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 please subscribe to our podcast where i talk about brand disasters and other brand origin stories you can find us on spotify apple podcast google podcast and on any podcast app and please follow us on facebook instagram and twitter and subscribe to our newsletter 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 it does make a difference and it will help us find more viewers like you until the next episode this is chris garin you