Brazil's Yim King Po
From Immigrant Rags to IT Riches
Brazilian immigrant Yim King Po grew up poor, but he parlayed a keen eye for emerging trends, the advantage of local knowledge, and multinational connections into a top position in Brazil's information services market.
From Immigrant Rags to IT RichesBy Monique Hou
From CommonWealth Magazine (vol. 425 )
In an interview with U.S. magazine BusinessWeek just before sitting down with CommonWealth Magazine, Yim King Po, CEO of YKP Group, was asked for his insights into Brazil's IT market, as too many U.S. and European companies interested in getting a foothold in Brazil still lack an understanding of the market's unique characteristics.
A vast in-depth local knowledge culled from door-to-door sales, a natural industriousness and an ability to take an international tack gave Yim a natural stage upon which to shine. Already well positioned prior to the rise of Brazil's IT industry, when the IT wave began to crest, he was there to ride it to its pinnacle.
Two Houses by Age 19
In 1967, Yim's merchant seaman father brought the nine-year-old Yim and the rest of his family from Hong Kong to settle in Sao Paolo where he opened a modest shoe store, sidelining in door-to-door sales – a form of business popular with the Brazilian Chinese community at the time – selling embroidered tablecloths and other Chinese goods from a big canvas bag. With Brazil's closed market of the day, Chinese goods, blue jeans, Italian necklaces and other imported items were hot sellers, fetching a premium of 300 percent.
But tribulation always arrives when least expected. Yim's father passed away four years after they settled in Brazil, and Yim was forced into the role of breadwinner, taking over his father's door-to-door trade. The diminutive Yim specifically called upon well-kept, upscale homes. With his quick wit and keen understanding of customer demands, even allowing customers to pay on layaway, Yim was able to amass a considerable sum by the age of 19 – enough to purchase two houses.
In the meantime he also pursued his studies, eventually earning himself a spot in Sao Paolo's top university. The three most highly sought-after majors at the time were law, medicine and electrical engineering, and Yim opted for the third. Yet when he graduated in 1981, Brazil's worst economic year in memory, he could find no work in his field, and took a position designing software for a bank, thus laying the groundwork for his IT services business.
Catching the First Wave
Brazil's domestic computer industry was rather undeveloped in those days, with foreign investment barred and imported computers prohibitively expensive.
"The IBM mainframes that dominated the market at the time were selling for US$5 million apiece," Yim says. "Only government agencies and major banks could afford them."
In Yim's view, however, it was only a matter of time before the mid-level market presented itself. Two years prior to Brazil's market deregulation in 1992, he had already established his own company for less than US$50,000.
At the time the world's best-selling mid-range item was the IBM AS400, but in Brazil knowledge of computers was still scant. So Yim traveled to the U.S. to learn the basics of the AS400 and returned to Brazil as the country's first AS400 instructor, in the process becoming IBM's partner in Brazil.
"Brazilians... You can't just show them a catalog or a DM," Yim emphasizes. "You definitely have to have a relationship. This was something the IBM people just didn't get."
The big difference with the local culture in Brazil is those that have an understanding of local distribution have local connections. Initially, IBM's salespeople in Brazil were selling directly to major corporations and had no means of hooking up with more local distribution networks, and were thus totally reliant on Yim to open those doors for them. Yim focused exclusively on medium-sized businesses bringing in US$3 million or less annually, offering them IBM servers at one-tenth the original going rate.
Yim sold the hardware for IBM and provided software integration and employee training for clients. All the earliest buyers of the IBM AS400 in Brazil – branch companies of major multinationals such as Honda, Toyota, Kellogg's, Pfizer and Merck – developed their IT departments under Yim's tutelage.
Yim's successful representation of IBM ended up attracting the likes of Oracle, Microsoft, and enterprise resource planning (ERP) software maker SAP, requiring Yim to set up three separate companies to service each of these major accounts.
"I checked out the forecast reports of Gartner, IDC and Forrester," Yim says.
Poring over these research reports and tacking on his own advantageous knowledge of local affairs, Yim was able to accurately anticipate the coming trends in ERP, the millennium bug crisis, business intelligence, outsourcing, international accounting standards and tax regulations far in advance of any potential competitors.
Grasping the Talkative Brazilians
It's only with customer relations management (CRM) that Yim took a backflip. In the infancy of the CRM market around 1998 or 1999, Yim thought he spied the next big thing, but CRM was ultimately dead on arrival in Brazil.
"You could even call it a complete bust," he says. "I invested for about a year and then pulled out."
As Yim sees it, CRM focused entirely on standard operating procedure as written in a manual, but that is not the nature of Brazil.
"Brazilians like the face-to-face contact, the personal touch. They aren't fond of written formulas," he says.
With his grasp of the talkative nature of Brazilians, Yim has a certain way with his advertising.
"Chinese people appreciate a magazine ad, but Brazilians like TV ads with a musical flair," Yim insists.
As such, he composed and produced his own musical advertising to be aired on top Brazilian radio and TV stations.
"So you had people singing my tunes all over the place," he boasts.
The bosses and upper management of Brazilian corporations are mad about golf and positively worship the top players. Yim not only took out ads in top golf magazines, he sponsored championship players to raise the company profile among policymakers at top corporations.
"That was really helpful in sealing deals," he says.
Brazil's IT market has the potential for five-fold growth in the next 20 years. With such a market just about to take flight, Yim is uniquely positioned to take advantage.
Translated from the Chinese by Brian Kennedy
YKP Group Thumbnail
2008 Operating Revenue: NT$825 million
Operating Revenue Growth Rate: 25 percent
Pre-tax Profit Margin: 40 percent
Net Profit Margin: 18-20 percent
Formula for Success: Close scrutiny of market reports combined with local knowledge to seize upon each new wave of development, yielding decisive advantage.