[Big read] Luen Thai Group deputy CEO Jeffrey Tan: Continuing a 60-year legacy of integrity and diligence

“I think very little about anything outside of work. Basically, any family member who comes into the business and works here also thinks very little about things outside of work.”

Hong Kong-based Luen Thai Group, which owns the China, Southeast Asia and Korea operations of footwear and apparel brand Skechers, is celebrating its 60th anniversary this year. In a recent interview with Lianhe Zaobao, the group’s third-generation leader and deputy CEO, Jeffrey Tan, spoke about the business and succession, and highlighted the reasons behind the company’s enduring vitality.

Luen Thai Group was founded in Hong Kong in 1965 by Dr Tan Siu Lin. Over the decades, it has grown into a conglomerate spanning manufacturing, retail, tourism, fishing and real estate. Among these, retail has been a key driver of the group’s development.

Jeffrey Tan, Dr Tan’s eldest grandson, joined the family business in 2004. Starting in 2008, he helped Skechers establish its retail and supply chain system in China, and in 2021 he became the group’s deputy CEO. As of the end of last year, Skechers had opened nearly 3,500 stores across mainland China, making it the third-largest sports footwear brand in the Chinese market.

Tan said Luen Thai’s first pot of gold was actually earned in the Philippines. The business later moved to Guam and Saipan in the US, then returned to Hong Kong, and eventually back to mainland China. The reason the family business has been able to stand firm across such vast spans of time and geography, he said, lies in its consistent corporate culture of integrity and hard work.

Reflecting on over 20 years in the family business, Tan remarked that when he returned from overseas finance, he already possessed strong comprehension and analytical skills. But from his grandfather and uncles, he came to understand resilience, gained invaluable experience, and expanded his horizons. “The platform my family built has indeed given me a lot.”

Integrity and diligence were his grandfather’s personal motto — they are both a defining family value and the most important value of Luen Thai. “If you ask what makes Luen Thai unique, I think it’s the way our family ethos and the company are bound together, and how the company in turn is deeply connected to society.”

Given this close link between family and enterprise, talent selection becomes especially critical. One must “promote the capable without avoiding relatives” while avoiding favouritism — balancing family ties with workplace harmony is no small test.

Tan has his own principles when it comes to people. “Family or not, they must be low-key and grounded. If someone’s conduct isn’t steady and modest, they might not fit into our family.”

What about younger relatives with flamboyant, attention-seeking personalities? He laughed and said: “Not every family member will work in the family business.”

His grandfather and father once set three conditions for younger family members who wished to join the company: they must have worked outside the family business for at least three years; they must have clear focus and expertise in a specific industry; they must be recommended by an uncle.

And even that is not enough. When a younger family member returns to the business, they have to be evaluated by a “council of elders”, consisting of uncles and several trusted senior relatives.

In 2004, after three years in investment banking, Tan was “summoned” back to Luen Thai by his father and uncle because the company was preparing for a public listing.

For someone with an investment banking background, handling the listing process was “very straightforward”. What was truly difficult was real industry work: managing upstream and downstream operations, sourcing materials, planning production schedules, allocating workers, controlling quality… Compared with the numbers game of investment banking, the challenges of textile factories and supply chains were far more concrete, requiring the ability to endure hardship.

To understand the business, he who was born with a silver spoon in his mouth first spent four years working in the factory in Dongguan.

The training to endure hardship had, in fact, begun much earlier. During his secondary school summer holidays — in the kind of scorching heat where “you could fry an egg on the pavement” — his father would bring him to tour factories in Panyu and Dongguan. Meals were taken at the staff canteen, never in hotels.

Tan said that Luen Thai moved from textiles into retail, started the Skechers business, and later introduced other brands. His advantage over other retail operators comes precisely from his understanding of factories, much of it gained from those four formative years.

“Because I spent so much time in the factory, I have a very clear sense of garment costs. I’m more sensitive to supply chain dynamics, and I know how to leverage factory capabilities to help retail respond quickly and manage inventory.”

Now in its third generation, the group continues to stay rooted in textiles and apparel. When asked why he does not pursue more glamorous emerging industries, Jeffrey Tan replied: “Do what you’re good at.”

He explained with an analogy: “If I’m a Chinese-food chef, I’m not going to switch to Western cuisine just because it’s more profitable. Every industry has its own accumulated know-how. Supply chain and retail are the cards our family holds, and we must make full use of them.”

But that does not mean being weighed down by history or sticking rigidly to old ways. In recent years, Tan has aggressively pushed for the transformation of Luen Thai’s garment manufacturing operations, spearheaded the “industry-upgrade” of the group’s Dongguan industrial park (upgrading and transforming old factories), and also promoted the retail business to “bring brands in and go global”.

After reconstruction, expansion, and upgrading, the Luen Thai Dongguan Industrial Park will expand from the current 240,000 square metres to 500,000 square metres, becoming a first-class industrial park in the Greater Bay Area.

Tan said the purpose of “industry-upgrade” is mainly to attract international design talent. The park now includes design studios and supporting lifestyle facilities. “Fashion design is an art that requires inspiration. We need to make Dongguan a place where design teams from Korea and the US can actually stay.”

He advocates a tech-style flat management structure. “Luen Thai is bold in talent management — we’re not conservative; we give people space. There’s no ‘big boss’ here. If you have ideas, speak up. I’ll listen; and if I disagree, I’ll debate with you.”

As for how to bring the family business to new heights in his generation, he believes the major opportunity is exporting China’s manufacturing expertise overseas.

“China has a powerful supply chain and strong products. What it lacks is understanding of overseas markets and distribution channels — and that is exactly what we have.”

In its earlier years, Luen Thai’s textile factory in the Philippines employed 40,000 people at its peak, making it the largest garment manufacturing employer in the country. “We have deep connections and understanding of Southeast Asian societies.”

Today, many Chinese companies want to expand overseas and shift their supply chains to Southeast Asia. However, Tan said the difficulty lies not in the factories, but in navigating complex government relations and social networks, which is where Luen Thai has an advantage.

In 2019, Luen Thai formed a joint venture with Anta Sports, with Luen Thai responsible for Anta’s sales in Southeast Asia. “Anta has very strong product capabilities, but we are more familiar with local networks and have many overseas resources. This is crucial for Chinese brands going global.”

On Skechers, he is optimistic about Southeast Asia’s e-commerce potential. The region currently records about US$300 million in annual sales, with e-commerce accounting for less than US$60 million. “If we bring China’s e-commerce expertise there, doubling that figure won’t be a problem.”

The conversation with Tan was held while he was on a work trip in Thailand. He spoke quickly and fluently, in a down-to-earth way. Even through the screen, he came across as warm and personable, addressing me by name after each point, like a familiar friend.

“Diligence” and “frugality”, written in his grandfather’s family precepts, are among the company’s core values and words that Tan mentioned repeatedly. Most of the time, he wears Skechers from head to toe, and says he does not really have a rich leisure life. “Managing my work, the extended family, and my own little family already leaves no extra time, so I don’t think about painting or writing poetry.”

He said his grandfather Dr Tan was born in 1930 and left China at the age of 16 to make a living. Hard work then was not about building a business, but about survival, which is why Dr Tan emphasised frugality. In Tan’s own generation, this value has been carried into the business: “We hold money very tightly.”

The Luen Thai family gathers for a weekly dinner, about 40 people including the children. All the children can memorise the family creed: “Be loyal in conduct and diligent in managing the household. Be filial to your parents; let elder brothers be kind and younger brothers be respectful. Cultivate oneself, set goals, strive and strengthen oneself. Work in unity to build our enterprise. Serve society and honour our ancestors.”

Tan has three daughters. When asked how he raises them, he said some traditions are preserved — such as living simply and frugally — while others have been softened, such as the requirement that the younger generation must train in the factories.

As the successor, he does not believe his children should necessarily enter the family business. “The world is changing too fast. Years ago, no one imagined that virtual reality could become an industry, or that gaming could become an industry. I hope my daughters will have the chance to study different things and pursue what they are interested in.”

Dr Tan Siu Lin is a well-known philanthropist. Since the 1980s, he has established the Tan Siu Lin Foundation in multiple locations, embedding the principle of “giving back to society” into the company’s culture.

Today, that spirit is carried forward by the third generation. Dr Tan’s granddaughter Jennifer Tan is executive vice president of Luen Thai’s S.A.I. (Sea, Air and Island) Leisure arm, as well as chief administrative officer in the Chairman’s Office of Luen Thai Group Limited, and Executive Director of the Tan Siu Lin Foundation.

After working for nearly a decade in the US hotel marketing industry, she returned to the family business in 2017 to consolidate resources for tourism and hotel development. She helped establish S.A.I. Leisure and successfully led it to a mainboard listing in Hong Kong in 2019.

She says her 95-year-old grandfather still cares deeply about the business, but devotes most of his time to philanthropy. “What moves me most about Grandpa is that even when he couldn’t afford three proper meals a day, he still had a charitable heart. Before he ever went abroad to make a living, he was already thinking that if he ever earned money, he would come back and help society.”

Dr Tan often said: “Where the business develops, philanthropy follows.” In step with the group’s expansion, Luen Thai’s charitable projects now span mainland China, Hong Kong, Saipan, and Guam. He is especially passionate about education, having long supported institutions such as Peking University, Huaqiao University, and Quanzhou No. 1 Middle School. In Hong Kong, he donated to establish Po Leung Kuk Stanley Ho Siu Lin Primary School, and he has set up scholarships at the Chinese University of Hong Kong, Hong Kong Baptist University, and City University of Hong Kong.

“Grandpa works tirelessly in business, and he works just as tirelessly in philanthropy.”

This tradition of giving has been passed down to the next generation. Jennifer Tan initiated “Luen Thai Charity Month”, which has been held for three consecutive years. Each May to June, she encourages employees across the group’s global offices to set aside one or two weekends to visit elderly homes or spend time with children with special needs, participating in charity through direct action.

Living simply yet helping others generously is imprinted in the family’s DNA. Jennifer Tan also teaches her children the same values — even though the family is well-off, the younger brother still wears the shoes passed down from the older brother. “As a third-generation member, I must pass these values on to the fourth generation, continue shaping our family culture, and build Luen Thai into a company that is warm-hearted and socially responsible.”

This article was first published in Lianhe Zaobao as “联泰集团第三代陈孝殷：诚信勤奋传承一甲子 助中企出海东南亚”.

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