Henry Sy, Sr. is the richest man in the Philippines, according to Forbes Magazine on their 2013 survey. His net worth is $9.1 billion in 2012 to $13.2 billion in 2013, thus making him the 68th wealthiest person in the world. Henry Sy, Sr. is known for his legacy in retail merchandising and establishing all around the country the chain of SM Department Stores, SM Supermarkets, SM Mall of Asia, SM Megamall, the glamorous SM Aura Premier and more. But among Filipinos, Henry Sy, Sr. is more than a figure of prosperity and hard work. He is also a symbol of national pride and source of inspiration to anyone who wants to be successful in life.
Shares of his holding firm, SM Investments,
is considered the country’s most valuable company. Henry Sy, Sr. is also the chairman of SM Foundation, Inc. who dedicates its projects in charitable works in providing education for underprivileged Filipinos.
It has always fascinated not only Filipinos but also foreign business people in learning more about Henry Sy, Sr.’s business strategies and his inspirational life story. Anywhere you go, there is an SM store nearby with majestic facades of lights, fountains, artistic building design and the famous “SM” logo. Although his stores are very modern and vibrant, every Filipino knows that the giant business empire of SM stores has a humble beginning.
Simplicity and Common Sense
Henry Sy, Sr. was born on 25th of December 1924 at Xiamen, China. He is a Chinese-Filipino. At age 12, his family settled in the Philippines. At that young age, he worked in a small retail store (called “sari-sari” store) owned by his father where they sell anything from food to basic items. He worked 12 hours each day to help his father. Back then, the store was located at Echague Street, now named Carlos Palanca Sr. Street in Quiapo, Manila.
Early on, Henry Sy’s business strategy was nothing fancy but brilliant. He wanted to find ways to earn more in that setup, thus he came up with the concept of selling items in small portions. It was a practical and fast way to sell products. This concept resembles the small packs or products in sachets we now see in supermarkets or small “sari-sari” stores. Most of his childhood revolved around selling in his father’s store rather than enjoying his childhood. Unfortunately, during World War II their store was destroyed. This event in his early years did not stop him from being business-minded and optimistic. He got involved in buying and selling anything of worth in order for his family to survive. Sometimes it is during difficult times that we shine our best and we learn the true meaning of perseverance and optimism. Experience is also a great teacher.
One time, he was unfortunately hit by a shrapnel while selling. It was a good thing his friend, who was a pushcart vendor, saved him and brought him to the hospital. Because of this near-death experience, he valued that friendship. After the war, he made this friend his partner in a shoe business.
When the war ended (1945), he got involved with selling imported American shoes from business-minded American GI soldiers. This inspired him to open a shoe store with his friend. Eventually, he was managing three shoe stores with his business partner.
Meanwhile, as a student in FEU (Far Eastern University, Manila) and a family man at the same time in the early ’50s, he studied the market of his chosen industry. Henry Sy, Sr. wanted to find innovative ways to improve his trade. Therefore he went to the US at the East Coast and found ideas and inspiration that he needed in selling shoes and other leather goods, thus the birth of a store called “Shoe Mart” or “SM”. “Shoe Mart” which was the first air-conditioned shoe store. This store was successful and thus more stores were opened.
His problem that time was lack of adequate supply of products to meet the growing demand of customers. This problem lead him to focus on selling apparels and other products with the help of his mother.
What is admirable about his approach to business was his common sense and open-mindedness. He takes time to listen to customers, suppliers and employees and then he learns from people’s opinions. Using this gathered information from different people and being observant of market trends, he was later inspired to start a department store chain.
The first department store was launched in 1972. At that time, it was Martial Law in the country and this presented a lot of business obstacles for him as it was a time of political and social chaos and economic decline. But obstacles and limitations did not stop Henry Sy, Sr. from pursuing his passion to expand his business. Despite the situation during Martial Law period, he continued to open more department stores in the country. This, however, presented the problem of getting the space needed for the business.
As contingency plan, he had been considering a long-term goal of investing in properties for malls. To simplify it, rather than being a tenant of a space for a shop, there would be less problems if one would own the space itself where one’s shop is located. Further on, perhaps if one’s property is big enough, it can expand into offering rent space for other independent stores. The concept was simple and practical.
In 1983, there were more obstacles like the economic crisis that got worse after the assassination of Ninoy Aquino. At that year, the first mall began its construction. It seems like a bad year to start big projects as many investors and bankers were skeptical to join or finance his projects. Once more, Henry Sy, Sr.’s optimism and determination remained his weapon and shield during hard times. In 1985, a new department store and supermarket were launched. It was on the same year when his company had to face labor problems and union strikes. This tested his optimism and determination further. He had many reasons to give up on his venture but moral support from family, good employees and customers were there to keep him strong.
Further on, he continued his plans for business expansion with the construction of SM Sta. Mesa and SM Megamall. The plans were big and optimism was great but every step was slow and difficult. There were many factors that brought about construction delays like lack of supply of cement and the 1989 coup in Makati.
Despite all these opposing factors, SM City Sta. Mesa opened on the 28th of September 1990. It has 200 shops and restaurants and became a new social venue at Sta. Mesa, Manila.
SM Megamall, located at the Ortigas Center, opened its main building on the 28th of June 1991. The Mega Atrium of SM Megamall opened on 28th of October 2008 and the new Carpark C on 11th of October 2011. SM Megamall is one of the largest SM Supermalls created by SM Prime Holdings, the largest mall operator in the Philippines owned by Henry Sy, Sr. SM Megamall is a huge shopping mall originally with two buildings (Building A and B, but now expanding with Building C and Carpark D). Land area is around 21 hectares with 750 shops and 250 dining establishments. It has a maximum capacity of 4 million people.
But going back to Henry Sy, Sr.’s life story, his daughter Teresita Sy-Coson narrates,
“When the 1997 Asian crisis came, we were planning our mall expansion, including the Mall of Asia, which was then envisioned to be the biggest mall in the region.
Because my dad felt the tsunami-like effects of the region wide crisis, which was unlike any other he had experienced, we had to change plans. We deferred opening the Mall of Asia, and went on with the opening of other malls.
We grew in numbers instead of size, serving different smaller markets. We have also expanded our retail business beyond department stores to include supermarkets, hardware stores, appliance superstores and other retail formats.”
Joining the Banking Industry
Henry Sy, Sr. also joined the banking industry. He owns a bank called “Banco de Oro” which started as a medium-sized bank but very stable. Being a medium-sized bank with a conservative business principle was an advantage as it prevented them from being victimised by bad loans during the economic instability at that time.
Eventually, he and his group decided to be courageous with their banking strategy. Sometimes taking bold steps and taking risks are ways for a business to grow, thus a new and improved BDO around year 2000.
“Encouraged by the consolidation program of Central Bank of the Philippines in making Philippine banks more competitive relative to the region, Banco De Oro made few acquisitions because of the moratorium on banking. It acquired the Dao Heng Philippines branch, the First eBank, the Banco Santander Philippines branch, the United Overseas Bank branches and most recently – Equitable PCI Bank,” according to Teresita Sy-Coson.
She further explains her father’s banking principle, “Opportunity is where you find it, not where it finds you. Crisis and weakness indicate one can look for opportunities. Transforming problems into opportunities can bring good returns. Prosperity and growth come only to a business that systematically exploits its potentials and systematically optimizes its performances.
Our business – especially that of shopping centres is a long term business. It takes at least eight years to pay back. We feel that the country will always be around, and with Filipinos’ love for shopping, there will always be customers we can sell to.”
Today BDO Unibank, Inc. (Banco de Oro or BDO) is one the largest banks in the Philippines. This is owned by SM Group of Companies, one of the country’s largest conglomerates owned by Henry Sy, Sr.
Taking One Step At A Time for Giant Dreams
On the 21st of May 2006, SM Mall of Asia was opened. It is located at the Bay City, Pasay near SM Central Business Park and the Manila Bay. This is the second largest mall in the Philippines (SM City North EDSA as the 1st), the 3rd largest shopping mall in Asia, and considered the 4th largest shopping mall in the world. Land area is around 42 hectares.
On the 17th of May 2013, the newest, the most elegant and the most exciting shopping center of SM Prime Holdings was opened. The shop is called “SM Aura Premier” located at Bonifacio Global City, Fort Bonifacio, Taguig City, along McKinley Parkway and C5 Road. It has a floor area of 249,861 square meters.
As of today, SM Aura Premier has 388 stores. This mall has a multi-level green roof (designed for environmental advantages) called the “SkyPark”. Other features include the fresco bars, restaurants, sculpture and botanical gardens, a performance hall with 1,100 seats (Samsung Hall) and a 250-seat chapel named after the newly canonised Filipino saint, St. Pedro Calungsod.
SM Aura got its name from the elements Au (gold) and Ra (radium), related with good luck and prosperity in Chinese feng shui and numerology. Elemental gold has an atomic number of 79, while radium’s atomic number is 88. According to Hans Sy, the numbers 7, 8 and 9 are good luck numbers. Hans Sy is the second son of Henry Sy, Sr. and First Executive Vice President of SM Investment Corporation.
I also see that 79 is an odd number, thus representing “movement” and “progress” in Chinese numerology. The number 88 represents double good luck since the number 8 represents infinite prosperity in Chinese culture. The future looks bright for SM Aura based on these numbers.
SM Aura has 1,771 parking slots with additional bicycle paths. The design team of SM Aura includes the “Arquitectonica” from Miami and “EDGE” from Sydney.
In A Nutshell
The business empire of SM store chain is more than a venue for fun shopping, fine dining and social events. Every SM store that we see is a representation of Filipino business ingenuity, stability, resilience during hard times and optimism despite the uncertain future. These are things that we can learn from Henry Sy, Sr.’s example.
In my opinion, you know that you are in a good place in the Philippines if there is an SM Department Store or SM Supermarket in that area. Why is it so? Most people would agree that even on rural and underdeveloped provinces in the country, once an SM branch is built there, life automatically changes for all, a change for the better. There are now more than 30 SM branches around the country.
From his journey during pre-war Manila, then his first shoe store in October 1958, and then the opening of the first SM Department Store in 1972 in downtown Manila, all the way to last month’s opening of SM Aura Premier, we can learn so much from Henry Sy, Sr.’s life story and business principles. His life story of struggles, survival and victory is an inspiration to every Filipino and even international business people.
Here are more wise quotes about business and common sense from the richest man in the Philippines.
- “My basic strategy is to stick to my core business, and to my area of expertise. My businesses are all related to retail, shopping centers, banking, real estate and tourism development. Together they create synergy.”” –
- ““There is no such thing as overnight success or easy money. If you fail, do not be discouraged; try again. When you do well, do not change your ways.”
- “Success is not just good luck. It is a combination of hard work, good credit standing, opportunity, readiness, and timing. Success will not last if you do not take care of it.”
Henry Sy, Sr.’s List of Awards:
- Management Man of the Year” by the Makati Business Club – 1999
- Honorary Doctorate in Business Management by De La Salle University in January 1999
- Forbes magazine Heroes of Philanthropy 2009
- 1st Chinese-Filipino recipient of the PCE Big Brother of Filipino Entrepreneurs award (2006)
- 1st Chinese-Filipino recipient of the PRA President’s Award (2005)
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