is secondary. The focus has always been about building a sustainable business.”
While the search continues, Chong already has plans post-Luxasia. He is toying with the idea of setting up an active living village in Desaru, Malaysia, for those above 50 who can take up short term leases for a holiday home. Then there’s his organic farm in Plentong, Malaysia. “I like nature very much. These projects must be borne out of passion; they are a labour of love, not for pure profit. These plans have been on the back-burner because, for now, the business comes first.”
