When Lance Y Gokongwei assumed the helm at his family business empire, the Gokongwei Group, he put in place an organisational and governance structure that helped him focus on charting the overall corporate strategy and maximising the deployment of capital and talent across the various companies that he and his family run.
What has held constant has been the values of hard work imbued in Gokongwei by his family since he was young, values that have helped the family grow into one of the largest business conglomerates in the Philippines and Southeast Asia.
“My father always said, “If you don’t work, you don’t eat,” says Gokongwei, president and CEO of JG Summit Holdings, the flagship entity of the group, in an interview with SGV Conversations, published by EY Philippines, a member firm of the global professional services firm EY.
“My parents believed that work was honourable and it was shameful to be idle. Working hard is part of who we are, and we learned that from our parents,” says Gokongwei, referring to his parents, John Robinson Lim Gokongwei Jr and Elizabeth Yu.
The Gokongwei family control a wide swathe of leading companies across numerous industries, touching the daily lives of millions of people. As of March 31, 2024, the family holds full or controlling stakes in companies including: 55.9% in Universal Robina Corp, a leading food products maker and distributor; 65.4% in Robinsons Land Corp, a leading player in real estate and hotels in the Philippines; 65.5% in Cebu Air, the country’s first budget airline and its largest domestic airline carrier; 100% in petrochemicals company JG Summit Olefins Corp; 100% in JG Digital Equity Ventures; 44.5% Data Analytics Ventures and 50% in logistics firm DHL Summit Solutions.
The Gokongweis hold smaller stakes in other equally notable firms such as 33% in Luzon International Premier Airport Development Corp; 26.4% in Manila Electric Company, Philippines’ largest electricity distributor; 11.3% in Philippine Long Distance Telephone Co; 22.7% in emerging digital bank Gotyme Bank Corp and 3.6% in Bank of the Philippine Islands — one of the top three largest banks in the Philippines.
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For particular relevance to the investment community here, the Gokongweis control 37.1% of Singapore Land Group U06 , a leading real estate and hospital player that is a subsidiary of UOL Group, in turn, part of a network of companies anchored by United Overseas Bank U11 and controlled by the Wee family here.
In recognition of these achievements and for making a mark in the economies and businesses of not just the Philippines but across the region, Gokongwei has been given this year’s EY-Bank of Singapore Asean Entrepreneurial Excellence Award.
Best lessons
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As seen from his earlier interviews, Gokongwei has always been aware of the responsibilities he would one day have.
“As the only son in a Chinese Filipino family, it was clear from the day I was born that one day I would be head of the family and head of the business as well,” recalls Gokongwei in the interview with SGV.
“The best lessons I learned from my parents were from being with them, observing and listening to them at the dinner table. I learned about the importance of family, working hard, and paying attention to details. I learned about running a business firsthand from the stories Dad told us, and we shared in his successes and failures.”
Immediately after Gokongwei graduated summa cum laude from the University of Pennsylvania, he came home and started working at one of the family’s companies, Universal Robina Corp, a leading Philippine multinational corporation famous for its numerous brands of food products. Driving an old Datsun with a broken air conditioner, Gokongwei sold Jack ‘n Jill snacks to neighbourhood convenience stores. “It really exposed me to our retailers and consumers at the most basic level. It helped me understand their thought processes when making their purchases,” he reflects.
In an interview published on JG Summit’s website, Gokongwei recalls he was paid PHP2,000 a month. “I may have been the son of the boss, but I worked harder than anybody else to prove that I wasn’t just the son of the boss,” he adds.
His ego — if any — was kept in check in other ways. He played for the company’s basketball team, but he did not pull rank. Unfortunately, he was “so bad” that the team would not let him play on the court “unless the other team was so far ahead that it didn’t matter anymore”, recalls Gokongwei in jest.
Starting an airline
As an astute business, the way to move ahead is to dare to do things boldly. For example, Gokongwei remembers vividly how his father was “very disappointed” when he lost the bid for Philippine Airlines.
As a result, John Jnr chose to start an airline of his own instead. Instead of creating another full-service carrier, the low-cost carrier Cebu Pacific — inspired by Southwest Airlines of the US — was started in 1996, amid a liberalisation of the air travel market. “He felt the low-cost carrier model was appropriate for a country like the Philippines, an archipelago of more than 7,000 islands,” recalls Gokongwei.
With the no-frills offerings, Cebu Pacific helped cut what used to take days of travel time by boats between islands into mere hours. “It was a major disruption in the travel industry, a meaningful breakthrough. And that’s what we continue to do today whenever we enter a new business, making sure we improve lives by providing better choices,” says Gokongwei. “Till today, we offer people better choices in everything we do.”
A mere five years after its launch, Cebu Pacific flew its first international flight in 2001 to Hong Kong, followed in 2003 with a long-distance flight to Dubai, where there are many expatriate Filipinos working there. The airline marked the carriage of its 150 millionth passenger in 2017 and the 200 millionth passenger flew in 2022.
Digital transformation
For the group to survive and thrive for so many decades, it is naturally expected that it has the agility to adapt to changes and challenges — and turn what would otherwise stymy other companies into opportunities to make improvements to its business processes and operations.
For example, when the pandemic hit, the group was in the midst of a multi-year digital transformation programme, which included the deployment of digital platforms to support new ways of transactions for the group’s supermarket and drug store businesses.
“Digitalisation and customer-centricity, which are two of our strategic thrusts, become even more relevant in light of the rapidly changing consumer behaviour and an evolving business environment. These critical enablers allowed us to quickly respond to the Covid-19 disruption, capitalise on emerging opportunities, and continue serving our customers in a safe and convenient way through e-commerce platforms,” says Gokongwei.
GoRobinsons, the digital store of Robinsons Retail Holdings, was created in just two weeks after the lockdowns in the Philippines were implemented. Since renamed GoCart, the digital store has been expanded to become an omnichannel platform that carries the so-called 14 banner brands of Robinsons Retail, namely Robinsons Supermarket, Robinsons Easymart, The Marketplace, Shopwise, Robinsons Department Store, Robinsons Appliances, No Brand, Handyman, True Value, Toys R Us, Southstar Drug, Daiso, Pet Lovers Centre and Shiseido.
The family now owns stakes in companies across industries ranging from food, airline, retail, real estate, petrochemicals and banking — all of which Gokongwei deems as “core”. Naturally, he is keen to invest in businesses that can help further expand this core.
At the same time, he is also eyeing emerging industries or those adjacent to the core businesses that can help support the overall growth. Such industries include health & wellness, green and renewables, among others.
Also, besides the home market, Gokongwei is upbeat about the prospects across the region. Outside of China and India, Southeast Asia is being recognised as the growth engine of the world. “I remain cautiously optimistic about the economic prospects of the Asean market,” says Gokongwei, noting that consumer spending in markets including Indonesia is back and even picking up following the pandemic.
Gokongwei is conscious of the geopolitical challenges and other external issues. Nonetheless, he sees many reasons to be optimistic about the Philippines’ near- to medium-term prospects. “Filipinos are known to be extremely resilient. We are able to bounce back quickly and firmly from adverse situations because of our culture of resilience — which is founded on empowerment, grit, and the spirit of bayanihan,” he says, referring to the spirit of civic unity and cooperation among Filipinos.
He believes that the country has a certain demographic advantage as well. “We have one of the youngest and most talented populations in the world. Our educated, predominantly English-speaking, and service-oriented workforce is definitely a boon to our tourism and business processing outsourcing industries that are key contributors to our economy.”
