MANILA, Philippines—At 43, Donnie Tantoco is a third-generation scion who’s proving false the common business notion about third-generation scions—that they’re there to squander what the first generation has built and the second generation has grown.

Now president of Rustan’s Supercenters, Inc., which owns and runs Shopwise, the pioneering hypermart in the country, and Rustan’s Supermarket, Tantoco pioneered and crisis-managed the Tantoco clan’s duty-free stores during and in the aftermath of the 1997 Asian crisis, grown and innovated on the hypermart concept in the country, and, from all accounts, works well with—and for—people.

From bottom-line results to people skills—that is pretty much an enviable package that doesn’t automatically spring from one’s genes or as a birthright.

And Tantoco has a trait/achievement that must leave his fellow scions in awe—he can work with his wife. Indeed he works well, and happily, with wife Crickette Yu at Shopwise, although Crickette has now (in her own words) “retired.”

As in other Filipino business empires, the Tantoco third generation is well-placed within the family group. But unlike many other ruling clans, this generation seems to be not only driven but also intent on paying its dues.

Like brothers

Stores Specialists Inc. has been steadily and aggressively steered by Tantoco’s (just a bit) younger cousin Anton Huang. Another younger cousin, Noey Lopez, is in charge of the Starbucks chain.

Donnie says Anton is like a brother to him. They are that close. That is curious because it is, again, unlike in other clans where the younger members can’t work in unison.

“My lolo (Ambassador Bienvenido Tantoco) is very good in uniting us, like putting us together in projects,” Tantoco says. We are talking over lunch, and Donnie’s eyes light up as he talks warmly about his lolo and Anton.

Turns out, not only did the elder Tantoco make them work together early on, he also made them live together. When the patriarch was the country’s ambassador to the Holy See in the ’80s, he brought Donnie, Anton and Donnie’s younger brother Joel to live with him and his wife Glecy in Rome.

“So we were like brothers,” Donnie fondly recalls that adolescence. “It was our first taste of freedom from our parents. We traveled around, learned to watch out for each other and, later, even through personal crises.”

Today, Tantoco is on top of eight Shopwise stores and 23 Rustan’s supermarkets all over the country. As it celebrates its 11th year, Shopwise opens its eighth store on Commonwealth.

This chain made P14 billion in sales this year, up by a billion from 2006, without them having to open an additional store—a turnaround accomplished through some measures.

A few years before that, the supercenter group was losing in the high-end market (Fresh chain) because of its debt, even with its sound strategy. The group injected money, and with the young Tantoco at the helm, took some drastic steps.

“Fresh has become known for gourmet, international products. We brought them back but this time at affordable prices. We did it by direct sourcing, by cutting out the middlemen,” Tantoco recalls.

A graduate of Connecticut College in the US, with a summer internship at Pepsi and an MBA at Kellogg University, Tantoco, the eldest grandchild of the Tantoco clan, didn’t right away work for the family business. He cut his chops, so to speak, in the US, from being a hamburger helper at Burger Machine, then on to General Mills in Minnesota, and to a retail chain in Manhattan.

Blind date

It was while toiling away in Manhattan that he got close to his friend Crickette. They would take lunch breaks together, away from their jobs at Ann Taylor and Bloomingdale’s. Not so many people know that Donnie and Crickette shared retail work experience at the onset.

“She was so good at her job, she’d tell me how to fix my merchandise,” Tantoco talks in admiration of his wife, as he always does.

The two met on a blind date. It was the Assumption Junior-Senior Prom. Crickette wasn’t being allowed by her folks to go with her boyfriend. Donnie’s aunt, Maritess, who was Crickette’s friend, didn’t want Crickette to miss her prom, so Maritess volunteered her eldest nephew to be her date.

“We hit it off right away,” Tantoco says, a glint in his eye. It is obvious how Tantoco, with their youngest already 15 years old, remains so in love with his wife.

Inevitably, Tantoco came home to work in the growing retail empire. He’s done so for 16 not-so-easy years.

In 1993, when 3 million visitors came to Subic a year, the ambassador knew it was time to operate a duty-free shop, Royal Subic, and put his eldest grandchild on it. It did well until 1997, when the regulation came that only people who lived in Subic could buy at the duty-free market.

Royal Subic’s market vanished in a blink, and the Asian crisis that ensued was poised to put the Tantoco duty-free out of business, given its P400-million loan. It was at this point that the Tantoco scion had his baptism of fire.

“We had to cut costs and eventually reorganize just to tide us over,” says Tantoco. He and the other managers had to take a pay cut to avoid laying off people.

“It was at this point that my lolo told us to find another business if only to save jobs.”

It was a crisis that yielded opportunity. Shopwise was conceived as a one-stop shop, a hypermart that would address a growing market: the working mom who had no time to hop shops and thus needed to find her grocery and lifestyle needs under one roof—from food to clothes to home decor.

“It was the convenience destination for the time-starved working mom,” Tantoco describes the Shopwise concept.

On hindsight, Tantoco didn’t only step up to the management plate, he also shone with his age-old values that nurtured loyalty and relationships above all else. His stint at the helm of Shopwise is best summed up by a subordinate who pinpointed his strength: “He is a leader who can get people to follow him.

That’s a testimony that augurs well for a third-generation scion who breaks away from the born-with-a-silver-spoon stereotype.

What also makes him a cut above the rest of the jaded young tycoon breed is that he enjoys his marriage and his three children—is exuberant about them, in fact. His face lights up every time he talks about them and his lolo.

And, while other young titans are into being an Ironman, Tantoco, who runs 5 km every day and has been doing it since he was 17, self-deprecatingly stresses that he’s not into triathlon, he’s “only into breathing.” (He attends breathing sessions that have energized him and cured his insomnia.)

Q&A

From management philosophy to values, Tantoco, in this Q&A, makes one proud of the emerging Filipino breed of industrialists and businessmen.

Do you enjoy your work?

I do. I’m working with people who love retail—it’s in our blood, the passion we share. And I’ve great respect for the family members I work with—Crickette, Frances (Yu, his sister-in-law), Maricar Lopez (his cousin), Anton (Huang), Noey (Lopez).

How do you think your generation would buck the trend of the third generation squandering their inherited fortune?

It comes down to work ethic. One just has to be hardworking, being in an environment where you are a second-class citizen if you don’t work hard, an environment where the greatest respect is for those who work hard. We’re not really great in the work-life balance department. (Laughs) And my lolo is very good in uniting us.

What is your business relationship like with each other in the family?

We try to be as transparent as possible. I like to think that our generation is evolving meritocracy in the workplace. We’re aware that to be successful, we must attract the best people, who may not necessarily be family. We’re learning not to mix management with the board. Shopwise, for instance, has outside investors, although the family owns 55 percent.

It is said that you’re the closest to your lolo, and that you’re the favorite.

I feel like I’m the favorite. (Laughs) I share his people-oriented values. He always says: “Kung animado ang tao mo, panalo ka na.” (If your people are animated, you win.) There must be malasakit. At the end of the day, our mission is to win the lifetime loyalty of our employees and our customers. Retail is no rocket science. Anybody can grow, there are opportunities for everyone, but it’s how you engender relationships that makes the difference. With my lolo, we talk animatedly about everything. I notice he’s not religious but he is spiritual. He knows how to live life to the full.

In business, today’s consumers are savers, so you must work very hard to make them spend. Your prices must be competitive, but there must be high-level service, a high level of trust. We’re in a situation where customers are tightening their belts while expecting high standards.

How about the competition?

It’s more of knowing how the consumer behaves. It’s like in tennis—your focus must be the ball. That’s your customer. Your eye on the ball, rather than on your opponent.

Last year, Shopwise was one of the few businesses where sales grew. Retail is character-building. It pushes me to be a good leader so one can have the moral authority.

How do you, an owner, handle working with professional experts right in your own company?

The challenge is in extracting from the experts all the knowledge you can and adapting it to local conditions—how to be aligned with the foreign expats and at the same time be rooted in Philippine conditions.

The goal is to have multinational competencies married with Filipino values. Our success depends on how we can motivate our 3,000 people.

You’ve talked about Crickette. Can you describe your children?

I’m proud of my children—they’re real, true to themselves. Christian, 15, is so into basketball and is in the Ateneo team. I saw his passion (for basketball) even when he was a kid, when I watched him as he watched basketball. Nicole—the only way she feels fulfilled is when she works with people and helps people. At Ateneo, in their civic work, she worked with a fish vendor for four weeks and really learned a lot. Camille is into painting. She’s street-smart. She loves fashion, and she can sing well.

Are you getting over Joel’s sudden death? (Joel was his younger brother who died suddenly two years ago of pancreatitis.)

I feel him. I dream of him every week. Prayer—that’s the only way to make sense of something that doesn’t make sense.