From Rags to Riches: The Success Story of John Gokongwei

Challenge No. 2:

In 2003, we established Digitel Mobile Philippines, Inc. and developed a brand for the mobile phone business called Sun Cellular. Prior to the launch of the brand, we were actually involved in a transaction to purchase PLDT shares of the majority shareholder. The question in everyone’s mind was how we could measure up to the two telecom giants. They were entrenched and we were late by eight years!

PLDT held the landline monopoly for quite a while, and was first in the mobile phone industry. Globe was a younger company, but it launched digital mobile technology here. But being a late player had its advantages. We could now build our platform from a broader perspective. We worked with more advanced technologies and intelligent systems not available ten years ago. We chose our suppliers based on the most cost-efficient hardware and software. Being a Johnny-come-lately allowed us to create and launch more innovative products, more quickly. All these provided us with the opportunity to give the consumers a choice that would rock their world.

The concept was simple. We would offer Filipinos to call and text as much as they want for a fixed monthly fee. For P250 a month, they could get in touch with anyone within the Sun network at any time. This means great savings of as much as 2/3 of their regular phone bill! Suddenly, we gained traction. Within one year of its introduction, Sun hit one million customers. Once again, the paradigm shifts – this time in the telecom industry. Sun’s 24/7 Call and Text unlimited changed the landscape of mobile- phone usage.

Today, we have over 4 million subscribers and 2000 cell sites around the archipelago. In a country where 97% of the market is pre-paid, we believe we have hit on the right strategy. Sun Cellular is a Johnny-come- lately, but it’s doing all right. It is a third player, but a significant one, in an industry where Cassandras believed a third player would perish. And as we have done in the realm of air travel, so have we done in the telecom world: We have changed the marketplace. In the end, it is all about making life better for the consumer by giving them choices.

Challenge No. 3:

In 2004, we launched C2, the green tea drink that would change the face of the local beverage industry — then, a playground of cola companies. Iced tea was just a sugary brown drink served bottomless in restaurants. For many years, hardly was there any significant product innovation in the beverage business. Admittedly, we had little experience in this area. Universal Robina Corporation is the leader in snack foods but our only background in beverage was instant coffee. Moreover, we would be entering the playground of huge multinationals. We decided to play anyway.

It all began when I was in China in 2003 and noticed the immense popularity of bottled iced tea. I thought that this product would have huge potential here. We knew that the Philippines was not a traditional tea-drinking country since more familiar to consumers were colas in returnable glass bottles. But precisely, this made the market ready for a different kind of beverage. One that refreshes yet gives the health benefits of green tea. We positioned it as a “spa” in a bottle. A drink that cools and cleans — thus, C2 was born.

C2 immediately caught on with consumers. When we launched C2 in 2004, we sold 100,000 bottles in the first month. Three years later, Filipinos drink around 30 million bottles of C2 per month. Indeed, C2 is in a good place. With Cebu Pacific, Sun Cellular, and C2, the JG Summit team took control of its destiny. And we did so in industries where old giants had set the rules of the game. It’s not that we did not fear the giants. We knew we could have been crushed at the word go. So we just made sure we came prepared with great products and great strategies. We ended up changing the rules of the game instead.

There goes the principle of self-determination, again. I tell you, it works for individuals as it does for companies. And as I firmly believe, it works for nations. I have always wondered, like many of us, why we Filipinos have not lived up to our potential. To be a truly great nation, we must also excel as entrepreneurs before the world. We must create Filipino brands for the global market place.