Vice President of Macau Young Entrepreneurs, President of Macanese Youth Association, co-owner of a chain of restaurants, an executive at the Business Development Department of San You Development Co. Ltd and automotive engineer among many more titles, Duarte Tavares Alves shares with Business Daily his stories from the business world. He advises aspiring young Macau people to learn from others experiences before starting their own businesses, and encourages them to be creative and take advantage of Macaus developing scene. The slowdown in the gaming industry will make society healthier,
he says, believing that sustainable, promising, prospects lie ahead in the future.
Joanne Kuai
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Youve been engaged in projects in various fields throughout the years. What are your latest projects?
I am 33 this year. I believe that I am still at the age probably close to deciding what area I want to focus on more. Since a young age, my idea was that there is so much to learn. Therere so many different areas someone can learn about in business. Therere so many industries. Why should we focus straight away when we are 20 something? Why focus immediately on one path, one career, especially if you want to take more of an entrepreneurial route?
I have been involved in a few different projects. I worked in the gaming industry for a couple of years. I am now heavily involved in property development. On the side, I was lucky enough to have the opportunity to join San You to help out with all the projects they have. Then, with my brother, we have a few investments around in Macau and even outside.
Lately, one of the latest projects, with one other partner, is the Global Language School. I have faith in it. I believe something thats picking up in Macau is the interest in learning languages, especially after all these years the central government and the Macau government have been focusing on Macau being the famous platform between China and the Portuguese-speaking countries.
With another group of friends, Ive got a chain of restaurants. We have a mix of a few Japanese restaurants, a Thai restaurant, and we are opening up an Italian seafood place. Thats the F&B (food and beverage) area Im also involved in.
I have a few other things starting up that are still a secret. Hopefully, in the next couple of years, I believe something interesting will come out.
Being from Macau, this is my home, and I would love to contribute as much as I can to the development of my city, my region.
From your point of view, as a young entrepreneur, what are the best businesses to be developed locally?
Its very hard to say. It depends on where you are in your career, if you are young, if you are experienced. Its fairly easy to get started with the F&B industry and I think lately there has been a trend of very young entrepreneurs opening coffee shops, etc. which I would say is a good experience.
For young entrepreneurs, you work in the F&B industry yourself. You have direct contact with the clients. Its very hands-on. Its a very good experience. And if you look at how the F&B side is developing in Macau, its getting more modern. Even the concept, its getting more and more creative. We are putting the creative industry in to F&B as well.
But I believe for us, the young entrepreneurs, we have to be creative. We have to look for whats missing in Macau. Macau is developing rapidly. Its growing. People are looking at different things. So we cant just look back and think that what succeeded before will continue to be successful.
If you want to strive, you need to look at different ways. If you look around at the media side, there are companies that are growing very quickly. I have a friend who is the founder of MOME. They are everywhere. I am very proud of their achievements. Thats a prime example of someone who saw there was an area missing in media marketing in Macau and took advantage. The way he does things is not the usual conventional advertising marketing way. They try to add technology and different ideas, different concepts, different approaches, think outside the box. Thats what makes him successful.
You are saying that more important than copying success stories is the mind-set
You have to be creative. Its easy to copy whats next door, what you have seen. For young entrepreneurs, I always think – and I am like this myself as well – its common for us when we finish university or our studies, we want to be our own boss and want to be an entrepreneur and open our own business. But I think its important to spend a few years actually working for companies and learning from other peoples experience. And one should also learn from ones failures. You need to bump your head a few times into the wall, hit a few problems and find solutions for them. And if you can have the opportunity to work for someone who has been through that and will pass on their experience, your chances of succeeding will be much higher. My advice, for younger entrepreneurs, as I have around ten years of experience now, is: dont be too eager to start up on your own so quick. You are still young. Take the opportunity to work with some other people with a lot more experience. Learn from their experience.
What is the most characteristic feature the local business environment in your opinion?
If you look at Macau historically, Macau is a very small place. The biggest families are well known. But its starting to diversify. The most traditional ways to invest in Macau are of course, property development.
A few years ago, Macau was growing very quickly, but we are limited by the amount of land we have. There are not as many plots available as there used to be 15 years ago. Its still a good area to invest in, because whatever is left now is prime real estate. Its a good opportunity to invest, mainly because Macau is still growing. We are building reclaimed land. In maybe 10 to 20 years they will be ready to be developed.
And of course I believe people can start thinking about society modernizing, as we are not a manufacturing-based town, because we are limited by space. So there are other areas we can invest in. We have a lot of office space. And things like technology, technology start-ups, etc.
For example, we can use a lot of IT to help, to make everything much more efficient in Macau, from traffic to government operations, information about the city. Theres a lot we can do.
And Macau is a very good place for you to, for example, develop an app, specifically for the tourism industry, because its such a small place with high rates of activity and turnaround. Its a perfect place for you to experiment with your product.
What do you perceive as the biggest challenges for young entrepreneurs running businesses in Macau?
I will give you an example in F&B. If you open a restaurant, you need to commit. You have your advisers. You have experience. You think it will be OK to have an F&B license. So you put the deposit down and everything. It may take up to a year and a half, or two years before you actually open your restaurant.
If you think about it, if your rent is HK$50,000 times 24 months, that would be your initial investment. You are already losing without making any money. Thats very challenging. The amount of time it takes
The licensing itself involves a lot of departments. You have the IACM [Civic and Municipal Affairs Bureau] the DSSOPT [Land, Public Work and Transport Bureau], and now also of course the Health Bureau to make sure things are fine sanitary-wise. It takes a long time.
For start-ups, its not very straight forward for you get guidelines to tell you what the regulations are for you to build, to remodel, to renovate, to get the license for the ceiling heights. One documents says A, the other says B. I believe everything could be centralized. Not just for F&B.
And then we are very short of labour and I believe its the same for a lot of industries. Its difficult. Of course we want the locals to be involved but the unemployment rate is already very low. And for small enterprises, we cannot compare small companies to enterprises such as the big gaming operators. Its not fair that we have to fight and wait so long to get a couple of quotas to be approved when they are going by the hundreds. In that sense, its very hard. Sometimes we think we fulfil all the requirements, but the replies we get are not very straightforward. Its not very easy to work around that. Its one of the major headaches.
What help could be provided?
We are still developing. The policy is one country, two systems and Macau being governed by its own people. Thats what we believe we are. But Macau, being limited by the number of people we have, for weaker sectors to develop, that will take time.
If you look at the all the discussions we have in the Legislative Assembly, from my point of view, we are young, the legislators they dont have experience in law-making, they may overlook things. I am not blaming people because they are not capable of doing things. Its just that we are learning. We have to be more open-minded so that we can be more flexible so that everything happens more smoothly and we grow. What we have to be very conscious of is that we cant stop the growth. We cant stop the growth of the society. By working in a positive way, having an open mind-set, we need to solve problems, we need to be fair, so that we can grow.
There was a comment by our Chief Executive a few days ago that Macau young people need to be more involved. I believe there are a lot of subsidies for people to study abroad and come back. I do also feel we need to be more adventurous. Personally, I left Macau to study when I was 16. I was away for 10 years. That has broadened my perspective. I came back with a different mind-set, as a different person. Thats why I have this motivation to stay in Macau and keep working. Because Ive been outside, Ive seen and I think we can do the same or even better in Macau. If we work towards that direction, if everything works more efficiently, if the young people see Macau growing healthily and steadily and at a sustainable place, with an opportunity for all of us if we work hard, then Macau is a good place to be and an even better and better place to live.
Has the slowdown in the gaming industry caused any concern?
Ive seen Macau grow since the handover at a very quick rate. I believe there are still some sectors of our society that are still trying to keep up with that rapid growth.
When you say there is a big slump in the gaming revenues, I dont see it that way. Its a very small portion of our visitors that brought that amount of VIP gaming.
Macau is growing too quickly, I believe. It was too much of a rapid growth. And all that can bring bad habits, in terms of how you run a company, in terms of the impact on society as well. There is suddenly too much money. Its not healthy. Thats how I see it.
I think the slowdown will make everything run more efficiently. Like for a business, it will make people think what can we do to make our company more efficient and keep the profit at a good level? I believe it will make society more healthy.
Of course for the government, it will make the system more healthy, because if inflation is rising, the government is raising the salary for public servants. What does that mean for us in the private sector? I believe its unheard of. Every year you raise your staff salaries six to seven per cent, the rents are going up ten per cent every year for retail, for shops.
From my experience in F&B, how can we survive? Food costs are going up, labour is going up, its very hard to get foreign labour quotas. Hiring locals is getting very expensive. I am just left with raising the prices, otherwise how can I survive? Our F&B business, through a total of six restaurants now, the revenues have dropped 15 to 20 per cent. Its not specifically just our restaurants. I believe its the market. Yet the landlord still raises our rent. People always ask for raises and they always use the government as a reference point – they are raising salaries six to seven per cent a year, we should too! As a small enterprise, its difficult for us. Its very difficult.
So I believe the slowdown in gaming revenue, will help calm things down.
The companies will run more efficiently. I think there are more opportunities for talented locals to be involved in the gaming industry. The cost of hiring a local is far less than hiring a high-level management staff from overseas, which I think is a good idea. Something I felt when I was working in the gaming industry, I think there are a lot of talented people in Macau who can actually fight.
Its one of those things you cant give up on. If you believe in yourself, you just have to keep working towards that direction. And Im sure we will all be rewarded sometime.
Whats needed?
What we need is sustainability. To be sustainable, you cant grow at that rate. Its unheard of. If you grow too quickly, the chance of the bubble bursting is very high. At the level we are at now, I dont find it alarming. If we were happy in 2010 with the revenue, why wouldnt we be happy now?
Its a weird comparison because I studied mechanical engineering why do you have to make the engine much more efficient? To use less fuel but run the same distance. And I think its the same thing. How can we go further with the same amount? Be happier? I think what would help.
With the slight drop in revenue, the housing prices are a bit lower, its more accessible to the local people, because in the end, people have to live somewhere.
I have confidence. We dont need to turn around. We are just making everything much more efficient so that we can have, Macau will have, or even our country will have a bright future for many years to come.
We are from Macau. We feel, or at least I feel, I want to be here. I am not here to make quick money and then go somewhere else. I am here to stay. Its my home. My roots are in Macau. We work for sustainability. I believe the young generation thats booming have the same in mind. There are opportunities in Macau. We are here to stay.
