Innovation, perseverance help Wanda stay ahead of competition

Wang Jianlin is not afraid of challenges or changes. Rather, he sees them as the much-needed adrenalin that helps the Dalian Wanda Group Co to stay ahead of the competition in China.

"If you have a dream, you must protect it. Similarly, if you want something, you must go and get it," says Wang, chairman of the Wanda Group whose business interests span sectors as diverse as real estate, hotels, department stores, culture and tourism.

Dressed in a well-tailored suit, the 58-year-old tycoon, who ranks the 276th on the 2012 Forbes Billionaires List with wealth of $4 billion, says in a firm baritone that: "Every challenge is a new growth opportunity and a new starting point. It is this perseverance that has helped us overcome many challenges and made us into what we are today.

"Transforming the culture and travel business of the group is the foremost challenge for the Wanda Group now."

Although the exercise is not that easy, Wang says he loves the challenges associated with it. "The robust economy and better living standards in China have given a fillip to the tourism and culture industries."

Wang says this is also a challenge. Unlocking the commercial value from these industries is not easy, considering now much tastes and preferences can vary. His confidence is such that he expects by 2020, the two sectors to have a major say in the overall group turnover, along with commercial property. An optimistic Wang even goes to the extent of admitting that in the long run he expects culture and tourism to surpass commercial property in terms of returns.

Commercial property accounted for nearly 90 percent of the group's 105.1 billion yuan ($16.65 billion, 12.83 billion euros) revenue in 2011. Most of it came from the 16 Wanda plazas, 12 five-star hotels and 14 department stores of the group spread across the nation.

Though Wanda Group entered the tourism and culture sectors in 2005, most of its initial investments still remained low-key. But by 2011, all of that had changed. With investments of over 10 billion yuan in the culture industry, Wanda Group is the largest corporate investor in the sector in China.

And the initial investments seem to have paid off for the group. Film distribution and production, cultural entertainment chains, stage shows, and collections of Chinese calligraphy and paintings are now the main thrust areas for Wanda Group.

Speaking at the 2012 Annual Summit of Green Companies held by the China Entrepreneur Club in Wuhan, Hubei province, in April, Wang said revenue from the sector would surpass 20 billion yuan this year to make Wanda the largest corporate entity in China's culture sector.

"We expect revenues of more than 40 billion yuan from the culture industry in the next five years and a ranking in the top 50 culture firms globally. This will mark an important transformation in Wanda's development," Wang says.

Its subsidiary, Wanda Cinema Line Corp, is currently the largest theater operator in China with 84 movie theaters and 730 screens. It is also awaiting approval for an initial public offering this year or next.

Though culture is an important pivot for Wanda, it does not mean that travel is being given short shrift. Wanda is establishing five large-scale resorts in China with a total investment of more than 100 billion yuan.

One of these has already sprung up in Wuhan near the central culture are of Han Street. The 1,500-meter Wuhan Han Street is the largest single investment of Wanda Group in the culture and travel industries, estimated at 8 billion yuan. It is a commercial complex spread over 1.8 square kilometers with five-star hotels, grade A office buildings, waterfront mansions and the longest pedestrian street in the world. The group is looking to make it China's Fifth Avenue not only for fashion and luxury brands, but also cultural destinations.

Though he is soft-spoken and mild-mannered, there is no doubt about the steely resolve and sharp business acumen of Wang when he talks. The Wanda Group chairman says that much of his "grit" came from his tough days in the army.

"I joined the army when I was just 14 years old. I started as a soldier, and in the army I learnt that to be successful, one has to be brave, hard working, resolute and perseverant," Wang says.

Born in 1954 into the family of a senior army officer in Chengdu, Sichuan province, life was never easy for Wang. After graduating from junior high school in 1968, Wang's army stint took him to the Inner Mongolia autonomous region. Plagued by lack of healthy food and warm clothing, the young Wang soon realized that hard work and clear focus were essential tools for survival.

The effort and excellent performance paid off in 1978 when he was selected to the military academy in Dalian. After working in the academy for several years, Wang left the army and took up a job as the chief of staff to the chief of Dalian's Xigang district.

Although the prospect a political career was quite promising, Wang decided to use his potential elsewhere. In 1988, Wang became the general manager of a local residential development company, the predecessor of Wanda, in Xigang district.

In the beginning, Wanda's land purchases were largely restricted to buying from State-owned real estate companies, with meager profits. In 1989, Wanda got permission to develop a residential project in Dalian's Nanshan district, and completed it successfully. With this project, Wang made his first 2 million yuan of profits from the real estate industry.

But the real success for the group came when it was selected to revamp the old districts of Dalian. It was this accomplishment that made the group the largest local real estate developer in Dalian.

In 1994, Wanda also became the first real estate company to dabble in sports promotion by sponsoring the Dalian football club for the Chinese football league.

In 2000, Wanda pulled out of the soccer industry as by that time its business focuses had shifted from residential properties to commercial realty.

Wanda plans to open 18 Wanda plazas, its trademark commercial complexes, and 40 high-end hotels this year. With these developments, the group expects its overall turnover to surpass 200 billion yuan by 2015.

"We have confidence that Wanda will develop into the largest business in the immovable property industry globally, surpassing Simon Property Group, the largest global real estate developer in the United States," Wang says.

The chairman also hints that the group would make a sizable acquisition soon, without indicating the sector. "It will astonish the world", is all what he chose to say on the subject.

Wanda Group is said to be in talks to buy a significant stake in AMC Entertainment Inc, which owns the second-largest movie theater chain in North America, according a recent report by The New York Times.

By his own account, Wang admits that he is a workaholic. An early riser, he often works from 7 am into the wee hours of the following morning.

But all those hours of hard work have not been wasted. Over the years Wang has built up a sizable collection of contacts, both at the professional level and with the government. He, however, says that having contacts is not enough for success. "Be it a person himself, or a company itself that decides the fate."

huhaiyan@chinadaily.com.cn

(China Daily 05/11/2012 page17)