When a company is experiencing unfavorable market conditions, many business leaders would see a single-minded approach to maximize profit as a tough yet necessary route. But for Michael Tang, CEO of Convenience Retail Asia, compromising its long-standing connection with the community was a red line he was not willing to cross, even when faced with a rapidly deteriorating retail market.
Tang stepped into the role at the helm of the Hong Kong-based retail group, which specializes in bakeries, patisseries and eyewear, with an optimistic enthusiasm about the industry’s future.
“We were just coming out of the COVID-19 pandemic, and at that time, everything, not just in Hong Kong, but everything in the world was a lot more promising,” he tells The CEO Magazine.
“After three-plus years of lockdown, there was a lot of positive optimism toward consumer retail.”
“We’re hustling every day to adapt to the changes in the marketplace and changes in consumer behavior.”
It wasn’t just the market that excited Tang, but also the prospect of leading a company with which he felt a unique connection.
“It was a chance to lead a very dynamic business, but at the same time it was an opportunity to lead a brand with over 50 years of heritage, which I personally loved and three generations of my family had enjoyed,” he says.
“I had a lot of high hopes to take this business to the next level by looking at expansion opportunities both in Hong Kong and Mainland China and also South-East Asia.”
Yet by the time Tang was integrated into the role, a new post-pandemic status quo began to take shape, immediately presenting him with serious challenges.
“Shortly after I had taken on the role, it became clear that the world had changed, particularly in retail for Hong Kong,” he says. “Consumer behavior had changed in many ways that no-one would have expected, with consumption patterns being very different.”
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It became Tang’s objective as CEO to understand and react to these changes in order to keep serving the demands of the company’s customers.
“If you fast forward to where I am today, nearly three years in, it’s been all about adapting to change. We’re hustling every day to adapt to the changes in the marketplace and changes in consumer behavior,” he says.
Culture of resilience
Despite the obstacles, one of Tang’s proudest achievements during his relatively short tenure as CEO has been fostering a proactive and resilient corporate culture.
“What I’ve really imposed on the business is having a mindset of training, adapting and doing things differently. We are always experimenting, and we always keep pushing,” he says.
“I tell the team that the key is consistency and intensity. We have to be persistent in what we do and keep doing it daily, but with a level of intensity that is impactful.”
This is the approach that the company needs, Tang explains, to overcome the challenging business environment.
“This has been the bright spot in the past two-plus years, instilling a confidence and energy to say, ‘Look, the market is bad, no-one is doing well, but can we beat the market?’” he asks.
“One thing I always tell the team is to control the variables that we can control. While we can’t always control foot traffic and retail figures or the rising cost of raw materials, there are things we can control.
“We can limit our internal labor costs, launch innovative products that capture eyeballs and stimulate the market and optimize our social media.”
“The vision for the business is to be a sustainable bakery retailer that also looks after the community.”
One thing that has remained consistent through periods of turbulence for Convenience Retail Asia is its commitment to going the extra mile for the people it serves.
“The vision for the business is to be a sustainable bakery retailer that also looks after the community,” Tang reveals. “There’s a reason we keep all our products at around HKD$7 [US$0.90], because of our inability to pass on the cost of inflation to the consumer.
“It is my intention to keep the pricing at a reasonable level because we serve a lot of silver-haired consumers and we’ve been doing that for 50 years.”
As well as protecting low prices, the company is committed to giving back in a way that is beneficial for both the community and the environment.
“We allocate parts of our stock to give back to charity, working with not-for-profit organizations to hand out food products to the community,” Tang says.
“We have onboarded an initiative called Yindii, which allows consumers to buy products at half price at the end of each day through an app. We use this as a way to control food waste, which minimizes carbon footprint, but it also gives our community a chance to have fresh bakery products at a significant discount.”
Common ground
As Tang looks to the future, he sees the maintenance of the company’s carefully selected strategic partnerships as key to achieving lasting success.
“For us, it’s about the long-term sustainable growth in relationships. Every relationship that we have today, whether with an individual consumer or through enterprise customers, is predicated on trust,” he explains.
“Having trust placed in our brand toward food safety, integrity, fair pricing and equitable commercial terms is very important for the long-term growth of the business.”
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For a company that has an uncompromising commitment to its principles, Tang says its partners, which include Plaap Design and Puratos China, must have a similar ethical worldview. When faced with a choice between quick profit and doing the right thing, for Tang, the decision will always be clear.
“It’s not just about us choosing one party as a business model, it’s about having similar value sets too,” he confirms. “There have been been business relationships that I’ve walked out of because economically it may be a very good business, but the CEO or the owners behind the business have a different value set than us.
“These are defining moments between going after a short-term profit versus committing to long-term sustainable relationships.”
