FACE TO FACE INTERVIEW

NAME: Louis Yinglu Lin

COMPANY: Yancheng Body Fashion, a subsidiary of Triumph International

POSITION: General Manager EDUCATION: Bachelor of Engineering, Chinese Culture University (Taiwan) 1978-1982; Citi-MBA (A Citibank Training School Program supported by Taiwan University), 1991-1992

IN HIS POCKET: 80-GB iPod, Troika watch, Submarine 2-color pen/highlighter,Wu Yin Liangpin business-card holder

Triumph International, Europe’s biggest lingerie manufacturer, hasn’t found it easy to hold onto a good manager in China. Since 1985, when the lingerie provider entered the market under the name Yancheng Body Fashion, it went through six general managers before hiring the seventh, Louis Lin, in 2005.

Not to imply, of course, that it’s all been smooth sailing from there. Lin is positive about the company, which has a total headcount of around 5,000, but bemoans the lack of enthusiasm among staff. He alludes to Herculean feats of micromanagement, asserting that he monitors every employee’s daily progress in his 100-person-plus staff. And he touches on the particularities of managing a staff that is 95% female, informing CIB that women are prone to “jealousy” and “female sensitivity.”

Whatever Lin is doing, it must be right. Business is buoyant as a bustier at Yancheng. The company’s total turnover is around RMB 310 million (USD 43 million); RMB 180 million (USD 25 million) of that from domestic sales. Yancheng produces 6.6 million pieces per year in China, of which half are sold domestically. The company has been growing 20% a year in East China, and dominates most Asian countries except Japan, where it is second to a domestic firm. And it has branches and sales offices in 18 cities in China, with its sales and marketing headquarters in Shanghai.

How long have you been at Triumph International?

I have been here since 2005. [I used to work for British American Tobacco, but] I wanted to move to a company that was slightly smaller and take up something that was more than a job. Working for a big company meant spending too much time playing politics and the real job became meaningless. I was looking for a successful brand to manage and take it to the next level.

Before you moved to Shanghai, you worked for many years in Taiwan. Is the business culture different?

I worked in Taiwan for 17-18 years and I think the business culture is very different. The people’s behavior, mentality, is very different. People in Taiwan are more obedient. However, on the mainland, every day is a challenge because the business environment can change so quickly. Because the environment is unstable, we cannot predict what we will happen. On the mainland, people are more independent from rules and policy, which means that the staff require a lot of micromanagement.

Why is that?

They don’t have the passion. Often the staff see their work as just a job, something to make money, but not something they should care about. They don’t see it as something fun. It’s been challenging and exhausting to change that attitude. We’re in a developing economy, and people have been brought up by family members and don’t have the experience and the exposure to many things. What I may think is common sense, [coming from a] developed economy, is knowledge that needs to be taught here.

But China’s workforce has developed extremely fast over the last two decades.

That is true. In my company, for example, all of our managers are local hires [except me]. In this Shanghai office alone, I have more than 100 people working for me. The workforce in China learns very fast, but it still doesn’t mean that everything is very smooth. I have to monitor their progress every single day. To save myself the headache, I’ve developed tools and procedures to monitor every worker’s daily progress.

Do you foresee a point where you can delegate the work so you don’t have to micromanage?

I can only do this step-by-step. I think to be a successful boss in China, you need to know what to delegate and what not to delegate. Teamwork is by far the biggest challenge. People don’t trust each other; it’s everyone for him or herself, and on top of that, everyone tries to undermine the others. So I always [emphasize] that we all have to work together. I’ve spent the last two years building teamwork and I’ve seen a great change and great results. Building teamwork is an essential ingredient for building a successful business.

What is it like running a lingerie business as a man?

The most important thing is to understand the consumer. You have to love women. 95% of my staff are women. My management style has changed: it is more community centered; it is more caring; women are hurt easily and get jealous easily. I’ve become very good at reading between the lines and understanding female sensitivity. You have to show them you love them. Show them you care. I also do a lot to promote transparency. My focus is on building teamwork; to change the traditional hierarchical structure to a structure that is more project-orientated. I don’t micromanage them everyday, but with the project-based system I’ve set up, I can monitor the results. To do that I have appointed a key staff of 15 people, and they are the ones who control the projects for the 5,000 people in the company. Everyone who is involved in the project must be listed so that the key staff will remember how to work together.

How has the growth in salaries in China affected your business?

My middle managers’ salaries have, on average, increased 30% a year over the last two years.

Has that cut into the company’s profit margin?

No – you have to pay to get good work and service. The clerical workers’ salaries have been going up at the rate of 10% a year. In general, wage raises are going to highly qualified workers. Some people at my company have received up to a 50% raise this year.

In which region is your company showing the fastest growth?

The fastest growth is East China: Hangzhou is showing the biggest growth. So is Jiangsu Province. And Shanghai is of course the capital of luxury retail. Beijing is also growing very fast. But consumer behavior in these regions is different. Shanghainese look for quality and trendiness. They focus on fashion. But the Northerners want to be big spenders. They are looking for the most expensive items. My sales team in the North often tells me that our prices are too low for them to maximize the sales potential.

What is the price range of Triumph products in China?

The most expensive items come in at about RMB 1,000 (USD 138). But anything in the RMB 300-380 (USD 41-52) range is considered a high-priced item. You have to keep in mind that most women spend about RMB 20-50 (USD 2.80-6.90) on a bra. Most of our SKUs [stock keeping units, or distinct products] are priced between RMB 250-380 (USD 34-52).

That’s a steep price tag in China. Have your price points [the price of a good that would return the highest demand] increased in the last five years?

On average, they’ve increased about 5% annually. Our sales have increased anywhere between 15-20% annually.

How have returns been?

[Turnover in East China was about RMB 310 million (USD 43 million)] – a growth rate of about 20% a year. We are definitely the most successful lingerie business in Europe and Asia.

Are there other retailers selling bras at this price?

There are some local competitors who focus on delivering ‘high-priced’ items. But we want to bring our consumers three things: fashion, comfort, and quality. We launch new products every single month to [stay fashionable]. It puts a lot of pressure and challenges on our supply chain management.

Who are your typical buyers?

They tend to be urban, white-collar office workers. We target the buyers who make over RMB 100,000 (USD 13,800) annually.

How do you address the fact that spending power amongst the Chinese has increased dramatically?

Spending has been incredibly strong. What’s very different about mainland women is that they want to take care of themselves when they have money. In Taiwan or Hong Kong, many women buy lingerie to please either their husbands or boyfriends, whereas mainland women, particularly the ones in Shanghai, buy lingerie to please themselves. They think: I have money; I like myself; I want to pamper myself. They don’t want to show up at the health club and be seen in a lousy bra. They would find that shameful.

Do you have a 5-10 year vision for Triumph International?

I want to see our sales double in the next five years. I want sales to grow in the second-tier cities. Still, some of the main issues on the manufacturing side are quality control, worker retention, and salary hikes. Wages for production workers have gone up 60% in the last two years. If we cannot get this under control, we’ll have to move production soon, farther west.

Do you see yourself in China for the long-term?

Before I moved to the mainland, I thought I was Chinese, but the longer I stay here, I feel like a global citizen. The cultural difference is still huge. I often use Confucian doctrines to manage my team. But my bottom line is: don’t cross the line; there are some things that are non-negotiable. I just had to let a sales girl go who had worked for us for 10 years because we discovered that she had manipulated her sales result.

So what is non-negotiable?

Integrity.