Globalizing Chinese Powerhouse Tells Its CEOs to Expand in Home Markets
Globalizing Chinese Powerhouse Tells Its CEOs to Expand in Home Markets
(Bloomberg) -- Fosun International Ltd., one of China’s largest conglomerates, is telling its top executives to expand in markets at home after years of scooping up assets overseas, from stakes in British soccer teams to French resort chains and fashion brands.
Fosun’s billionaire founder Guo Guangchang asked the group’s global chief executive officers to allocate budgets targeting the China market, he said in comments posted on his social media account Wednesday and Thursday. While Fosun will in principle stop expanding into new geographical markets overseas, it will focus on strengthening businesses where it already operates, Guo said.
“China’s market is large enough,” Guo said on WeChat. “For example, about half of the luxury industry’s market is in China at the moment.”
Fosun plowed more money into overseas investments last year, even as other big Chinese conglomerates such as HNA Group Co., Dalian Wanda Group Co. and Anbang Insurance Group Co. pulled back after years of big deals left them with unwieldy levels of debt. Guo’s push to refocus on China’s $14 trillion economy comes after a year of escalating trade tensions with the U.S., which has blacklisted some Chinese companies and even pushed allies around the world to join the boycott.
Fosun Group company CEOs include Henri Giscard D’Estaing, who has led Club Med resorts since 2002, and Jean-Philippe Hecquet of fashion brand Jeanne Lanvin SA.
The group’s Fosun International flagship got about 43% of revenue from outside China in the first half of 2019, according to its results presentation. Fosun, which has insurance, banking, tourism and real estate businesses, controls overseas brands including Tom Tailor Holding SE, Lanvin, Wolverhampton Wanderers Football Club 1986 Ltd. and Club Med.
Guo said the focus on local growth doesn’t mean the group will stop plowing its money into new projects.
“Investment is one of Fosun’s most important genes,” Guo said. “For genuinely good projects, we definitely have enough resources to support.”
To contact the reporter on this story: Shirley Zhao in Hong Kong at xzhao306@bloomberg.net
To contact the editors responsible for this story: Sam Nagarajan at samnagarajan@bloomberg.net, Dave McCombs, Jeff Sutherland
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