Kwang Poon
Prologue
In this paper – which aims to be instructive and academic in nature – I shall attempt to demonstrate how certain aspects of the ‘Laboutik Sinwa’ (Chinese Shop abbreviated as CS) correlate to modern business practices as taught in the top business schools around the world.
As is the case with numerous Sino-Mauritians, my grandparents ran shops and in my case, both my paternal and maternal sides had shops.
My paternal grandfather used to have a shop in Plaine Verte while my maternal great-grandfather had his main shop in Chinatown, Port Louis. In fact, Mr Lim At Cham was quite successful and even managed to open several shops in Bel Ombre, Rivière des Anguilles, Bon Accueil. Beau Champ, to name a few.
As competition grew, the main shop in Chinatown started offering Traditional Chinese Medicine. In addition to herbs, cockroaches, scorpions, snakes and other such likes were at times part of the prescription.
As a child, I used an inordinate amount of time sitting on the tall bar stool observing the ins and outs of my grandfather’s shop. It was not uncommon for me to have the chance to speak some French and English to tourists who were visiting Chinatown and made a stop at the Chinese store for chinoiseries and other such curios.
KYC: Know Your Customer
Based on a relationship of proximity with his client, the shopkeeper knew his customer inside out and could thus assign a credit score.
This close relationship was developed thanks to the proximity and ubiquity of the CS.in every village and at every street corner in some parts of towns.
The network of CS covered almost every neighbourhood across the island and the business at human scale was conducive for social interaction. Thus, the shopkeeper not only knew the head of the family, but all the family members as well as all the important events and dates for the family.
Indeed, at every occasion, be it an anniversary, a wedding or even a funeral, the shopkeeper was called upon to supply the necessary items.
Without AI ChatGPT, Google or social media, the shopkeeper used his flair or nose, if not his ears and eyes, to perform KYC. It was a push-pull two-way community information process to evaluate and ‘onboard’ a new client.
The KYC process of the CS worked pretty well since the majority of clients cleared their tabs but a few bad payers had to be blacklisted.
Microfinance and the Little Red Book
There was a time that most of the customers were labourers working in sugar estates. Thus, they were paid only after harvest. In the meantime, to make ends meet, the household depended on the Microfinancing Scheme which offered loans without any collateral.
To keep tracks of purchases, the shop owner kept a Little Red Book for each household and painstakingly recorded all transactions.
Today, similar Microfinancing Schemes are offered by financing institutions to assist countless people and SME around the world.
Good things come in small packages
As a good businessman, the shopkeeper noted that the purchasing power of the majority of his clients was not very high.
Therefore, the shopkeeper had to price items within the affordability range of the client. Thus, cigarettes were sold by the unit. Similarly, whole dried salted fish was cut and sold by piece. Even a bar of soap was cut into pieces and sold in smaller units.
This practice has been taken up in modern times by certain industries. For instance, Li Wan Po introduced the 200 ml juice pack in addition to its standard 1L format. This allows schoolchildren with limited pocket money to enjoy its flagship Sunny fruit juice.
Similarly, telecom operators offered small recharges of one dollar or less to prepaid customers in order to drive up penetration rate.
Group procurement and best practices
Groups of shopkeepers were often relatives or belonged to the same clan. This offered certain advantages. First the shopkeepers from the same clan met weekly at the Clan Club or Kwon in Port Louis when they would come down to the Capital to restock their supply.
Around a game of mahjong which sometimes lasted till the small hours of the night, they would tell stories and thus exchange best practices. In that fashion, business intelligence regarding new products, good deals, emerging market trends and other business tips were shared and propagated.
Through the good entente among shop owners of the same clan, it was easy and natural to carry out Group Procurement in order to leverage the strength of numbers in order to get the best deals.
Today the hotel chains and certain restaurant chains apply Group Procurement to optimise costs.
Optimising the supply chain
After the goods were delivered to the Kwon, the club doubled as a temporary storage space before the merchandise was dispatched to the shops in the countryside. If shops were located on the same route, transportation costs could thus be split. In MBA jargon, we talk about Optimising the Supply Chain to reduce logistic costs.
As a matter of fact, the network of CS around the island came to play a vital role during the Second World War. The colonial administration noted that the Chinese Chamber of Commerce (CCC) regrouped most of the CS under its umbrella.
Therefore, in order to ensure an orderly distribution of basic necessities such as rice, flour, oil, salt and sugar, the network of CS under the CCC was put to good use during the period of rationing.
At that time, the CCC had several regional branches to facilitate the management of its nationwide network. Jean Etienne Moilin AH-CHUEN was the President of the CCC during this crucial period and illustrated himself by ensuring the orderly distribution of essential commodities to all households around the island.
Strategic product placement
As a kid, I remember accompanying my father or mother to the CS. As a psychologist, the shopkeeper knew fully well that the parent would have difficulty refusing a little treat to his or her child.
Therefore, he would strategically place a variety of goodies in glass jars right on the main counter. Inside the counter at eye level of the little kid, he would also place tantalising treats targeted at kids.
Today, this product placement strategy has been adapted by supermarkets. Goods that supermarkets wish to promote are placed right at eye level on the shelves to maximise sales.
Add value and provide convenience
As the standard of living started improving, the discerning shopkeeper noted a niche for a mini-bar. Chinese food is generally well appreciated and goes down well with a drink.
It was a natural evolution for some shops to have a bar corner or convert their backyard into a snack bar. Usually, the spouse was responsible for concocting the favourite dishes of the clients.
In the same vein, the CS would offer the famous ‘dipain cari’ which is typically a round bread filled with a dish on the menu of the day. Some classic fillers include tuna salad, potato salad, fish salad, roasted chicken, sardines or simply butter with cheese and so on.
In Mauritius, the ‘dipain cari’ precedes the burger and was the bread and butter of the masses, so to speak.
Employee motivation, Stock Option, and franchising
If the CS can be classified as a family-run SME, with the husband at the counter and the wife and children lending a hand, it was sometimes necessary for the shop owner to hire some shop assistants.
More often than not, the shop assistant was recruited via the Kwon network. Sometimes, the shop owner would even arrange for a cousin or uncle from the same village to come and lend him a hand to run the business.
At times, the shop assistant demonstrated a knack for business. Should an opportunity arise, the shop owner would open another shop and make the talented shop assistant the manager.
Taking this idea a step further, if the ‘new subsidiary’ was well-run, then the shop manager also became a shareholder.
High technology startups in Silicon Valley are well-known to apply Stock Options to attract the best talent. We note that the scheme is not much different from the employee motivation scheme adopted by the CS.
In order to seize opportunities, some successful shop owners applied something akin to franchising to speed up expansion.
Epilogue
Working in a CS was not an easy job. It was certainly not a cushy 9 to 5 job but was more like a 24/7 operation. Even after closing late at night, the shop owner left a window open in case a client required to make an emergency purchase. The same would apply during public holidays when other businesses and offices were closed but the CS kept operating. The CS was thus providing a service similar to what convenience store chains such as 7-Eleven are currently doing worldwide.
Given the hardships endured by the shopkeepers, they aspired for a better future for their children. Thus, the new generation opted for liberal professions in medicine, law or accounting.
Some even pursued their studies by enrolling on MBA programs at prestigious business schools around the world. During the course of their studies, they find out that many of the business concepts and best practices were already practised by their parents in the CS, albeit without the terminology. As the pivot of the microcosm of the Mauritian society, CS was not only a School of Business, but a School of Life.
As a kid, I remember accompanying my father or mother to the CS. As a psychologist, the shopkeeper knew fully well that the parent would have difficulty refusing a little treat to his or her child.