The Complete History of SM : How Henry Sy Became the Richest Man in the Philippines

Summary

The video script narrates the inspiring journey of Henry C, the founder of SM, the largest mall chain in the Philippines. Born in poverty in China, Henry's determination led him to the Philippines, where he started with a small shoe store and expanded to build the SM empire. The story details his challenges, innovations, and the strategic vision that transformed a simple shoe store into a retail giant with a diverse portfolio, including banks and real estate, culminating in his legacy as the richest man in the Philippines.

Takeaways

• 🏢 SM is the largest chain of malls in the Philippines and one of the country's biggest companies.
• 👣 Henry C, the founder of SM, started his journey from poverty in China to success in the Philippines.
• 🚢 At 12 years old, Henry C bravely traveled alone from China to the Philippines by sea to help his family.
• 🛍️ Henry's first business venture was selling cigarettes and scrap metal, which eventually led to the opening of his first shoe store.
• 📈 The growth of his shoe store led to the opening of the first SM store, marking the beginning of the SM empire.
• 👠 Henry C's business expanded rapidly, with innovative strategies such as fixed pricing and air-conditioned stores.
• 🏙️ SM City North EDSA, opened in 1985, was a groundbreaking super mall and a significant milestone for the company.
• 📊 SM went public in 1984, marking the start of its golden age with extensive expansion in the Philippines and overseas.
• 🏦 Henry C's business acumen also extended to banking, with SM later owning China Bank and BDO Unibank.
• 🌏 SM's expansion reached China, with the company building mega malls and becoming a dominant player in the retail industry.
• 💰 Despite his wealth, Henry C's success was built on hard work, determination, and overcoming significant challenges.

Q & A

Who is the founder of SM and what is the significance of his journey from China to the Philippines?

The founder of SM is Henry C. His journey from China to the Philippines is significant because it demonstrates his determination and courage at a young age. He traveled alone at the age of 12 to help his father with the family business, which was a challenging and dangerous endeavor at that time.

What was Henry C's initial business in the Philippines?

Henry C's initial business in the Philippines was selling cigarettes that he bought from American soldiers and then reselling them in Plaza Miranda. He also sold scrap metal and other items he could find.

How did Henry C's first shoe store come into existence?

Henry C's first shoe store came into existence after he teamed up with his grade school classmate, Lao Kang. They pooled their resources to import shoes from the US and started selling them from a small store in Cali Carrierdo.

What was the impact of World War II on Henry C's business?

World War II had a devastating impact on Henry C's business as his stores were completely destroyed during the Japanese invasion and occupation of the Philippines. However, after the war, he saw it as an opportunity to rebuild and started his business anew.

Who was Senen Mendiola and what role did he play in Henry C's business?

Senen Mendiola was an important figure who joined Henry C's business as his accountant. He accompanied Henry on walks around Escaler Street to learn about the competition and gather insights from shoppers and salespeople, which helped in the growth of their business.

What was the significance of the opening of SM City North EDSA in 1985?

The opening of SM City North EDSA in 1985 was significant because it was the biggest mall in the Philippines and one of the biggest in Asia at that time. It marked the beginning of SM's transformation into a one-stop shopping center and the start of their golden age.

How did Henry C's vision for SM evolve over time?

Henry C's vision for SM evolved from a small shoe store to a chain of 50 or more shoe stores, and eventually to a series of supermalls offering a wide range of products and services. His experiences in the US and Europe, where he observed the rise of malls and department stores, greatly influenced this vision.

What was the role of the family in the growth of SM?

The family played a crucial role in the growth of SM. Henry C's wife and children were involved in running the business, with the daughters manning the counters and the sons helping manage stocks. The entire family also had to share one car for transportation.

What major acquisition did Henry C make in the banking sector?

Henry C acquired Acme, a small bank with two branches, for 5 million pesos. This bank would later become BDO, the biggest bank in the Philippines in terms of assets.

How did Henry C's approach to customer experience contribute to the success of SM?

Henry C's approach to customer experience, which included fixed pricing, attractive sales staff, and an air-conditioned shopping environment, contributed to the success of SM by providing a comfortable and enjoyable shopping experience that attracted more customers and increased sales.

What was the significance of the slogan 'We've got it all' in the branding of SM?

The slogan 'We've got it all' was significant in the branding of SM as it conveyed the message that the mall offered a wide variety of products and services, catering to all the shopping needs of its customers. It was later changed to 'We've got it all for you' to make it more personal and customer-centric.

Outlines

00:00

🏢 The Rise of SM and Henry C's Early Life

This paragraph introduces the story of SM, the largest chain of malls in the Philippines, founded by Henry C, who rose from humble beginnings to become the wealthiest man in the country. Born in China, Henry's family was poor, with his father running a shoe store in Manila. At the age of 12, Henry braved a treacherous sea journey to the Philippines to assist his ailing father. Despite the hardships, including language barriers and food poisoning, Henry's determination led him to work in his father's store and eventually attend school, where he excelled academically. The paragraph sets the stage for Henry's journey from selling cigarettes post-World War II to the growth of his shoe store business.

05:01

🛍️ The Expansion of Henry C's Shoe Business and Visionary Moves

The second paragraph delves into the growth of Henry C's shoe business, starting with a partnership with Lao Kang, his grade school classmate, to import and sell shoes, including those worn by American soldiers. The business flourished, allowing Henry to buy his first car and expand his store to become Plaza Shoe Store. The introduction of Senen Mendiola as Henry's accountant marked a strategic phase, with both learning from competitors and customers. Henry's personal life also advanced, culminating in his marriage to Felicidad. Despite the challenges of World War II, Henry's resilience led to the establishment of Shoemart, with innovative practices such as fixed pricing and air-conditioning, setting the stage for future success.

10:02

🏗️ The Transformation of Shoemart and the Birth of SM Supermalls

This paragraph narrates the transformation of Shoemart into a department store and the eventual rebranding to SM, reflecting Henry C's ambition to create a one-stop shopping experience. The move to Makati, despite initial skepticism, proved visionary as the area developed into a major business district. Henry's business acumen led to the acquisition of ACME, which later became BDO, the largest bank in the Philippines. The opening of SM City North EDSA in 1985 marked a new era in Philippine retail, with the mall becoming a massive success and setting the foundation for SM's expansion across the country and overseas.

15:03

🌟 Henry C's Legacy and the Future of SM

The final paragraph reflects on Henry C's legacy, from his humble start as a 12-year-old with only 10 cents to becoming a billionaire. It highlights his passing in 2019 and the impact he had on the retail landscape in the Philippines and beyond. The paragraph also touches on SM's continued growth, with numerous malls in the Philippines and China, and its ventures into banking and other industries. The story concludes with a tribute to Henry C's enduring spirit of hard work and determination, which continues to inspire the SM brand.

Keywords

💡SM

SM refers to 'Shoe Mart', which is the brand that evolved into the SM Group of Companies, the largest chain of malls in the Philippines and one of the country's biggest companies. In the video, SM is central to the story of its founder, Henry C, and his journey from a small shoe store to a retail empire.

💡Henry C

Henry C, also known as Henry Sy, is the founder of SM and the narrative's central figure. Born in China, he moved to the Philippines at a young age to help his father's struggling shoe store. His entrepreneurial spirit and business acumen led to the creation of the SM empire, making him one of the richest men in the Philippines.

💡Philippines

The Philippines is the geographical context of the video, where Henry C's journey takes place. It is the country where SM originated and expanded, becoming a significant part of the nation's retail and commercial landscape.

💡Entrepreneurship

Entrepreneurship is a key theme in the video, highlighting Henry C's journey from a young boy with limited resources to the founder of a major corporation. His ability to identify opportunities, take risks, and innovate in the retail sector is a central part of the story.

💡World War II

World War II had a significant impact on Henry C's early business, as it led to the destruction of his stores. However, it also presented an opportunity for him to rebuild and innovate, which is a critical turning point in the narrative of his success.

💡Shoe Mart

Shoe Mart was the original business venture of Henry C, which started as a small shoe store and eventually grew into a chain of shoe stores. It is the precursor to the SM brand and a stepping stone in the development of the SM empire.

💡Mall

Malls are a central concept in the video, representing the evolution of Henry C's business from a single store to a multi-store retail complex. The video discusses the creation of the first SM mall and the subsequent expansion of the SM mall chain across the Philippines and into China.

💡SM City North EDSA

SM City North EDSA is a landmark mall in the SM portfolio, which opened in 1985 as the largest mall in the Philippines at the time. It symbolizes the transformation of the SM brand into a major retail developer and the beginning of the 'super mall' era in the Philippines.

💡China Bank

China Bank is mentioned in the video as the bank that provided a significant loan to Henry C, which helped him expand his business. It is also notable because the SM Group later acquired China Bank, illustrating the diversification and growth of the SM conglomerate.

💡BDO Unibank

BDO Unibank is the largest bank in the Philippines in terms of assets and is part of the SM Group. It originated from the acquisition of a small bank called Acme by Henry C. The inclusion of BDO Unibank in the SM Group showcases the company's expansion into the financial sector.

💡Makati

Makati is a significant location in the video as it is where Henry C saw potential for business growth and decided to open a Shoe Mart branch despite initial skepticism. The decision to invest in Makati, which later became a major business district, demonstrates Henry C's foresight and business strategy.

Highlights

Henry C, the founder of SM, started with humble beginnings, selling cigarettes and scrap metal after World War II.

His first business venture was a shoe store, which later expanded into the SM brand.

Henry C's innovative approach included fixed pricing and hiring attractive saleswomen, similar to airline stewardesses, to attract customers.

The transition from a shoe store to a department store model led to the rebranding of 'Shumart' to 'SM'.

SM introduced air-conditioning in its stores, providing a comfortable shopping environment and encouraging longer stays.

Henry C's vision included building a chain of 50 or more shoe stores, inspired by his travels in the US and Europe.

SM City North EDSA, the first super mall in the Philippines, was built on a former swampland, showcasing Henry C's ambitious vision.

The success of SM malls led to an expansion across the Philippines and into China, establishing SM as a dominant retail force.

Henry C's business acumen extended to banking, with SM later owning China Bank and BDO Unibank, the largest bank in the Philippines.

SM's growth strategy included taking advantage of challenging economic times to secure properties at lower costs.

The family-run business model involved all of Henry C's children in various aspects of the company's operations.

SM's expansion into China began in the 1990s, with the construction of mega malls that further cemented its retail dominance.

Henry C's personal journey from being a poor child with 10 cents to becoming the richest man in the Philippines is an inspiring tale of determination and hard work.

SM's branding included a memorable jingle that evolved over time to reflect its growing product range and customer focus.

The company's commitment to innovation is evident in its early adoption of fixed pricing and its focus on the customer shopping experience.

SM's early success was built on a foundation of hard work, strategic partnerships, and a keen understanding of customer needs.

Henry C's legacy includes a significant impact on Philippine retail and economic landscape, with SM becoming a household name.

Transcripts

this episode is made by partisan we have

a big hitter today and it's been long

overdue but i'm finally gonna talk about

sm if you're not from the philippines sm

is the biggest chain of mall in the

country and is one of the biggest

companies in the philippines

in this episode you'll learn about the

inspiring react surgery story

of the late henry c who was the richest

man in the philippines when he was still

around i'm going to talk about his

journey from china to the philippines

how he started selling cigarettes right

up to when he opened his first shoe

store

the growth of his shoe store the opening

of the first sm ball

and the golden age of sm basically the

complete history of the sm empire

hey everyone this is chris guerin and if

you're new here welcome to brand origins

where i talk about the world's most

valuable brands

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the sm story revolves around its founder

henry c

and hendrick's journey begins in china

henry c

was born in shaman in fujian china henry

c's family

was incredibly poor at that time and his

father was running a shoe store in

manila and everything he earns in manila

he would send it back to support his

family in china

keen on helping his father out henry c

decided to travel to the philippines

what's amazing is traveling from china

to the philippines meant that

he had to do so by sea and these trips

were long and grueling

to paint the pictures to how frightening

this must have been for the young henry

c

henry c was only 12 years old and he had

to travel by himself

thus he didn't speak english or tagalog

and remember that this was around 1936

so it's not like the day where you

travel and you arrive at another country

where you can just book an uber and

check google maps so that you don't get

lost

no henry c just had a ton of uncertainty

ahead of him

and for a 12 year old for him to brave

something like that

that's quite impressive i mean he was 12

years old when i was 12 years old

my biggest struggle was how to convince

my parents to allow me to get a pet

hamster

but i digress as if this trip couldn't

get any worse

hendersi actually experienced a bit of

food poisoning during this journey

so henderson only brought 10 cents with

him and he used this to buy bread

which wasn't really in its freshest

state as soon as henry c arrived in the

philippines his next objective

was to head to his father's store and

since he didn't have

any money left he had to go there on

foot and it was a three kilometer walk

he just kept asking around for

directions but honestly i'm not sure how

he did that since he didn't speak

english or tagalog when he did find his

father's store

it was heartbreaking henry c just wept

because

he saw the situation that his father was

in he saw the state of his father's

health

he saw how frail he was and he saw how

small the store was

the store was just around 2 square

meters big and that's where his father

would sleep as well

but henry knew exactly why he was there

he was there to help his father and so

he went to work every morning he'd go

with his father to the visorya that's

where he

and his dad went to to get the goods

they'd sell for the day during the day

henry was the one calling out the

customers drawing them to the store

and as soon as his work day ended since

there was no space

the stores counter where they put the

goods they were selling he would clear

this

counter and that's where he would sleep

on eventually they were able to earn

enough for him to go to school

and he enrolled at the anglo-chinese

school in kyapo henry wanted to get

ahead and so he asked his teacher what

he needed to do to graduate faster he

told him that he needed to reach a grade

of 90.

and henry determined as always he

finished grade school in

5 years and as a valedictorian henry was

motivated to get ahead

eager to have a better life and he did

what he could but then

sadly some things are just out of our

control

around this time world war ii broke up

and the japanese invasion of the

philippines began

japanese occupation of the philippines

began in 1941 and ended in 1945.

manila was the second most damaged city

in the world

and when the americans were bombing the

ayala bridge henry was injured by

shrapnel but he'd make a quick recovery

however the war did deal a crushing blow

to their stores which were completely

destroyed

but now the war was over and despite the

crushing blow to his morale harry said

you that this was his chance to rebuild

so he gathered all his savings which

were a couple hundred pesos and started

buying packs of cigarettes from american

soldiers

he would then sell these around plaza

miranda and make a profit of 1 peso per

pack

aside from this he was also selling

scrap metal and just about anything he

could get his hands on

this racket did well enough for him to

rent a small space in cali carrierdo the

store was bigger but it was pretty much

the same setup where he'd sleep on the

counters after store hours

so you know what they say about hard

work and luck if you work hard

luck meets you halfway well hard work

brought henry c to this point where he

now owns this small store

and luck was about to meet them halfway

a man approached henry c

this man was importing shoes from the us

he was a wholesale supplier of shoes

a lot of these shoes were shoes worn by

american soldiers

oh and these are combat boots but

they're not the combat boots you have in

mind now that look like they can break a

skull

no world war ii combat boots actually

look very classy and fashionable

so now henry c got excited about this

opportunity but he didn't have enough

capital so he teams up with a guy named

lao kang his grade school classmate

together they pulled all their money and

got their first creative shoes

and so they start selling these shoes

from their small store and so far

this becomes henderson's biggest payday

because sales were just exploding

and he actually earns enough to afford

to buy his first car

the business started growing and so they

leased some more space this store became

the plaza shoe store

no this isn't shoe mart just yet but

we're getting there

in 1949 an important figure comes along

his name is

senen mendiola mendiola was brought in

as henry's accountant

cenan mandiola would go along with henry

c during his walks

they'd go around the shops at escalator

street and these walks weren't just to

unwind

they were doing this to learn about the

competition they were basically scouting

other stores that were popping up around

the city

and learning from them both henry c and

sin and menyola would talk to shoppers

about what they liked and what they

didn't like about these stores

and they'd also try to get insider

stories from the sales ladies

they then opened up their second store

the park avenue store

this one was bigger than their first

store and it was actually around this

time when henry c got his first loan

it was a million peso loan from china

bank which is of cool because sm would

later on

own china bank so i guess it goes full

circle things weren't only doing well in

business

hennessey's dating life was reaching new

heights as well on march 30

1950 henry c married felicidad at the

san miguel church

henry met felicidad when she was 16 and

she was a shoelace vendor and her dad

was actually also running his own shoe

store

but then that story would end up closing

because of shoe mort's dominance later

on

when henry was around 28 years old he

started studying commerce in the far

eastern university

but then he only ended up finishing two

years because there was just too much

work to be done running his stores

around 1954 henry c and his first

business partner lao kang

decided to dissolve their partnership

i'm not sure why they did that but they

both split up the branches their

enterprise owned

henry wasn't satisfied with what his

shoe store was able to achieve

he wanted to learn more about how to

take things to the next level

and so in 1955 he took a trip to the us

initially the goal of this trip was just

to get more suppliers in america

but while he was there he started taking

notes on how the customer shopping

experience was in the u.s

because over there malls were on the

rise so he would go to these malls

and he would start studying chains like

macy's sears and jcpenney

these three were department stores that

were doing really well in the u.s

after america henry traveled to europe

to learn about the latest fashion trends

during this whole trip he was taking

photos of how the stories were set

up how their ad posers looked like how

their staff were dressed noting down

what they had that the shops in manila

have yet to have

it was at this point when his vision

became clear and clear

going back to the philippines his goal

was set to set up a chain

of 50 or more shoe stores and so in 1958

he partnered up with francisco chong and

ran a store called the tiger bazaar

which they would later rebrand into

shumart

completely wiped out competitors henry c

applied everything he learned from his

trips in the u.s and europe

schumart was one of the first stores to

be air-conditioned and the primary

reason was so that customers would feel

like they are in america

plus cooler rooms meant that people

could shop longer enjoy being at the

store

and feel comfortable as they went around

henry c

also noticed that in the u.s the sales

ladies were generally attractive

and drew similarities to the beautiful

airline stewardesses

and so he hired and trade women that did

the same and another thing that was

considered as innovative at that time

was that at schumart there was fixed

pricing

normally at that time you could haggle

down prices and negotiate for a better

price and if you're not good at

negotiating you could end up feeling bad

about not getting a better deal

but at schumart the prices were fixed

and so he didn't have to worry about

haggling

basically all these tactics resulted in

a superior customer shopping experience

and happy customers bring in more sales

and not long after

henderson opened a second shoemart

branch despite the success of the two

shoemart branches henry c

was already on the lookout for new

opportunities and there's this one

particular area that he was feeling

really good about

the city of nagatpi the makati area used

to be where the nielsen airport was

but plants were already set to convert

the runways into roads and deter it into

a major business district

manila was getting congested and

henderson knew this he knew that at some

point

new centers will start to develop and

makati was one of them

he tried to convince his partner

francisco chong to open a store in

makati but chong didn't want to

and so they decided to dissolve their

partnerships splitting their own

properties

chong got the shoe mart in rizal avenue

and he would later rename it to shoe

world since as part of the deal henry c

retained the rights to the shoe mart

name

as well as the branch in cardo confident

about his bet on nakati's growth

hennessy opened shumart makati in 1963.

henry c spears were quite skeptical on

heresy's plans in makati they just

didn't see it turning out well

and they were indeed right in the

beginning because marathi didn't

necessarily become the country's hot

spot overnight

development takes years so all schumer

had to do was to make it through

and that's why when shumart marcati was

opened the whole family was now involved

in running the business

henry c and felicidad had six children

teresita

elizabeth henry jr hans herbert and

harley

the two girls would man the counters and

the guys would help manage the stocks at

the back at the warehouse area

it's also cool to know that the family

only owned one car

and so they had to cram themselves in

one car together as they drove back home

at the end of a tiring

workday other schumart branches were

opening as they were growing shumar at

makhati

shumar kobao opened in 1967 at the

manila royal hotel shoe mart in 1969

but with shumar nakati hennessy decided

to switch things up a bit

instead of selling only shoes he added

more products

this essentially turned it into a

department store the same model

as the macy's and jcpenney brands in the

us because of the switch from a shoe

store to an everything store in 1975

schumart rebranded to sm switching from

shoes to selling everything was a big

move for henry c

but he made a couple more major moves in

this period

it was around 1975 when henry c acquired

acme

a small bank with two branches for 5

million pesos

the small bank would later on become bdo

the biggest bank of the philippines in

terms of assets

he also doubled down on his bet on

nakati when he started putting up

buildings on the lands he leased out in

the makati area

he turned these buildings into rental

properties and with that

henry c has positioned himself for

growth and boy did growth come

all these properties were in the present

day makati central business district the

presently financial capital of the

philippines

sm hati was the company's flagship store

too many this would have been it

this would have been the peak of henry

c's career but to henry c

this was just a testing round and his

experiment proved that filipinos were

hungry for more places like s and makati

the country didn't have the balls that

america had yet and americans were going

crazy about their balls there

and the success of esa mercadi proved

that us filipinos we wanted the same

thing

and now henry c could just imagine what

would happen if he built the first super

malls here

this is when he first comes up with

plans to build a super mall

a multi-level wall with hundreds of

stores with all the brands from around

the world where you could get

everything you needed all in one place

and so he saw the potential of this area

at the junction between edsa and north

avenue

he saw that if a mall was put up there

it would be the place where commuters

would go for the last stop

shopping before they headed home but

henry c was faced with a daunting mix of

challenges

this area was a swampland and it'll be

difficult to build on

plus this was around the last few years

of dictator former president

ferdinand marcos just right before the

height of the edsa revolution so

investors were fleeing the country

because of the economic stagnation of

the philippines

and the uncertainty of the business

landscape where interest rates were as

high as 45 percent

i remember one time tessie c henry c's

daughter talked about how her father

takes advantage of challenging time so

that they can ride the upswing when

things get better

and this was perhaps the perfect example

of when henry c did just that

other businessmen labeled henry's

ambitions to build a small as the gamble

that causes his downfall

but he didn't really give any attention

to any of that and in 1985

sm city north edsa opened with the gross

floor area of 120 000 square meters this

was the biggest mall in the philippines

and one of the biggest in

asia it had a food court it had cinemas

an appliance center

everything this kick started the rise of

sm as becoming the one-stop shopping

center and this is also the time when

they introduced the we've got it all

jingle but

fyi it's not until 1991 when they would

switch from we've got it all

to we've got it all for you after sm

city north edsa

sm was unstoppable sm went public

in 1984 which started its golden age sm

built more malls in the heart of the

country's capital

expanded to other provinces and began

overseas expansion in china

by 1991 as a mega mall was put up in the

1990s

sm started building malls in china and

in 2006 sm built what would become the

biggest mall in asia at that time

sm mod of asia sm's current biggest mall

is smt tianjin

opened in 2016 and has an area of over

320 000 square meters and of the seven

biggest malls in

asia sm owns four of them today sm has

taken every major industry you can think

of

as of 2019 they have over 72 malls in

the philippines and seven in china

and they own china bank and bdo unibank

the biggest bank in the philippines

on january 19 2019 henry c passed away

peacefully in his sleep

knowing that he was the richest man in

the philippines for most of his life

it's easy to forget the struggles he had

to go through to get to that point

henry has always said that everything he

has achieved did not happen

overnight never forget that the man who

was worth 19 billion dollars

was once a hungry kid with 10 cents with

him

alone in a ship afraid but determined to

work hard

in the face of uncertainty

[Applause]

and so that's about it guys now you know

about the brand origin story of henry c

and sm if you liked this episode you

might also enjoy our episode about the

ayala corporation and about the history

of mercury drop

don't forget to subscribe to our podcast

and please tell your friends about brand

origins

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help us find more viewers like you

until the next episode this is chris

garin

you