Summary of the Analysis
This obituary provides a comprehensive account of the legendary life of Li Tuchun, the founder of Taizi Milk. As one of the most representative private entrepreneurs during China's early consumer goods industry, he resigned from a state-owned enterprise at the age of 30 with just 300 yuan and ventured south to start a business. He made his first fortune by selling commemorative calendars. In the 1990s, he saw the untapped potential of the lactic acid bacteria market and decided to invest, even borrowing money to bid for a spot on CCTV. He won the bid with a bid amount of 88.88 million yuan, far exceeding his own assets, and within less than 10 years, he turned Taizi Milk into a national brand that dominated 70% of the fermented lactic acid bacteria market, with annual sales approaching 3 billion yuan.
However, his aggressive expansion and decision to bring in foreign investment led to a performance-based contract. In 2008, the global financial crisis caused banks to withdraw their loans, breaking his capital chain and leaving him with a debt of 2.6 billion yuan. As a result, he lost control of the company he founded. Taizi Milk later went bankrupt and was acquired by Sanyuan. Today, its annual revenue is only a little over 13 million yuan, and the brand has become marginalized. In his later years, despite his age, Li Tuchun attempted a second business venture with the brand "Zicheng Milk," hoping to replicate his past success. But the market for lactic acid bacteria was already saturated, and his approach was outdated. His efforts were met with resistance from distributors and consumers, and the project ultimately failed. He passed away at the age of 66, never realizing his brand vision. His rise and fall perfectly reflect the entire cycle of China's consumer goods industry from its infancy to saturation, making him a typical example of a private entrepreneur of that era.
Detailed Analysis
1. Why was borrowing money to win the CCTV bid such a successful move?
Many people find it crazy that Li Tuchun would borrow 88.88 million yuan for advertising and bid for a spot on CCTV, but in the 1990s, this was the fastest way to get rich. At that time, information was limited; almost every household watched CCTV. Without social media or various forms of offline advertising, appearing on CCTV's prime time was equivalent to reaching a nationwide audience of 1 billion people. There was no need for sophisticated marketing or market research; orders would come in automatically. The lactic acid bacteria market was virtually untouched, with companies like Wahaha and Lebasie not focusing on this category. By winning the bid, Taizi Milk quickly became the market leader. It wasn't so much about his betting strategy as about seizing the benefits of a highly concentrated market with no competitors.
2. Why did bringing in foreign investment result in losing control of the company?
Many think that investment means capital is given to you for free, but in reality, the 73 million yuan from Morgan Stanley and Goldman Sachs came with a conditional agreement: if Taizi Milk's performance did not meet the agreed-upon growth targets, Li Tuchun would have to transfer most of his shares to the investors. Li Tuchun, confident after his previous success, failed to prepare for the financial crisis of 2008. The banks withdrew their loans, and his investments in new production bases and businesses dried up, leaving him with a huge debt. The investors took control of the company, a common mistake for many early private entrepreneurs who were unacquainted with such contractual terms.
3. Why has the once-dominant brand's annual revenue dropped to just over 13 million yuan?
After the bankruptcy, Taizi Milk was acquired by Sanyuan and later by Xinhualian, which bought out all remaining shares. Today, its revenue in the first half of 2025 was only 13.46 million yuan, with a loss of over 400,000 yuan. The reason is simple: the market for lactic acid bacteria has changed dramatically. Brands like Yili's Youyi C and Junlebao's Lechang have dominated the market, and the leading dairy companies control the supply chain and distribution channels. Taizi Milk's brand has aged, and younger generations are unfamiliar with it. The state-owned companies that acquired it lacked Li Tuchun's entrepreneurial drive, making it difficult to attract new customers.
4. Why did his second attempt at entrepreneurship fail?
In his later years, Li Tuchun launched "Zicheng Milk" with the goal of reaching 10 billion yuan in three years, but his old methods were no longer effective in the mature market. The lactic acid bacteria market is highly competitive; a new brand needs substantial capital, unique selling points, or innovative marketing strategies. His reliance on his past reputation as the founder was insufficient. His attempt to use a prepayment model for annual subscriptions was too ambitious, and his company faced logistical and financial challenges, leading to failure.
5. Why is Li Tuchun a symbol of his generation of entrepreneurs?
Entrepreneurs like Li Tuchun, Zong Qinghou, Ren Zhengfei, and Liu Chuanzhi shared a bold and aggressive spirit that helped them build businesses from scratch. However, this confidence often led to overconfidence and a lack of risk awareness. Li Tuchun continued to take risky bets despite being in debt and faced a saturated market. His story illustrates how the rules of the consumer goods industry have changed, and the success of the past no longer guarantees success in today's competitive environment.
Li Tuchun's life is a testament to the challenges and opportunities faced by early private entrepreneurs in China's consumer goods industry. His story highlights the importance of adapting to changing market conditions and the role of risk management in business success.