Responsibility for debt
TenFu is not Lee's first business to become a household name. In his native Taiwan, Tenren Tea, which he founded, has been running for over half a century. In the old days, Lee's ancestors carried big-leaf tea seeds from Fujian in China to Nantou in central Taiwan. In subsequent years, the Lee family carried on growing tea from one generation to the next. Lee grew up on the family farm, and became naturally imbued with the culture and skills of tea. At age 17, he graduated from the hard work of cultivating tea plants to become a businessman, establishing his first venture, Tenren Tea. It was the first, and at that time the only, major tea brand in Taiwan.
In the 1970s, when Taiwan's economy was booming, Lee branched out into other areas such as stock brokerage. Unfortunately, Taiwan's stock market collapsed in 1990, and Tenren's brokerage fell into financial ruin, NT$3 billion in the red. To pay off the debt, Lee had to sell everything, yet his reputation actually gained from his misfortune. An old acquaintance, former Judicial Yuan president Lin Yang-kang, says, "I knew Lee was a good businessman, but it was only then I realized he was also an ethical one."
Lee's attitude to business has always been one of giving everybody the opportunity to make money--sharing the good times--but when debts were due, he suffered them alone. As a result, when times were hard, his family and friends were still willing to collect NT$50 million to help resurrect the business. No one could have predicted that at age 60, Lee would be able to rebuild his empire, but 14 years later, he has even regained a small part of the "lost land" (China) and repurchased a 26% share of the present-day Tenren Group. TenFu today has grown to a level of prosperity beyond his dreams: "I had confidence in taking my Taiwanese experience to China, but I never imagined the results would be so spectacular," says Lee.
Life without time
Lee's achievements look pretty amazing, but they are no fluke. He can analyze the reasons for his own success. If you want to do business in China, four things are key: First, stick to your own area of skills; second, be there--you can't trust others to look after things for you; third, have enough capital support to survive the bad times; and finally, develop the abilities you need to do the job. Lee has not only these four fundamentals, but also one other trait in abundance: the patience to wait out the hard times, suffering frustration and working hard, waiting for opportunity to arrive.
Lee spent two years checking out a number of tea-growing areas in China, and finally chose his ancestral birthplace, Zhangpu County, as the site for his new venture. He has put all his effort into the last campaign of his life: "Make it a success, and never countenance failure."
"See the moon as the sun, and feel the rain as a shower" is Lee's personal motto. For 14 years, in order to win back "face"--his honor--Lee has lived every moment to the full, racing against time. His home Rui Yuan is situated alongside the tea museum in a quiet and beautiful setting, but he never relaxes. Following a strict daily work schedule with little rest, he lives the life of a monk--dedicated utterly to achieving his dream.
"Our chairman often doesn't know what day it is. The day has no meaning because for him every day is a working day," says Shen Fu-ching, who has been Lee's personal assistant for two years, living the same lifestyle of work without rest.
Lee takes the American general Douglas MacArthur as his model, always setting a good example with his own conduct. Before you ask someone else to do something, he says, you need to be able to do it well yourself.
"Trying to do two things at once means that neither is likely to be done well." Lee is very strict with himself, refusing to be tempted by influences that he sees as distracting, and he expects the same degree of self-control from his employees. He forbids absolutely, for example, his senior Taiwanese staff to keep mistresses in China. If he learns that someone has broken the rules, there is no chance of forgiveness for that employee. Because Lee is so strict with himself, his close colleagues are very careful and dare not relax their conduct.
Lin Po-chi was previously personal assistant to the chairman, but two years ago was promoted to general manager. He believes he was chosen because for his eight years in the company, he hadn't taken one day off. While he was Lee's special assistant, he took his three meals with the chairman every day--not always an easy task since they often discussed business during their simple meals, and often the dinner lasted from seven or eight in the evening until midnight.
Tasting the tea
"One can discover all worthwhile things in the world in the confines of one's own home. In this little room, one can discover all the different kinds of famous tea." This poem adorns the wall of TenFu's quality control center, reflecting the ambitious and intrepid spirit of the owner.
It is often said that very few understand the deepest significance of Chinese fengshui, traditional literature, or tea. Lee is a truly talented man. He can accurately discern and appreciate the many different kinds of tea, tea-growing districts and elevations, and is very sensitive to changes in air temperature and humidity.
He has just announced that "the humidity is about 50% right now," so his younger sister takes the hygrometer outside, then comes back and announces the result--Lee's estimate is very accurate.
TenFu doesn't actually produce much tea from its own properties, as these are used mostly as demonstration farms for the benefit of tourists. Most of the products in the teashops are from other growers who do the bulk of serious production.
Of all the different kinds of tea bought by TenFu, Taiwanese oolong tea comprises 20% of the total, and the rest is made up of the most characteristic mountain teas of China. All the teas are tasted by Lee himself, who decides on an appropriate price. In fact, quality testing is one of Lee's most important tasks.
"When I am tasting tea, I need to keep away from women," he quips. This is because the aromas of their make-up and perfume can distort his sense of smell.
Watching Lee taste new teas fresh from the suppliers, I was surprised to see that, unlike traditional tasters who spit the tea out after tasting, he swallowed each one. I asked him whether he drank too much tea: "These are all nice teas, I cherish them and have no desire to get rid of them." The old man's love of his teas is impressive.
Copying his Taiwan experience
TenFu's success cannot be simply because of Lee's knowledge of the teas he loves, nor his skills in tasting. The businessman part of his complex makeup has played an important role in his success.
Besides the excellent locations he has found for TenFu's teashops, Lee contributes a lot of his success to his efforts in the development of related industries, and establishing the brand's popular image.
Following Tenren's successful experience in Taiwan with establishing a rest stop with shops and restaurants by a major highway in Toufen, Miaoli County, Lee saw the business possibilities of China's freeway network, which has recently undergone enormous expansion. He won contracts to manage rest stops on the Xiamen-Shantou freeway in Fujian and Sichuan's Chengdong freeway, the first private organization permitted to begin such an enterprise in China.
TenFu's rest stops are run differently from those in the Chinese government system, which often lack good friendly service. TenFu provides not only teashops and restaurants, but also spacious, clean restrooms, free toilet paper, and water for washing cars; they even offer free tea for customers--a first for Chinese travelers. So during holiday periods, TenFu's rest stops are always packed, seemingly even more popular than shopping centers. Following Tenren's experience in Taiwan, in 1997 TenFu introduced Taiwanese-style snacks such as pineapple cakes, moon cakes and dried tomatoes, a move welcomed by Chinese consumers. General manager Lin Po-chi says that their snack foods have become even more popular than their tea.
The tea museum is located below Mt. Liang in Zhangpu's Pantuo Industrial District. Lee sees it as an investment in developing and maintaining tea culture, and as a way to reinforce the TenFu Group image.
"I have always wondered whether a museum of tea could be a success," Lin says. Many people in China cannot understand why a Taiwanese private company is doing what might normally be done by the government, especially as the museum is running at an annual loss of over RMB2.6 million (about NT$10 million). But the museum has made a great contribution to TenFu's image, and TenFu's position at the top of the tea industry has never been more solid. In January 2006, it was selected as one of the "Famous Brands of China." Among these 501 companies, TenFu was the only representative of the tea industry.
The century of tea
With the resurrection of the tea industry by TenFu on both sides of the Taiwan Strait, one of its deepest and most widely felt outcomes has been the revival of tea culture.
One can see TenFu's beautifully decorated tea shops located in the most prosperous areas, such as Beijing's Wangfujing Street and in Shanghai's Huaihai Middle Road and Nanjing East Road.
When customers enter the shop, staff in neat uniforms greet them with a friendly "Welcome, good morning!" and offer a cup of hot tea within 30 seconds.
This novel style of selling tea has become a model that other companies are copying, and has even been taken up by some government enterprises. Lin points out that businesspeople come to learn the idea of "gentle service," and the tax department comes to learn the idea of "civility."
TenFu now runs 576 teashops scattered throughout China. Their number should increase steadily, as Lee predicts China's tea market still has plenty of room to grow.
When Lee first came to China, average annual tea consumption in Taiwan and Japan was about 1,200 grams per person, but in China it was only 200 grams (it grew to 450 g in 2006). He predicts that China's tea consumption will reach the same level as in Taiwan and Japan in 15 years; in other words, the market can still easily double.
Nevertheless, Lee's ambitions extend well beyond China. "Money talks," he says. In the 19th century, Britain spread black tea around the world; in the 20th, the US popularized drinking coffee and cola. "Who will become the leading nation of the 21st century?" Lee expects China's tea culture to spread and be strongly influential in the coming century.
With this prediction in mind, Lee has planned a blueprint for the future: Taiwan's Tenren will take orders from abroad; TenFu will produce the products for export, and Chinese tea will be carried to all the corners of the world. Lee is more than happy to give advice to Taiwanese tea farmers and businessmen: "What you already possess, you must cherish; what you want to possess, you must pursue and grasp strongly." He says Taiwan will still have an advantage five years into the future; but if they do not grasp the opportunity, it will be lost forever.
"People from Anxi in China are becoming more competitive," points out Lee. Anxi in Fujian is one of the most famous traditional tea locations in China, and it is estimated that about 80,000 Anxi people are presently involved in the Chinese tea trade. Anxi's tieguanyin oolong tea has grown in popularity due to aggressive marketing. So although Lee is keen to improve the reputation of Taiwanese tea, with no outside support it will be very difficult with such stiff competition. Based on 2005 figures, the prospects of teas imported into China from Taiwan and Taiwanese-style teas grown inside China are gradually declining, while sales of Anxi's tieguanyin oolong tea have grown by 70%.
"The Taiwan government should encourage Taiwanese tea businesspeople to become more organized and develop strategies to do better in the Chinese market," says Lee. Taiwan's agricultural skills are at an advanced level, but resources are limited: only one type of tea--oolong, and production levels are low. In the future, Taiwan's local tea farms should move toward developing top-quality teas and encouraging tea-related tourism. The lower-profit business of cultivating tea should be transferred to China, and the profits gained brought back to invest in improving the quality of Taiwanese tea.
The world from the mountains
Tea is called the "drink of peace." Lee regards himself as an ambassador of peace, and believes the tea industry on both sides of the Taiwan Strait will only prosper through peaceful cooperation.
Despite his 72 years, Lee insists that "if you are alive for a day, you have to strive for a day." Lee listens to the Taiwanese popular song "Winning Comes Only from Striving" to provide encouragement for himself. This song was played in TenFu offices for ten years, but in the last two years, because the business has stabilized and his mood has softened a little, they now play different songs: "Grateful Mind" and "Sweet Family." All the employees know them by heart. From big decisions like deciding the company's future direction, to smaller ones like the facial expression of the statue in his sculpture garden, Lee has always made decisions alone. He is planning to retire in five years. "I want to return to the mountains in Nantou in my retirement, and I will live in the mountains so that I can survey the world at my leisure." As he speaks, a gentle, expectant smile appears on the old man's face.
"Moving from sunset to sunrise." Under the direction of the "King of Tea" Lee Rie-ho, his beloved industry has been resurrected and is prospering--as is he.
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