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The untold story of how a food and lifestyle megaconcept was brought to life.
On the all in the office of City Super Group president Thomas Woo is a framed, poster-size photo of the company’s founder, Masashi Ishikawa. He is captured in his signature navy Pearly Gates golf shirt, looking down candidly and laughing. “It’s funny…” Woo trails off. “Has anybody changed your life five times before, except, maybe, your mother?” he says. “Mr Ishikawa has impacted my life five times. There has got to be something between us in our past life.”
In 1996, Ishikawa had been the managing director of Seibu Department Stores in Hong Kong but had been asked to return to Japan. He saw in Hong Kong a world of opportunity and, driven by his entrepreneurial spirit, left his job to put together a business plan for a new food and lifestyle store concept. After securing funds from Fenix Group – which operated fashion brands such as Prada and Anteprima – in three days, he built a core team of about 20 and found a vacant 42,000 sq ft of space in the basement of Times Square.
From August 1996 the team built the store from scratch, aiming for a December 6 opening – just in time for
the Christmas rush. There was an endless list of things needing to be done: brand development, planning the layout, managing construction, recruiting business partners and tenants, obtaining 30,000 stock keeping units, hiring and training more than 100 staff, setting up the back-end technology and purchase order system, creating marketing and promotional materials and launching the city'super membership card.
Senior buyer, western grocery PY Tsang says the core team had no office of its own, its members sharing a borrowed conference room instead. “We brought in our own laptops, which were probably heavier than the desktops today,” Tsang says. “We brought in our own stationery and printers, too”
Senior cheese and delicatessen specialist Ivy Tsang says: “Before the store opening there were no computers. So we had to wait in the office until the Life Division (now LOG-ON) colleagues left for the evening, to use theirs. But they didn’t leave until one or two in the morning. It was a test of patience.”
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With a limited budget for marketing, head of product development Nathalie Chen and other members of the team created their own catalogs.
city'super Times Square store assistant manager Kwok Yau-kai, then responsible for item control, vividly remembers Page One being used as a receiving dock for the stock. The construction work meant the store was deep in dust. “We couldn’t stock up during the construction, so we had to wait until they left for the night, move the products on the shelves one by one, then cover everything in garbage bags. When we came back in the morning, we’d have to clean again. We didn’t care if we were inhaling the dust, but we just kept vacuuming. It was crazy,” Kwok says.
Ivy Tsang has similar memories. “All the products from all over the world arrived two to three days before the opening, because we needed everything to be fresh,” she says. “I really worked until I cried.”
So gung-ho was the team’s attitude that it completed the unimaginable task of opening their first store in just four months. When the doors opened, the team had a working store that was not only functional, but beautiful, too. However, for years to come city'super was to face the unintended consequences of doing a rush job. “There’s a good side of the story and there’s also a painful side of the story,” Woo says. “There’s the good side: Wow! We did it! Wonderful! In four months we put this thing together. It was a miracle. Behind the scenes, there was a horrible time of dealing with the consequences. At the back end, there were so many problems we had to deal with. For many years we suffered.”
The database used meant that building the inventory system, for instance, was “like building a house on sand,” to use Woo’s description. “You know what was funny? The IT system,” he says. “It’s impossible to build an IT system from scratch in two months, but someone did it for us. It was like building a system on Excel. Opening a purchase order took 30 minutes. It was painful. We built this surface system in such a short time so we could run a business. We suffered for years, trying to build a new system to replace it.”
The construction work was hurried, which entailed the need for renovations down the years. “We had two months to build a store, from layout to construction to the finishing touches,” Woo says. “Even though we’re so well established now, we can’t fix all the problems. The contractor didn’t have time to properly layer an even floor, and the foundation wasn’t good, so it’s easy for the floor to be uneven. We were really pushing it.”
One of the most challenging tasks was to get 30,000 stock keeping units, or skus, from around the world. A team of eight to 10 buyers had the gargantuan task of finding 30,000 products. “At the time no one knew what city'super was. We needed to find business partners, one at a time, to source both local and overseas products,” says City Super Group vice-president Eliza Lau. “There was so little time. We were only able to email back and forth and make a few trips to Japan. To introduce this 40,000 sq ft lifestyle concept, we had to really understand the vendors very well.”
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To build a more profound relationship with Japanese vendors and obtain products directly from them, city'super opened an office in Japan in 1999, established by another City Super Group vice-president, Takayuki Ooke. Ooke had worked with Ishikawa for Seibu, and was invited to liaise with Japanese vendors. The first office in Japan was a small room in his home.
The Japanese were reluctant at first to export their products to Hong Kong, meaning months of sleepless nights for Ooke. “When I went to exhibitions in Japan, especially for lifestyle products, they would ask, ‘Where are you from?’ When we told them we were from Hong Kong, they would refuse to show us because the Chinese always try to make a copy. I explained to them that what we try to do at city'super is bring the best from around the world, even if the price is high,” he says. “I invited so many Japanese vendors to city'super to see what we were doing, and some agreed.”
Ooke remembers shoving wads of cash into his pockets, hoping that the vendors would be tempted by payment upfront. “Every day I brought 1 million yen, but most of them refused because most Japanese companies expect long-term business, not just one-off. They didn’t want to accept the money. They wanted to know our company more. So I spent two hours with them and introduced ourselves. And, finally, they agreed to come,” he says. “I never spent that 1 million.”
The Times Square city'super store was just the start. The core team boldly ventured out of the basement and started numerous ventures, experimenting with business ideas whenever an opportunity presented itself. “In the early days, we had a great sense of entrepreneurship,” Lau says. “The idea was: once there is pportunity, you try it. There was Pit>in, Powder, Gadget – many of which you may not have heard of before.”
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The most successful venture was perhaps the opening of their first LOG-ON store in Festival Walk in 1999. The massive lifestyle store, occupying 16,000 sq ft, quickly established a name for itself. With all the trial and error, not all the ideas were triumphs. The second LOG-ON store, in Cityplaza in Tai Koo Shing – closed at the end of its six-year contract in 2006.
“All of our other stores were successful, but when you’re successful and you’re met with failure, it makes you think: where did we go wrong?” Lau says. “We underestimated the importance of location and, even more so, overestimated our ability to draw traffic in an otherwise dead-end location. So now, when we open a new store, we’ll look at the location from multiple angles. But if you don’t try, you’ll never know.”
The unforeseen closure of this LOG-ON store didn’t deter the city'super team from making further ventures, however perilous. The team took another risk with the opening of the store in ifc mall. In the early 2000s the northern side of Connaught Road Central had no retailing activity, and all Central converged on the area in and around the Landmark. There was no ifc mall. “The building at the time was a new project and just a construction site,” Lau says. “When we looked at it, there was nothing but a plot of dirt land. But we were willing to commit, and it’s one of the best decisions we’ve ever made.” The team eventually opened the ifc mall city'super store in 2003.
In this prolific period, the team opened the first city'super store overseas, in Taiwan, in 2004. In 2010 the team opened another store beyond Hong Kong’s borders, in Shanghai. Today, the group operates 21 stores in Hong Kong, seven in Shanghai and six in Taiwan.
All the team’s risk-taking has proved worthwhile. In each of the past 20 years business has been better than the year before, Lau says. “From the first Christmas in 1996 to the upcoming 21st Christmas, the whole management team has and will always look at the sales numbers at Times Square on December 24 and they’ll clap their hands,” she says.
city'super’s success in the past two decades cannot be attributed to any one thing or person. From the beginning, the idea was simple: to bring the best of everything from around the world; to present it in a way that lets customers recognize its quality and desire it more than any other supermarket product; and to tell the story behind each product, be it a slab of Yamagata wagyu or a crate of Japanese organic rice. In all of these ways, city’super has succeeded in making itself quite distinct from any other supermarket chain. Take, for example, city'super’s farm in Kyushu, Japan, where buyers are sent to understand the farming process; and the meat offered at the butchery counter, every cut of which is appreciated by senior meat buyer Marc Chau.
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We have a license to buy from wet market auctions,” Ooke says. “But what we want to do is buy from the farm directly, to understand what they are doing, how they harvest. That’s why we started rice farming with the Hong Kong buyers. Without the experience, they only know the retail product, not the story behind it, and we cannot understand the value to deliver to the customers.”
The story of city'super begins with one man with a vision and the nerve to make it reality – and, Woo says, three other things: “the right environment and timing, the right place and condition, and harmony among the people.” Woo is especially touched by the people. “It’s time for gratitude, to say thank you, not only to the people who have been here for 20 years, but those who have been part of the process for any number of days, months or years,” he says. “So, thank you all.”