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A busy bee in the hamburger hive

If McDonald's is the Goliath of fast food, Tony Tan's Jollibee is its Filipino David
Feb 28th 2002 | From the print edition
THE Philippines is a huge embarrassment to McDonald's. Filipinos
are as mad about American culture as they are about fast food,
and in 1981, when the golden arches first went up in Manila,
everybody assumed that McDonald's would rule the Filipino
market, as so many others. At the time, Tony Tan was a local
entrepreneur who, with his siblings, had just turned a few ice-
cream parlours into burger kitchens. He was soon getting friendly
advice that he was still young enough to do something else for a
living. At best, said his friends, he could buy the McDonald's
franchise.
Mr Tan did nothing of the sort. Instead, he chose to do battle with
the invading global giant. And a strange thing happened. Within
four years, Mr Tan's chain, Jollibee, had become the market
leader. By the 1990s, Jollibee was trouncing its rival so thoroughly
that McDonald's was forced to choose between retreat and
imitation. McDonald's denies that it has opted for the latter, but
that is how it looksand tastesto Filipinos. Even so, they
continue to pass it by in favour of Jollibee (see chart). Other global
heavyweights appear to have no hope whatever. Burger King's
Filipino franchisee is trying to sell out but, after over a year, it is
still looking for a buyer.
Like many successful entrepreneurs in the Philippines, Tony Tan is
ethnically Chinese. His parents immigrated from Fujian, once one
of China's poorest provinces, and his father made ends meet as a
cook in a Chinese temple. Hanging round the kitchen early in his
life, Mr Tan apparently developed unusually sensitive taste buds. A
colleague considers them downright surreal. She remembers
witnessing Mr Tan tasting a chicken and spotting a minor ingredient that he had noticed only once before
years ago, in a Chicago food stalland which he at once set out to track down.
His palate, indeed, seems to have been Mr Tan's greatest source of confidence throughout his struggle
against McDonald's. Modest in every other respect, he never once doubted that he could make better food
or at least better to Filipinos. To this day, he still attends the weekly three-hour meetings of Jollibee's
new products board. The decisions made there find their way into the commissariat, a top-secret spice
kitchen and the nerve centre from which Jollibee outlets are supplied.
Describing Mr Tan's recipes is not easy. Generally speaking, the Philippines is not famous for its food, and
cardiologists consider it downright evil. In their own kitchens, Filipinos tend to cook meat with stunning
amounts of sugar and salt, and to soak it in bagoong, a sort of brine. But no matter how poor, they like to
splash out every so often on fast food. And then they like burgers that are sweet and juicy, spaghetti that is
saccharine and topped with hot dogs (no Italian would recognise it), beef with honey and rice, and, for
dessert, variations on the mango theme. All this Jollibee provides, whereas McDonald's, perhaps hidebound
by its global standards, never quite seems to get it right.
Nor is Ronald, the Americans' red-haired clown, any match for the jolly bee, a ubiquitous icon in the
Philippines. The Tans chose the bee because they thought it epitomised the Filipino spirit of light-hearted,
everyday happiness. Like Filipino working folk, explains Mr Tan, the bee hops around and produces sweet
things for life, and is happy even though it is busy.
Indeed, the corporate jolliness is infectious, and as much a part of Mr Tan's success as his recipes. Jollibee's
staff outsmile McDonald's by a huge stretch. This January, they started greeting customers with a gesture
adopted from the sign language of the deafa vertical stroke for bee and hands shovelling towards the
heart for happywhich kids have started using in playgrounds. Staff call customers and one another
sir and mom, which is at once casual and respectful in the Philippines. From the cleaners to Mr Tan,
who is not above dressing up as a rapper and doing an awful Puff Daddy imitation for the delight of his
staff, everyone at Jollibee projects fun.
All this success does not seem to have gone to Mr Tan's headyet. He refuses to say I, and habitually
deflects credit to us, meaning siblings and colleagues. But success may be taking a different toll. Of late,
Mr Tan has discovered global ambition. It's on his mind all the time now, says a colleague.
Goliath in the making?
The real reason why he did not bid for the McDonald's domestic franchise all those years ago, he now
claims, was that he already envisioned expanding overseas. That may be true, but it would have been a
remarkably long-term vision for a man who was, at the time, a small entrepreneur in a poor country. In
any case, the expansion has certainly begun. Jollibee recently opened eight stores in California, and a few
more across Asia. It had to close one in China, but it is now regrouping for another push. In time, Jollibee
means to be everywhere.
So far, this has been a low-risk strategy, because Jollibee aims mostly at the diaspora of overseas Filipinos.
But in order to go global, Mr Tan concedes, Jollibee soon has to break that Filipino link and reach out to
other nationalities. As ever, though, he feels that he can, because we have an edge over all the American
brands in food. His brothers and sisters on the board are less convinced. What an irony it would be if a
Filipino David were to become vulnerable to the slings of Davids elsewhere.
From the print edition: Business