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Asia Drives Family Business Growth In A Pandemic-Hit World

Vingroup, Vietnam’s sole representative on the Family Capital 750 list, is at 410th place. It is owned by Vietnam’s richest man, Pham Nhat Vuong.

Asia Drives Family Business Growth In A Pandemic-Hit World

Vingroup is a leader in real estate, retail, healthcare, education and automobile industries. | Source: CravenA/Shutterstock

In the 2021 ranking of family businesses by Family Capital, a UK-based publishing company dedicated to the global family enterprise sector, the Asia-Pacific region is at the center of family business growth in the world economy, growing by 15 from last year’s ranking. Family businesses in Europe fell by 17.

The Top 750 Family Businesses Ranking underlines the importance of family businesses to the resilience of the global economy, which has been critically impacted by the coronavirus pandemic. This year’s survey identified enterprises that entered 2020 with solid balance sheets, suggesting they were in better positions to weather further downturn than many of their non-family business counterparts.

“Family businesses continue to be the engine for growth and job creation,” says Peter Englisch, global family business leader for PwC. “This is good news because family businesses represent the stability, innovation and long-term commitment that we need for a post-COVID recovery and addressing the future challenges of more sustainable business practices.”

Although the Asia-Pacific region has become the center of family business growth, European family businesses still make up the biggest share of the 750, comprising 298. Asia and North America each have 188 companies on the list.

At number one is Walmart Inc., owned by the Walton family. Considered a leader in the retail industry, Walmart brought new approaches and technologies to the industry as it experimented with new store formats and expanded its family of brands. Currently, the family owns 48.5% of the company.

Volkswagen AG (Piech and Porsche family), Berkshire Hathaway Inc. (Buffett family), Exor N.V. (Agnelli family) and Ford Motor Company (Ford family) complete the top five family businesses.

South Korea’s LG Group and Sk Group rank sixth and seventh.

LG, owned by the Koo family (with 40% share of the company), is the fourth largest chaebol in South Korea. It was established in 1947 by Koo In-hwoi as a plastic producer. The company expanded its business and is now known for manufacturing some of the best electronics, chemicals and telecommunication products.

Chey family’s SK Group, meanwhile, is primarily involved in the chemical, petroleum and energy industries, employing more than 70,000 workers in 113 offices worldwide.

“There’s no doubt North America and Europe are still very important centres for family business activity, but the rise of the Asian family business is underlined by the highest number of new entrants in the ranking,” says Johannes Rettig, director, business development entrepreneurial & private business at PwC.

“This doesn’t come as a surprise but reflects the dynamic economy of the region. This trend will challenge the dominance of European and North American family businesses not only in terms of economic relevance but also their culture and values.”

Vingroup, Vietnam’s sole representative on the list, is at 410th place. The conglomerate, owned and managed by Vietnam’s first billionaire and currently the richest man in the country, Pham Nhat Vuong, has reported a market value of $20 billion.

Leader in real estate, retail, healthcare, education, smartphones and automobile industries, Vingroup’s share continues to climb up, even reaching a 5.3% on Tuesday to a record high after it announced that it’s considering a $2-billion US IPO of its car unit VinFast.

Some of the Asia-Pacific businesses that made the cut are Tata Group (Tata family) in India, Pacific Construction Group Company Limited (Yan family) in China, Amer International Group Company Ltd (Wang family) in China, Softbank Group Corp (Son) in Japan and Reliance Industries Limited (Ambani family) in India.

In order to qualify for the ranking, the family or group of families would have to control at least 50% of the voting shares in a privately held company and at least 30% of the voting rights in a publicly listed company.

Family Capital selected companies in 55 countries that are 20 years and older. The 20-year time frame corresponds on average with a level of transition from first-generation control to at least some participation of the next generation of the family owners.