After three decades in the real estate sector, Eric Wo from Savills has plenty of advice to offer British companies looking to succeed in the Chinese market. Tom Pattinson sat down with him to find out more about his business experience
When I sit down to speak with Eric Wo, Managing Director of Savills North China, he is dapper in a crisp white shirt and dark suit despite the heat of the Beijing summer. Traditional Chinese paintings and scrolls with ink-painted calligraphy adorn the walls behind him.
Eric Wo was born in Hong Kong and studied in the UK. He attended a boarding school in Wiltshire, before taking a degree at Southampton University. Diploma in hand, Wo returned to Hong Kong in 1990 and joined real estate company First Pacific Davies (predecessor of Savills) in 1995. A year later, Wo moved with the company first to Guangzhou, then Shanghai, then Beijing. In 2006, he was asked to set up Savills’ South West China division out of Chengdu, where he remained until he returned to Beijing in 2023 after being made Managing Director of Savills North China.
“That was a cold start when I was put in charge of the Chengdu office, and our competitors were already in the market for over one year,” explains Wo. “It was a tough post and hard to survive because the market was not very mature in Chengdu at that time. And for Savills, it was also very challenging to find the right person for the role. Luckily, I started up from setting up the office, then I opened the business successfully, and I stayed in the post.”
Wo’s role as MD of Savills North China is a culmination of three decades working in the same sector across the same region for the same company. He has witnessed the learning years of the 1990s, the boom years of the 2000s, the regulated years of the 2010s and the challenging years of the 2020s.
“From the 1990s to 2010, the market grew very fast. Beijing, Shanghai, Guangzhou, Chengdu… a lot of projects were built in that period in every major city across residential, commercial and retail [sectors],” Wo explains. “The market growth was so fast that people couldn’t cope. During that time, our biggest challenge was to find enough experienced staff to do the work because the speed of the building and new projects was so fast.”
International companies like Savills succeeded because they brought professionalism and best practices to China, Wo explains. However, by around 2010, a lot of local companies had caught up with the international companies and the huge profits previously seen were harder to achieve.
“Local companies learn fast, and our staff or staff from competitors went to local companies or opened their own consultancy firms, so after 2010, some of the professional works were taken by smaller local firms, ” he says. The market competition had become even more intense, and to make Savills stand out against its local competitors, Wo focused on ensuring the company had not only the best business practices but also the best company culture. Wo believes that a great corporate culture attracts the best talent, which ensures Savills stays ahead in the race for excellence.
After the development boom in Chengdu started in earnest, the challenge for Wo was finding human resources as it was hard to get good people and train them quickly.
Like selling a product, recruiting into a company requires sales and marketing. Sales, Wo explains, is the way you recruit people and how much money you pay them compared to the next company. “Instead of hunting for good people, I thought, why not to get them to look for us,” he says. “Especially at the start of my business in Chengdu – I joined a lot of forums and conferences that enabled me to show to a large audience how we are thinking very positively, that we have a good company culture and deal with people fairly, and we are a professional service company in Chengdu.”
Wo explains that it’s not necessarily about paying your staff the most but ensuring that you are rewarding them properly for achieving results, providing them ways to better themselves through learning, development and having a route to promotion.
But for Wo, the most important thing is ensuring the team is happy. “People want to work happily. But happy doesn’t mean having parties all the time,” he emphasises. “People are happy when they are treated fairly and don’t have to deal with internal politics. If there is good internal management that keep internal politics at bay people work happily.”
“Company culture and integrity is still an edge for foreign companies. It makes it easy to attract the best talent,” Wo says. “We need to develop new ideas and keep ourselves in advance of the market.”
Prior to around 2010, foreign companies had products or services that China didn’t have and therefore could sell these at a high margin. But with China’s rapid development, companies started to be able to produce similar products at a lower price, meaning the foreign companies couldn’t hang on to their margins as they did before. “Foreign businesses that want to do good business in China have to bring in the best services, the newest technology and really good professional products and services. Those with a 1990s mindset will not survive,” Wo says.
Around 2015, a lot of foreign developers and Hong Kong developers started to exit the China market due to tightening of real estate policies that made the sector less profitable. Instead, they were replaced by state owned enterprises or local governments who had no shareholders to please.
Wo and I discuss the more recent challenges: the Covid-19 pandemic, the economic slowdown, geopolitical tensions, and China’s real estate slump. Wo tells me he believes that the economy is a periodic problem, and it will settle down eventually.
The most important thing to consider when the economy is going through challenging times is to control costs, Wo says. “Previously, the aim was always to grow your business, but nowadays, the goal is to sustain your business and consolidate,” he says. “This is a great time to think of new ways to do business, new products to launch or new markets for geographical growth.”
For example, as the US and European economies slowed, China looked to open up new markets in the Middle East, Southeast Asia and South America.
“Look at extending your business without having to invest too much. Consider how to raise income or profit of the company little by little,” advises Wo. “And develop new products and new technologies – always be thinking one step ahead.”
Savills is involved in all elements of real estate apart from the construction itself. From planning a single building to an entire city block; pre-management consultancy and sales to leasing and project operations and management – the company provides a full service across the retail sector. Moreover, the company now provides a property, asset and business valuation service for those looking to leverage their equity stake, receive investment or list on a global market.
“There have definitely been ups and downs, and the market has changed quite a lot since Covid-19, but all our businesses have remained strong,” Wo says. The key thing, he advises, is that “in order to earn and survive, don’t think you can get quick money or easy money. You have to work harder than ever. This period will pass in a few years’ time and so we should prepare before the good times come.”
