Little Black Book: Seven People to See in Hong Kong
By:Kristie Lu Stout
Issue: January 2001
One of the great old-world business capitals bustles with techies and Net-savvy entrepreneurs.
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Long a world-class transportation hub, Hong Kong is morphing into Asia's high-tech hotbed. The territory boasts a mobile-phone penetration rate of more than 50 percent, and 90 percent of all households are tapped into a broadband network. There's a thriving local venture capital community and an international pool of IT talent drawn to the buzz and cosmopolitan glamour of the port city. Since the 1997 handover to Chinese rule, the e-business scene in Hong Kong has gained momentum, attracting heavyweights such as AOL and Yahoo to go along with homegrown new-economy leaders Global Sources and Pacific Century CyberWorks. Guanxi is a popular Chinese business term meaning well-connected; these seven Hong Kong digital kingpins certainly are that.
The Expat
In 1965, Nebraska-born Merle Hinrichs arrived in Hong Kong with an MBA from Thunderbird, $25 in his pocket, and a plan to publish an Asian high-tech trade magazine. Thirty-five years later, the reclusive American has turned his Asian Sources publishing house into Global Sources Ltd., one of the world's largest business-to-business trade facilitators. When not on his 160-foot yacht, Hinrichs leads a 700-strong sales force that has signed deals with giants like Compaq and Philips, as well as with Chinese shoemakers. The Global Sources website lets buyers worldwide peruse the offerings of more than 90,000 registered online suppliers from 150 countries. The inventory contains more than 80,000 products, ranging from Internet switches to housewares. With $51.1 million in revenue for the first half of 2000, Global Sources is proof that even a 59-year-old expatriate can navigate Asia's new economy and score big.
The Compassionate Capitalists
Before Hong Kong was faced with a mass employee exodus from old-economy firms and buses plastered with dotcom ads, former bankers Johnny Chan and Ilyas Khan founded Hong Kong's first incubator/venture capital firm, Techpacific.com. Since Techpacific's launch in 1998, the firm's portfolio has grown to more than 30 ventures, including the leading Arabic portal, Planetarabia.com, and the Nasdaq-listed Chinese community site NetEase.
With Techpacific, Chan and Khan introduced a nurturing touch to Asian venture capital. They take a hands-on approach to all of their portfolio companies, providing one-on-one coaching to young entrepreneurs. Both are market-savvy grayhairs who wield not only business wisdom but also a golden Rolodex. Chan also assists the Hong Kong government's Applied Research Fund, which provides venture capital to fledgling local technology businesses. Khan last served as a managing director at Nomura Securities. To stay on top of trends, the partners cosponsor IandI, a group that hosts popular weekly gatherings for international techies.
The Technocrat
When Carrie Yau was named Hong Kong's secretary for the information technology and broadcasting bureau last May, the business community was openly skeptical that a female bureaucrat could lead the island's high-tech development. But Yau has held her own. As the top adviser to the Hong Kong government's chief executive, Tung Chee-hwa, Yau determines the fate of any major high-tech initiative in the region. Under her watch, the government plans to upgrade its wireless networks to 3G broadband by 2002 and to boost access to online government services such as voter registration and tax-return submission. Perhaps Yau's most ambitious project is Cyberport -- Hong Kong's $2 billion strategic IT business center. Having inherited Cyberport from her predecessor, Yau must ensure that the high-profile project is ready to open by 2002. She's off to a good start -- the site has attracted 15 major tech companies as anchor tenants, including Cisco, Microsoft, Oracle, and Yahoo.
The E-Commerce King
Hong Kong native Leroy Kung toiled in Silicon Valley as a software developer before returning to his homeland in the mid-'90s to jump-start Asia's e-commerce scene. In 1996, Kung founded the pioneering Internet commerce software provider iMerchants. His company built Hong Kong's first Web-based banking system in 1997, launched the first Asian online steel exchange, iSteelAsia.com, in 1999, and kicked off Net Alliance, the first online banking consortium in Hong Kong, last year. A recent partnership with Intel to build online exchanges will give iMerchants added muscle in the increasingly competitive Asian markets. With a $40 million market cap, the public company generated a net profit of about $100,000 for the quarter ending on Sept. 30. Strike up a conversation with Kung, and the consummate salesman will likely give you a lecture on e-tailing in China -- and perhaps a pitch to partner with him.
The Asian Tycoons
Good luck scoring a meeting with the father-and-son team whose companies collectively account for 15 percent of the capitalization of Hong Kong's stock market, 60 percent of its mobile-phone market, and virtually its entire fixed-line system. But even if you aren't hobnobbing with the Lis, you'll want to be up on their latest moves.
The Mainland China-born Li Ka-shing cut his teeth in business selling plastic wallets on the streets of Hong Kong at age 15. In 1950, he opened a factory that manufactured plastic flowers. Later he got into commercial real estate. By the late '70s, he had amassed enough property to give him a controlling stake in the powerful Hutchison Whampoa trading house. Since then he has become Hong Kong's best-known tycoon, with substantial interests in real estate, telecom, shipping, retail, and power utilities. In recent years he has moved into the Internet world. His Hutchison subsidiary runs Ports-n-portals, a business-to-business shipping website serving 19 international ports, and recently signed a deal to co-build China's first online oil and gas exchange.
Whereas Li Sr. is reserved and traditional -- reportedly living in the same house he bought for $13,000 in the 1960s -- his 34-year-old son, Richard, is outgoing and brash. To celebrate the new millennium, for example, he flew Whitney Houston to Hong Kong to perform at a $20 million bash. The younger Li sold his first company, Asian satellite TV programming giant Star TV, to News Corp. for $125 million in 1995. He's now out to make his Pacific Century CyberWorks the world's largest broadband Internet access and content provider. With PCCW's recent merger with Cable & Wireless HKT, a telecommunications service provider, Stanford-educated Li Jr. is nearing that goal. The merged PCCW has more than 150,000 broadband customers in Hong Kong alone. Power stats aside, however, PCCW has suffered since the merger with 127-year-old Cable & Wireless. The combination of a fumbled deal (with Taiwan's GigaMedia) and Asia's general market malaise caused PCCW's stock to tumble on the NYSE from its high of $20 in August to $7 in early December. Now it's the billionaire son's turn to prove he has the maturity and stamina to build a multinational business.
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