an apple a day

Rival publishers gang up on him, the Chinese government can't stand him, and some investment banks refuse to do business with him, but Hong Kong readers just love Jimmy Lai. The entrepreneur who revolutionized Asian retailing, Lai today runs a thriving media empire that seems to get stronger as it gets bolder. Last summer, he launched his most ambitious publication yet, a Chinese-language tabloid called Apple Daily. All 200,000 copies of the first issue sold out within hours and the paper is now probably Hong Kong's most popular daily, feeding the colony's insatiable appetite for crime, cheesecake, horse racing -- and honest reporting in a momentous period. Lai is pulling no punches as Hong Kong braces for Chinese rule in 1997 and other media barons pressure editors to avoid stories that might anger Beijing. Deep pockets and a disdain for convention have made him perhaps the last, best hope for press freedom in the colony.

 Hong Kong journalists could not have found a more unlikely savior. The forty-seven-year-old Lai, a native of Guangdong Province across the border from Hong Kong, first achieved prominence in the 1980s as the founder and chairman of Giordano, a discount clothing retailer. After a brief, unsuccessful attempt to market expensive apparel, he turned to casual wear in the mid-1980s. Shunning budgets and most other standard business practices, he quickly built Giordano into Asia's version of The Gap. The company now has more than 700 stores across the region generating $370 million in annual sales; Lai's net worth is said to be around $300 million.

 Like many in Hong Kong, Lai says he was outraged by the 1989 Tiananmen Square massacre in Beijing. Shortly after the crackdown, he decided to bankroll a magazine that would give voice to Hong Kong's hopes and fears at a critical juncture in its history. The magazine, Next, made its debut in 1990; brash and brimming with controversy, it was an instant success. Paid circulation is currently around 165,000, though Lai thinks it reaches a million readers a week. He does not hesitate to use Next as a platform for his own views. He wrote a column two years ago telling Prime Minister Li Peng of China to drop dead; mainland officials retaliated by temporarily closing the Giordano outlet in Beijing.

 Lai has since moved to disassociate himself from Giordano, a process hastened by the emergence of Apple Daily (so named, says Lai, because "If Eve didn't bite the apple, the world would not have news because the world would not have evil. News comes from that one bite"). While he retains a controlling interest in Giordano, he handed over management of the company last year and now considers himself a full-time journalist. He works out of the Apple Daily offices and participates in most editorial meetings -- not as a boss, he claims, but as a colleague, adding that editors are under no obligation to heed his advice: "I am very much involved, but I only suggest. I don't intervene and I never make decisions for them."

 Lai has brought to Apple Daily the same marketing skills he used to make Giordano so successful. With plenty of color and lots of photos, Apple Daily is designed to appeal to a Hong Kong generation reared on television. The interests of his readers clearly dictated the way Lai organized his staff: 40 reporters concentrate on political topics while 100 write about life-style issues and another 90 cover crime. Apple Daily stays abreast of Hong Kong's ever-changing tastes by holding weekly focus groups in which participants are paid around $50 each to share their thoughts about the paper with the editors.

 Lai does not believe that Apple Daily'sappeal is limited to its tabloid fare. He contends that the self-censorship practiced by many of the colony's Chinese-language journals in the run-up to 1997 has left readers desperate for a paper that does not shy away from honest reporting. "Someone has got to tell the truth," he says. "A lot of other newspapers try to hide critical coverage of China on the second or third page. We put on the front page what we think Hong Kong people should know."

Lai's decision to hire the controversial columnist Chan Ya is one indication of just how different Apple Daily is from many of its competitors. In 1994, Chan's column for Express Daily News was suspended after she wrote a series of articles criticizing China for its arrest of Xi Yang, a reporter for the Hong Kong daily Ming Pao. Until then, Chan had been one of the colony's few Chinese-language columnists still willing to tackle political issues. And that is what made her attractive to Apple Daily, says editor-in-chief Lo Chan. "She's an energetic writer," he says. "We think she has a sharp view on the issues in Hong Kong. We encourage our writers to point out what they think is right or wrong. We encourage criticism." Chan says she finds herself under far less pressure at Apple Daily. Recalling her days at the Express, she says, "The subjects of my interest and the style were the same as I'm writing for Apple Daily, but I had more 'advice' from the editor of Express."

For Jimmy Lai, candor has paid handsome dividends so far; Apple Daily was selling 300,000 copies a day by the end of its sixth month and was close to turning profitable. A free Saturday supplement, a tabloid within a tabloid, proved so popular that it was eventually spun off and sold as a separate publication. And while Lai was prepared to put $100 million of his own money into Apple Daily, he now thinks a $42 million investment will suffice.

But Apple Daily has not been universally well received. Lai's effort to cement his grip on the Hong Kong market suffered a setback in December when several rival dailies initiated a brutal price war that was clearly intended to punish the maverick publisher. Three papers quickly folded, and Apple Daily's circulation fell by around 10,000. The assault on Lai was hardly unexpected: Apple Daily had violated a long-standing pricing cartel when it hit newsstands at an introductory price of HK$2 -- about twenty-five cents. Other major publications were charging HK$5.

Nor are Lai's problems limited to the competition. His effort to get the shares of Next Media Group, the parent company of Next and Apple Daily, listed on the Hong Kong Stock Exchange was delayed for months because he was unable to find an investment bank willing to sponsor the deal; bankers eager to cultivate business in China were reluctant to jeopardize their opportunities by helping Beijing's least-favorite publisher. And while the mainland government no longer hassles Giordano, Apple Daily has been barred from covering several events in China open to other Hong Kong media.

 Will the Chinese attempt to stifle Lai after 1997? He doubts it. He believes Beijing will be eager to show that it can maintain Hong Kong's prosperity; silencing the colony's most prominent publisher will not boost investor confidence. Moreover, he is convinced that market reforms initiated by China's Communist regime will eventually cause its demise. Economic progress is creating a desire for greater openness and is clearly shrinking the role of the Communist party -- "a monopoly that charges a premium for lousy service" -- in Chinese life. Lai simply figures that time is on his side.

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