Summary of Key Points
This article focuses on ten cases of second-generation successors from private Chinese retail and fast-moving consumer goods (FMCG) companies, highlighting the vastly different outcomes of their transitions: some failed due to a lack of power (Zong Fuli), others were overwhelmed by industry trends (Xu Ruize), some struggled with reliance on single product categories (Shi Xun, Li Bosheng), some succeeded through innovation (Lu You, Wang Zening), some chose a cautious approach (Xu Yangyang, Wan Hongwei), and others' success is still to be proven (Li Hanqiong). The core conclusion is that the transition from one generation to the next is not merely a matter of passing over responsibilities; it is a comprehensive test of power control, industry adaptation, strategic decision-making, and the ability to overcome challenges. There is no one-size-fits-all solution, but genuine competence is key to ensuring the success of the business.
Detailed Analysis
1. Power is the “ticket” to reform: Without it, even the best plans are futile
Zong Fuli’s case is the most illustrative. She had worked at Wahaha for 20 years, launching new brands and managing subsidiaries, demonstrating her capabilities. However, she was ousted within less than 20 months of taking over due to a lack of power. Wahaha is a company with widely distributed equity, and Zong Qinghou did not grant her sole control. The company’s management was composed of veteran employees with fixed thinking patterns. Her attempts to modernize the brand and innovate distribution channels were hindered by resistance from within; reform requires resources, manpower, and financial support, which she lacked, ultimately leading to her resignation.
This shows that success in leadership requires not only competence but also the authority to make decisions. Without sufficient control, even the most sound reforms will fail.
2. Industry trends are more decisive than individual efforts: Old methods no longer work in a changing landscape
Xu Ruize from Poly Group was considered a solid successor with 17 years of experience in various roles within the company. Despite her efforts, Poly Group continued to lose money. The reason was the disappearance of traditional retail industry advantages: online shopping, instant delivery services, and discount stores were competing for customers, dragging down the entire sector. Her attempts at digitalization and community-based fresh food initiatives were well-intentioned but ineffective against these broader trends.
This highlights that before taking over, it is crucial to assess whether the industry is on a decline; if so, no amount of effort will reverse the negative trend.
3. The trap of relying on a single product category: Breaking this cycle requires patience
Shi Xun and Li Bosheng from Haoxiangni and Liziyuan faced this challenge:
- Shi Xun’s main business, which relied on red dates, suffered losses despite generating 866 million yuan in profits from other investments. His efforts to diversify into healthy snacks and dairy products did not yield quick results.
- Li Bosheng’s company, a leader in sweet milk, faced declining sales due to the shrinking market for its core product. His attempts at expanding into e-commerce and smaller packaging sizes were insufficient to offset this decline.
This indicates that if the business was built on a single product, it takes time and resilience to diversify successfully.
4. Unconventional inheritance models can lead to unexpected success
Some unconventional inheritance approaches yielded positive results:
- Uncle-nephew succession (Lu You at Youyou Food): Without the traditional authority structure, Lu You was able to innovate by introducing new flavors of pickled chicken feet and expanding into convenience stores and supermarkets. By 2025, revenue had increased by 34%, although profit margins decreased.
- Emergency succession (Wang Zening at Wanchen): Forced to take over at a young age, he focused on internal improvements such as supply chain optimization and brand development, expanding into overseas markets. Revenue and net profit both grew significantly.
These examples show that non-traditional paths can break through inertia and allow successors to innovate more freely.
5. Strategic choices determine success or failure: Staying the same or forging ahead?
Different strategic decisions led to different outcomes:
- Conservative approach (Wan Hongwei at Shuanghui): Facing declining revenue, he focused on optimizing products and reducing costs during a period of low pork prices. While his profits increased slightly in 2025, the company’s overall performance stabilized.
- Aggressive approach (Li Hanqiong at Yagor): She made a major move by acquiring Yintai Department Store to combine clothing manufacturing with retailing. Although Yagor’s core business was struggling, her efforts doubled its profits in the first quarter through new channels.
This highlights that successors must choose a strategy that fits the company’s actual situation.
Conclusion
These ten cases demonstrate that there is no fixed formula for successful succession. However, common elements include:
- The ability to drive change and control resources,
- Adaptation to industry trends,
- Breaking free from reliance on single product categories,
- Choosing the right inheritance model and strategy.
While the previous generation built the business through courage and industry opportunities, the next generation must prove their competence through innovation, effective management, and the ability to overcome challenges. As more second-generation successors take over, their actions will shape the future of China’s private enterprises for the next decade.