Ni Lin had just gotten out of college with an architecture degree in 1990 and, like a lot of other fresh graduates in China back then, took a job at a state-owned company. His salary was just $600 a year, so he moonlighted by selling interior designs to businesses that were short of help. He was trying to get in on the ground floor of the country’s big construction boom.
One day, Zhu Xingliang, then head of a startup interior design outfit, asked Ni to meet him. Zhu had just lost a deal to a rival that preferred Ni’s freelance drawings to the ones Zhu had pitched. Now Zhu had Ni in his sights as a key hire. The two graduated from the same school—Suzhou University—but Ni had doubts about leaving a secure job. “Back then, no one wanted to work for a private-sector company because they were seen as financially unstable,” he says. He also remembers that Zhu looked like a country bumpkin, wearing white shoes with a western business suit with the price tag still attached when they met. Yet Zhu struck the right note when he said: “I know you work at a state company.” Ni was frustrated with his state employer, was ready for more responsibility and wanted more pay. Zhu got his man by paying Ni 10 times as much.
It’s paid off many times over for both. Zhu (53), Ni (43) and others have gone on to create one of the world’s largest and most successful interior design and decoration outfits, Suzhou Gold Mantis Construction Decoration. The company has done interior and exterior decorating, landscaping, design and other work for some of China’s best-known new structures of the past decade, including the Bird’s Nest National Stadium and the National Grand Theatre in Beijing. Gold Mantis has also worked with the Who’s Who of billionaire-controlled real estate developers across China, including Soho China, Shimao Group, China Vanke and Wanda Group. In addition, it has designed and decorated five-star hotel interiors in China for brands such as InterContinental and Suzhou’s Lamborghini.
In an industry where an interior design house might be as small as a one-person shop, Gold Mantis today boasts of 6,000 workers, including 1,800 designers. Sales last year totalled $1.6 billion, a 60 percent jump from the year before. Net profit nearly doubled to $116 million as margins and the number of projects increased. That performance puts Gold Mantis on the Forbes Asia Fab 50 List for the first time. The company’s rapid growth has made it a stock market star. While China’s main indices have dropped by a fifth in the past year and sunk to three-year lows, Gold Mantis has climbed by more than 30 percent over 12 months. Since its initial public offering in Shenzhen in November 2006, its shares have more than tripled. “Some people wondered if an interior design company could even go public successfully,” says Ni with a smile at an interview in the company’s Suzhou headquarters. Its performance made Zhu a billionaire; his 41 percent stake is worth $1.4 billion, ranking him No. 913 on the 2012 Forbes Asia Billionaires List. Ni, who joined the company seeking a higher salary and was promoted to chairman, holds shares worth $35 million.
The way Ni sees it, the urbanisation wave that has already brought millions of Chinese from the countryside into the cities over the past 30 years will continue to fuel demand for property and infrastructure. The rise of big nationwide chains of developers that like to work with similarly spread-out suppliers and partners such as Gold Mantis will continue, too. And he notes that the company still has less than a half a percentage point of market share in its business. So Gold Mantis has set a huge goal for itself: Nearly $5 billion in sales in 2015, triple its 2011 total. That chutzpah, and the prospect of new government infrastructure spending to stoke the country’s slowing economy, have fed expectations of even more gains in its shares. All 18 analysts listed on Bloomberg as following the company have a ‘buy’ recommendation on its stock. “We have the skills, the management and the model right now,” says Ni.
Yet to reach its goal, the company will face more challenges than ever. It needs to manage more account receivables because they’ve been creeping up in the past year as the economy downshifts. At a time when the government is worried about the property market overheating, Gold Mantis must keep an eye out for abrupt policy turns. Above all, it will have to line up many more designers and manage them well to control quality. “The industry has been growing a lot, but there are also a lot of things that represent risk,” says Forrest Zhong, a managing partner at South River Capital in Shanghai.
Historically in China, architecture and interior design have been interwoven jobs. Its high-roof-style structures date back more than 2,000 years; interior details often reflected the importance of the people who occupied them. Having influenced other countries in Asia for centuries, Chinese interior design spread to decorations sold in Europe in the 17th century, spurring the Chinoiserie style. It turned up in the US in furniture and other works designed by Thomas Chippendale. One of the most famous modern-day fans of Chinoiserie is Ann Getty, the daughter-in-law of late tycoon J Paul Getty, who says, “This style is so popular today because it has many levels of interpretation, and so it can work as a whimsical accent in a modern setting or an elegant addition to a formal environment.”
But Western influence has loomed much larger in China than Chinese influence in the West. ‘Big noses’, as foreigners were called, started to arrive in a big way only after the Opium Wars in the 1840s, and Shanghai became the focus of overseas influence in building and interior design. Most of the Western work wasn’t lavish by overseas standards because “no one expected to stay long”, says Shelley Lim, an interior design consultant to Getty and a Shanghai resident who helps renovate and design old structures in the city.
All of that Western influence paused for four decades after the Communist takeover in 1949. Though Chinese property developers today dot the Forbes Asia list of the world’s wealthiest people, interior decorators have received less attention and built less wealth. That’s in part because the business is far less concentrated.
In the past five years, the number of companies in the building-completion and interior-decoration industry rose to 183,200, mostly small outfits. The business is projected to grow by 13 percent annually for the next five years, totalling roughly $800 billion by 2017. That rate is up from more than 9 percent in the past five years, and will get a boost from increased household spending, according to an IBIS World Industry Report.
Zhu and Ni entwined their careers starting in 1993 from a spot that has long been a centre of Chinese design. Suzhou, today a major business and manufacturing hub whose foreign investors include Alcoa, Siemens and Johnson & Johnson, is a satellite city 30 minutes from Shanghai by high-speed rail. Yet its distinctive, elegant gardens have attracted elites for thousands of years, and it remains one of the country’s most popular tourist areas.
Gold Mantis took its name from an inspiring ancient tale about a brave bug. A king was hunting one day and found a mantis standing in the path of his carriages, ready to take on the larger, human force. The king reasoned that if the bug was human, he would be one of the world’s bravest warriors, and, in respect, ordered his carriages to go around the mantis, according to a description at the company’s headquarters. Besides their bravery, the insects are revered at Gold Mantis because they build “exquisite lairs” that underscore their skills as designers, it says.
Gold Mantis found its first customers among government companies putting up offices and hotels, recalls Ni. Its entrepreneurial zeal quickly led it to grab more deals in the booming real estate industry; today it has 37 offices around China. Zhu offered to let senior staff buy shares in 2003, the year he stepped down as chairman to signal that he wanted his business to be led by professional managers. It was then that Ni took over as chairman, moving up from general manager. The founder helps with sales and stays active in design-industry groups. Yet Zhu stays out of day-to-day management and the press. Two relatives own small stakes in the company, and one is a vice president, but Zhu is the only family member on the board.
Many of Gold Mantis’ projects are in buildings with Western-style exteriors. Yet the company says much of its interior work reflects Chinese influence, such as feng shui. In a hotel, for instance, it would never place a door in front of a bed; Chinese believe that this would open the way for bad spirits to encroach, says Vice President Yin Haoming. “We focus on the scientific elements of it, not the superstitious ones,” he offers.
Government agencies are still important for business, accounting for 40 percent of its sales. Companies—government-controlled and private ones—account for the rest of the sales. One unique part of its business approach is that it manufactures some of its own decoration materials, including furniture, rather than buy them all from outsiders.
One fan of the company is Evergrande Real Estate of Guangzhou, which ranked as one of China’s top 10 developers last year, with 187 projects under way in 103 cities, and counts on Gold Mantis for interior decoration work at its residential projects and hotels. “Our projects are national, and we need a strong organisation as a partner nationally,” says Evergrande Vice President Lin Manjun.
Can Gold Mantis keep up its torrid growth? To continue expanding, it needs good designers. To that end, it joined with Suzhou University in 2007 to set up the Gold Mantis School of Architecture & Urban Environment. Today, it has 57 faculty members and more than 600 students. The company lets its designers teach at the school. All majors in the interior-design department work at Gold Mantis as interns and take an overseas trip that costs the company a total of almost $100,000 a year, according to Dean Wu Yongfan. Although some universities in China have schools donated by businesses, he knew of none where the interaction with the donor is as close as between Gold Mantis and Suzhou University. “It is very special and effective, and benefits society, the company and the school,” says Wu. In June, Gold Mantis added support for post-doctorate research there.
Another source of help may be foreigners. Gold Mantis doesn’t do much work overseas but taps into foreign help at home. One hire: Terry Arthur Henriksen, who had taken on projects in China from time to time in a career that spanned more than three decades before he agreed to work full-time for Gold Mantis a year ago on hospitality-industry buildings at the company’s headquarters. He is designing the interiors for corporate clubhouses, the Lamborghini hotel chain in China and other buildings.
The big difference between working in the US and working for a Chinese firm is the brisk speed at which work gets done in the mainland, Henriksen says. That is because interior-design projects will get started with 3D renderings of the work, rather than first going through a slower, more traditional planning route that involves the architect, he says. Henriksen adds that the rising demand from developers will result in better planning for interior spaces in China because it will lead to savings on staffing and spending when facilities open. With some of the projects he’s taken on since joining Gold Mantis not yet completed, Henriksen pauses before judging his own work. “I think it will turn out great,” he says, another follower of the gutsy mantis that stood up to a mythical Chinese king eons ago.
(This story appears in the 12 October, 2012 issue of Forbes India. You can buy our tablet version from Magzter.com. To visit our Archives, click here.)