Each of them is family owned. The Fung, Ambani, Torii, and Lim families respectively control their business empires across Asia, collectively worth over US$116.4 billion. As Asia plays an increasingly important role in the world economy, the future of international markets will likely be shaped in no small part by the decisions of Asia’s major family owned firms.
When one thinks of the term ‘family firm’, the image of a neighbourhood family-run restaurant or sundry store comes to mind. Mom and/or Dad are behind the counter, while the children help out with stacking shelves or washing dishes.
In fact, just over half of the 30 biggest firms in 27 developed countries are family-owned, as are 40 percent of the S&P 500 in the United States. Around 85 percent of businesses in Southeast Asia valued at US$1 billion or more are founder- or family-run; in India, that figure stands at 67 percent, while in China, it is 40 percent. The 15 wealthiest families in Hong Kong control assets worth 84 percent of Hong Kong’s GDP; in Malaysia, they control 76 percent, and in Singapore, just under 50 percent.
These patriarch-led businesses drove Asia’s post-colonial economic boom, yet many of these organisations face great challenges. Succession, technological disruption, and family disputes are among some of the issues that these firms must navigate. These challenges apply equally to businesses big and small; whether it is the family-run corner store, or a powerful conglomerate.
WEALTH BEYOND THREE GENERATIONS
There is a Chinese proverb which says, “Wealth never survives three generations” (富ä¸è¿‡ä¸‰ä»£). It sums up a widely held belief across Asia: the first generation builds the family fortune, the second reaps the benefits, and the third squanders the wealth.
This story is from the February 2020 edition of SME Magazine Singapore.
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This story is from the February 2020 edition of SME Magazine Singapore.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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