How did Hai-O get started?
After spending eight years and a month in detention (at the Batu Gajah, Muar as well as Taiping Prisons from February 1965 to March 1973) because of my socialist beliefs, I was jobless. It was difficult to get a job because of my background. There were no other alternatives. I don’t like business, to be frank, but I didn’t have a choice! Finally, a few of our friends gathered together and asked,‘Why not sell something from China?’
There were about 80 of us at that time, and we made a rule that the minimum start-up capital was RM1,000, and the maximum was RM5,000. Being socialists, no one was allowed to control or to dominate the company. Because we afford to pay that RM1,000 and we only managed to get RM168,000 amongst the 80 of us. Luckily, we had a lot of friends and supporters--as soon as we opened the door, business was quite good. It was an exciting time, and much better than we expected! We were living in Klang, and had quite a lot of friends there, so it made it easier for us to start our business there. When we first started, everyone didn’t get paid—we worked, cooked and ate together. (But) it was enough to survive—we broke even within the first year. This was in 1975, and this year (in May) , we’ll be 32 years old.
How did Hai-O grow from a shoplot in Klang to 53 outlets nationwide today?
From the beginning, we really wanted to expand. Every product that came in was from wholesales or local importers which gave us a 5% or 10% profit. After a year, after having learnt the trade, we figured we were in the position to act as a direct importer, as you can get 20% or 30% more profit. Then, of course, we needed more money, and we got some credit from a local company and a loan from the bank. We were turned down by many banks because of our history, and only one man was kind enough—he was a Christian, I believe, because whenever I went to see him, I was given Bibles! He was from Chung Kiaw Bank (now UOB) in Klang… He gave (a loan of ) a million in total—RM600,000 as a letter of credit and RM400,000 as a trust receipt.
What happened to the 80 people? Did they stay on in the company?
During the first year, 15 people heard rumours that the company would collapse and all the money would be gone. This was the group of people that were poor and weren’t highly educated –so RM1,000 or RM2,000 was quite a lot of money for them. They had no confidence and withdrew. Those that were capable enough took over their share. We didn’t treat this as just an occupation, we felt we could become something! And this helped us grow further. Until today, some of the ‘founder members’ are still here working with us—but at the same time, they’ll never show they’re the Tau Keh (laughs).
Many call you the ‘red entrepreneur’ due to your strong beliefs in socialism. Are these still incorporated into the company?
Well, when we first started, we had only one car that was shared among all of us. Now, we have a company car with a driver. I had insisted on not having a driver, but my management made me take the driver, otherwise I wouldn’t be allowed to drink anything alcoholic! It’s part of my job to do so since we’re selling products related to alcohol. But, I still sit next to the driver. I don’t sit at the back because I feel very uneasy.
In the company, of course, all of us are treated like family. At the beginning, the pay didn’t differ too much, but then we started using the merit system—they’re paid based on how well they do. Now, there’s not so much of a socialist structure anymore. Last time, we worked day and night, but now, with the younger generation, we have a fixed time.
With so many other brands in the market such as CNI and Eu Yan Sang, how do you compete and stay relevant?
Actually, our core business don’t clash with each other. They have their own line of business, and we have ours. Even though they sell the same thing,like health products, there’s a big range. But people compare us with them. Also, the market is so huge. People are health is now more important than wealth, and as people age, they would rather spend on health.
Our business is expanding, and so is theirs. We’re the best in selling made-in-China products. Even during the economic crisis during 1985 and 1997, our business still grew. We posted revenues of RM150 million for the financial year ending April 2006.
by-Joyce Au-Yong
(The Edge Malaysia, March 26, 2007)