Financial Adviser: 5 Business Lessons Everyone Can Learn from 'Diaper King' Samuel Po, Founder of EQ Diapers

Samuel Po's journey from a martial arts champion and night club manager to a successful entrepreneur is a testament that anyone can achieve success in business with determination, hard work, and a bit of luck.

Po was a former two-time martial arts champion with the Kong Han Athletic Club in Chinatown in the 70s. He later became manager of a night club in Pasay called Impierno in the 80s, while trading electrical supplies.

But it was his role as a father that led him to build his business empire.

When Po's first-born son arrived, he and his wife struggled to find good quality diapers. Despite searching everywhere and even going to nearby towns, they couldn't find what they were looking for.

Out of frustration, Po asked a friend from Taiwan to send him some diaper samples. After trying them on his son, he was pleased with the quality and saw an opportunity in the market.

With the help of a friend from his martial arts academy, Po began to import and distribute diapers at SM Supermarkets. The business quickly took off, prompting Po to expand his capacity with more suppliers.

Today, Samuel Po is a name that is synonymous with EQ diapers, the number one diaper brand in the Philippines with almost 40 percent market share.

Leveraging the success of the EQ brand, Po has also extended his product range to include additional brands such as Charmee, Caress, Nursy, and Tidy. These brands offer an extensive selection of baby care products, ranging from diapers to wipes and underpads, providing parents and women with a variety of options to suit different requirements and preferences.

Apart from the diaper business, Po also ventured into real estate and put up the Marco Polo Hotel, a 5-star hotel located in Ortigas. The hotel has become his business card and a testament to his success as a businessman.

How did Po manage to make EQ the dominant diaper brand in the market? What lessons about business values and principles can we learn from him?

Here are the five business lessons every entrepreneur can learn from Samuel Po, founder of EQ Diapers: 

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1| Know how to identify a market opportunity and take risk

Taking a risk in business is a conscious decision that has the potential to either be beneficial or detrimental to you. However, it is important to differentiate taking a risk in business from taking a chance.

When Po saw the opportunity to import and distribute diapers, he took a calculated risk to ensure that the potential rewards will outweigh the potential risks.

“In 1989, I had a baby, my eldest son, and during that time, alam mo yung political instability, we had a difficult time sourcing imported goods kasi walang dolyar nun and you had to come up with your own dollar in the bank,” he says. “Hindi sila magbebenta ng dolyar eh to import, so all these goods are gone.

“I had a hard time buying diapers for my son, to be honest,” he adds. “It was tough to buy a diaper during those times. In fact I had to drive up to South Alabang to buy diapers and there was only one local product and it was not good.

“I said wow there’s an opportunity since I also had a difficult time with electrical supplies kasi nagi-import din ako at the time eh. It was hard to sell kasi ang haba ng pautang, so I asked my friend in Taiwan to send me locally made baby diapers.

“During that time, Taiwan was just starting with baby diaper manufacturing. My friend brought me a sample and I tried it on my son and then sabi ko ‘oh ang ganda nito ah!’

“So I said okay, there is an opportunity here and then I went to Taiwan to talk to the owner. They were a listed company in Taiwan during that time. They were the biggest RTW manufacturer in Taiwan.

When I spoke to him and I said I wanted to distribute your brands to the Philippines and he said ‘OK, two containers per month minimum.’ Without any customer, I signed it. Would you believe? I signed it.

“Yung dumating na, sabi ko wow nandito na yung two containers, and I don’t know how many customers.”

2| Know how to create a brand that stands out from the competition

Having a strong brand presence ensures that customers have a positive impression about your product, making them more likely to buy again from you because of the familiarity and trust they have in the brand.

Po realized that in order to compete with the large multinational companies he had to do more than just offer low prices. He needed to create a strong, reliable brand image to gain the trust of his customers.

“During those times, I was just trading, and it was doing great, but I didn’t have a background in marketing and I didn’t do anything,” Po says. “When I started electrical supplies, dalawa, tatlo lang kami—secretary, driver tapos yung pahinante ko on call lang.”

“When I was doing well, lahat ng manufacturers sa Taiwan heard about me and then they wanted me to distribute for them in the Philippines,  so I ended up distributing I think, four companies of different brands, and without any marketing knowledge, it was purely buy and sell eh. How much do you sell to me? Patong ko, that’s it.

“Ang problema is nagka-iinggitan kasi parehong Taiwan brand. Nagkaroon ng friction, and some of them asked me to drop other brands and concentrate on their brand and hindi ko rin magawa iyon. Marami ditong mga businessmen, pumunta dun and sinulot yung ibang suppliers ko. It was a horrible year for me.

“But it became a blessing in disguise. During the ‘97 Asian financial crisis, yung exposure ko sa foreign currency bumaba kasi nawala yung ibang supplier e, that’s the good side. But my sales dropped because of the competition.

Yung one company that stayed with me, they told me, ‘You must focus on our brand. Maybe you need some marketing strategy, we can help you.’ So, okay, ito pala kailangan dapat may marketing.

“During my visit to Malaysia, I saw that they had this huge pack, not generic but basic diaper with transparent polybag and a sticker on it lang. I said okay, it’s selling well kasi people tend to downgrade eh during that time kasi Asian crisis eh. I said, ‘How about we put up another brand? We produce the basic one and we will have our own brand. We will print it on polybag, one color print.

“The brand EQ was conceptualized in Malaysia. It was made by an advertising company and they told me ‘EQ, which stands for economy and quality.’ It has a double meaning na emotional quotient. So, sabi ko sounds good and pati packaging dun ko rin pina-conceptualize.”

3| Know how to focus and professionalize the business

Having one product to focus on can be a great way to streamline and simplify your marketing efforts. It allows you to target your message to one specific market and create a cohesive brand image that is tailored to them.

When Po decided to focus on one product, he reorganized his company by hiring professional managers to help him bring the business to the next level.

“Back in the 90s, it was the critical point of going back to basics kasi we were purely buy and sell, as I’ve said, and I was selling also those imported biscuit food and all these things. I said, ‘Oh the same channel lang of distribution, supermarket lang, isang tao lang, pareho lang, but I was wrong.

“I said, ‘what the hell am I doing in 1997? I spread myself too thin and I only had four percent market share. And then there’s a lot of opportunity to grow. I took them out in ‘97 and decided to focus on diapers. Sabi ko, ‘four percent  ka lang tapos kung ano-ano ang iniisip mo? I-grow mo muna yung core mo.’ I needed to focus on our core and then grow.”

“I came from a Chinese-style management and ang hirap talaga. Actually, I did a lot of changes and, as they said, the only constant is change. You need to keep on changing and innovating.

“From a Chinese-company style, I put up my own office building in Caloocan. But when a multinational competitor sued me for patent infringement, I said, ‘Okay, I am big enough to have them notice me, so I think I have to level up.

“So I established my own marketing team, sales team, mga ganun and its in Caloocan. It was tough to hire good talent because of the place. Usually, they prefer Ortigas or Makati di ba? Wala pang BGC noon, so I said, okay, I will transfer to Ortigas. And then, when I transferred to Ortigas, I just leased a floor, but sa Caloocan I owned it, so I took a gamble also. It was a calculated risk.

“When I started hiring, it was not an easy way up. I realized, for me, the most important is your HR kasi HR is the one that will hire good people; people that will be a good fit for the job.

“Every entrepreneur will tell you that you should invest in your people, but it is easier said than done. It’s a tough job, but we have to start from our culture-building, mission and our purpose, and our shared values, which is very important. And we are getting there.”

4| Know how to research and innovate to drive growth

It is important in today's ever-changing marketplace to stay ahead of the competition by constantly innovating and anticipating customer needs.

Companies must strive to offer the latest products and services as well as unique, creative solutions that entice customers and ensure their loyalty.

Innovation is key to staying competitive and successful in the long-term, as it allows companies to stay at the cutting edge of their industry and be the go-to source for customers.

One of the ways Po tried to differentiate his company from the competition is by introducing the most up-to-date product features and utilizing the latest technology available.

“Every stage is different. At first, its value for money, but now, you have local brands also offering value for money and you have to constantly differentiate yourself. Innovation is very important.

“Every year, we have to go to China or Switzerland to check on new technologies, or new products coming out to see how to fit it into our products.

“When you innovate, you must have efficiency from operation to production. The new technology now is yung diapers are very slim and yet they are absorbent. How do you change the mindset of the consumer in believing that makapal is medyo absorbent pero pag manipis, hindi. This is your job on how you educate the market.

“We also monitor the competition. It’s part of the market intelligence eh, so whenever there’s a new player coming into the market, we have to assess; is there a risk? Saan galing yung supply? We need to know how competitive they are and their technologies. We have to assess it, like is this a threat or not?

“To tell you honestly, I don’t pass a week without doing a trade check. I go as far as Sultan Kudarat or Cotabato area and even the whole of Luzon. Actually, weekly yan. We spend a lot of money for research and market data because marketing is very important.”

5| Know to how to be transparent to build trust

When corporate culture is based on openness and honesty, employees will feel empowered to take part in the company's vision. They will be able to comprehend the mission and feel motivated to come up with creative ideas and suggestions to help reach the goals.

Po promoted an atmosphere of openness, honesty, and effective communication in his organization. By keeping a transparent and open work environment, he created a level of comfort and security that is necessary for any relationship to flourish.

“You have to be fair to everybody,” he says. “Integrity is the most important. You have to talk to them straight. Even my staff, I tell them what’s right, what’s wrong, what’s the challenges, what is our opportunity. I tell them straight this is how I look at it and convince them.

“You need to be very transparent,” he adds. “If hindi mo kaya because you cannot make it, or you have a problem, just tell it straight, ‘baka di ko kaya, I cannot meet this one.’ And we will understand.”

Henry Ong, RFP, is an entrepreneur, financial planning advocate and business advisor. Email Henry for business advice [email protected] or follow him on Twitter @henryong888