Fosun Interview

French DNA and Chinese consumers --My experience with Fosun and being a global partner

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More than forty years ago, I joined a French delegation in July, 1976 to visit China. When I arrived in Shanghai, the only hotel was the Peace Hotel on the Bund. And there were no cars. Could I imagine at that time China would become what it has become today? No. However I always thought China would succeed. My father is a great fan of China, became one of the western leaders who are friends with Mr. Deng Xiaoping,  and who always believe in the future of China.

 

It’s so impressive to see the unbelievable change of China in the last forty years. What China has achieved, no other country, no other civilization has achieved in such a quick and efficient way.

After my trip and when I became Chairman of Club Med, I said to my team, we should be prepared to go to China. I said we also should have Club Med in China and we put a small office in Shanghai, Beijing and Guangzhou in 2003 when China first opened door for individual travel.

As we don’t know anyone from Fosun at the time, we also have been present in Singapore, Taiwan, Hong Kong markets for thirty years, so we thought we are fitting very well with the Asia culture and we can do it by ourselves. We started to sell Club Med stays for our South East Asia resorts.

When I thought we should put resorts in China, we had some beach opportunities in Hainan and then a ski opportunity in Yabuli. I discussed with my team, and said we should start by the ski resort, which is a bit of strange idea because at that time, the ski market in China was very small.

 

In two years, our occupancy rate in Club Med Yabuli grew from five percent to 50 percent, so it is at that time I truly believe that Club Med could do great in China. And I said, we need a Chinese partner. As we discussed with a number of companies, state-owned ones, private ones, and then we were lucky enough to come across Fosun.

 

I went to visit Fosun headquarters to meet with the four founders at that time. I remember as we entered the broad room, there was a big photo of mountain. On each of the peak going to the highest, there was highlighted achievement of Fosun. I said to Chairman Guo, “I’m very impressed to be here as I see what you’ve achieved. For Club Med, we are still at the bottom of the mountain, and we’d like to climb with you.”

 

Mr. Guo and Fosun’s management saw the potential revolution of the Chinese economy. We should outline what we should do in order to be a front runner in the new Chinese economy. We agreed leisure tourism will be part of it and Club Med fits the best. Then we decided Fosun should become the major shareholder of Club Med. During the takeover process, although there was a bidding battle, in all of those steps, Fosun has been a remarkable, agile, clever and strategic partner.

 

Mr. Guo also told me there was technological change - internet plus mobile. And we should prepare Club Med ready for that. Nowadays our strategy is based on providing global premium all-inclusive holiday resorts for families, all upscale, middle-class families with digital approaches.  

 

In the first three years of cooperation, we started know each other and learn to understand and trust each other. I said we should respect the Club Med founders and their heritages. I’m here to protect the DNA of Club Med’s French roots and make the DNA of the French spirit goes around the world. Secondly, our GOs make the main difference.

 

When we started in 2003, the tourist market of China was only travel. If you go to Europe, you will spend one day in Paris, one day in London, one day in Rome, it’s all sightseeing. We say no, you should take vacations: Stay in one place, and experience things in the place. We are alone. All the big international hotel chains from America or Europe, they were expanding among first tier cities, second tier ones as there was a general belief in the western world that there were no holidays in China. Chinese are working all the time.

 

Nowadays, it obviously has changed considerably. Chinese are more and more willing to go to one place, relax, enjoy and experience, thus we have made a success.

 

Nowadays our Chinese guests are very enthusiastic to try everything as they are remarkable guests, the same as French ones after the Second World War when they first discover the holidays. The Chinese families are extremely active and obviously growing their levels of requirement, quality, comfort, facilities and food.

The combination of price efficiency and price quality ratio of premium all inclusive, with the fact on site you have a lot of things to experience, try, show, dine, make us a unique offer. In Club Med you can do everything within one place.

 

Given I’ve been a global partner at Fosun now I perceive it as an honor and an achievement. Furthermore, it’s responsibility. From the very beginning, I felt to be a partner of Fosun, with all we did together and all the ups and downs, I felt a close relationship from the very beginning as a member of the Fosun family. Obviously being a global partner makes it more formal today. I’m extremely satisfied to see that Fosun is going to happiness for families, which is very much in line with Club Med’s mission.

 

Both Fosun and Club Med are very proud when President Marcon and President Xi Jinping met and set us as an example of cooperation and effective development between French and Chinese companies. An example of what it brings: Club Med has never grown so fast. And the three strategy pillars to drive the growth are global, upscale and happy digital.

 

We only want to be in the best places in the world and the best places of China. We are accelerating our development base and will open six new resorts this year and this would be the ratio of the next three years. We are also renovating our major resorts around the world. So at the end of 2020, we will have do best portfolio of resorts in the world.

 

In the past eight years, I think basic values and management principles of Fosun have not changed during the years I have been with Fosun. Two strategic focuses have switched: One is to create global happiness for families and the other is C2M.  Now it is very clear three pillars - health, wealth and happiness are very clear long term industry focus.

 

It’s been changing fast as the digitalization is obviously a global challenge, bur LAO poses opportunities. There is one word to describe Fosun and Club Med’s corporate culture: happiness and we will all achieve it together. When I gave my vision for 2018, to the GOs, I said, Fosun culture, the classmate approach means you have to learn. I said each day to myself how I can do better and we should all do that to improve.