Second-generation owners breathe new life into Chinese factories
As the first-generation factory owners are reaching retirement age, the most pressing question usually becomes: Who will take over?
By Zhang Shasha  ·  2023-08-28  ·   Source: NO.35 AUGUST 31, 2023
Gloria Liang writes down the measurements of a client's home for the customization of her factory's stainless steel products in Shenzhen, Guangdong Province, on August 1 (COURTESY PHOTO)

When her father's factory director failed to finish an order that was to be delivered the next day, Gloria Liang finally lost her cool. After a heated argument, the director threatened to resign. This startled her semi-retired father, who then decided to fly in from another city to mediate.

"It was like throwing pebbles into a pool of stagnant water," Liang, 27, told Beijing Review when describing her feelings about taking over her father's metal processing business. In her first six months at the helm, whatever efforts she exerted to reform the production processes all proved to be in vain, she explained.

After a lot of back and forth, Liang finally decided to heed her father's advice and reconcile with the director.

A golden decade

In Liang's eyes, her father was always "clear-headed." Thirty years ago, he left a remote village in the less-developed western part of Guangdong Province, south China, and came to the frontline of China's reform and opening up­—today's buzzing tech hub of Shenzhen in the south of the province.

From that point on, the family's story was rewritten. In 1993, Mr. Liang established his first metal plate processing factory in Shenzhen. As sales grew, he was able to install the city's third laser cutting machine, imported from Switzerland, in his factory in 2006. It cost him more than 4 million yuan (about $500,000 in 2006). The move gave him an edge over his competitors and ushered in a golden decade for his business. After that, he bought some advanced machinery from Japan and Finland.

Processing aside, her father also started producing high-end stainless steel kitchen cabinets, and at one point set up 13 stores as well as a three-story flagship store. But this new attempt wasn't as successful as his previous undertakings. So in 2018, he took decisive action, closed all stores and once again focused on the processing business.

Until 2020, Mr. Liang's business had enjoyed the stability of having consistent and big buyers. But the situation nosedived after the onset of the COVID-19 pandemic in early 2020, which, over the three years that followed, caused his clients' exports to decline, resulting in lower demand. To attract new customers, Mr. Liang in 2022 encouraged his daughter to make short videos promoting the business.

Results speak louder

Coincidentally, Gloria Liang had just quit her job at a leading real estate company and decided to help her father. This was the beginning of her career at the factory.

In the first six months starting from June 2022, she mainly handled the factory's legal, financial and human resources affairs. Although she had fixed many contract errors and optimized business processes, her colleagues still considered her a junior.

She then decided to shift to the areas where she could play to her strengths. A former regional sales winner, Liang has been conducting online marketing since January of this year, running eight social media accounts on platforms such as the lifestyle and e-commerce app Xiaohongshu (literally "Little Red Book") to introduce herself, the factory and its products. As of June, the online channels had generated 1.4 million yuan ($192,233) in sales, with each order worth about 30,000 yuan ($4,119). And new customers continued to visit her factory offline.

Seeing the vibrant scene, her colleagues began to look at her with different eyes. She reformed the sales system so that everyone could be part of the sales system and get a percentage. Plus, under her leadership, the factory expanded its product line. All in all, Gloria Liang is now on the right track.

In Guangzhou, capital of Guangdong and a one-hour train ride from Shenzhen, second-generation factory owner Luo Zi is running her family's cosmetics business. But her taking up the position did go against her original plan to become an entrepreneur in her own right.

"When you succeed, people will say you're standing on the shoulders of giants, and when you fail, they'll say you're not making the most of being in pole position," Luo told Beijing Review. Having excelled in school, Luo was determined to prove herself in business. She has launched several startups since she was 18. But none of them lasted.

At her father's advice, Luo joined the family business in late 2019. The ensuing pandemic was like a baptism by fire for the then 23-year-old. Orders from beauty salons, a major source of customers, began to decline and the factory faced many difficulties in resuming normal operations.

Luo then made a big decision—the factory would start producing hand sanitizer. By then, the authorities had relaxed related policies and allowed cosmetics companies to produce disinfectant products. Luo produced the products within 15 days and distributed them to local hospitals, the women's federation, and her alma mater at no cost.

"I never thought that it would turn into a big business, but from that moment on, I had a whole new customer base of my own," Luo said.

Twenty years ago, Luo's father moved to Guangzhou from Jiangxi Province in east China and created a reseller business focusing on cosmetics. To ensure every single product he sold was of good quality, he started his own factory.

Today, Luo carries on the family legacy and puts her own contemporary stamp on it. For example, to improve customer experience, Luo oversaw the design of a mini program, a sub-application within the ecosystem of China's ubiquitous super app Weixin, which presents over 3,000 formulas for customers to match their needs and categorizes formulas by function to offer modularized options.

The mini program has shortened the time of new product development from 60 days to 30 days.

Luo has further upped the factory's new media efforts by promoting their products on her personal social media accounts, and has created a brand-new department specifically intended to serve emerging cosmetics brands.

"Whereas my father serves his clients better than I can, I can better serve customers my own age," Luo added. A new factory in Guangzhou with Luo as the No.1 shareholder will open in October.

Luo Zi checks different packaging colors for her cosmetic products at a printing house in Guangzhou, Guangdong Province, in March 2020 (COURTESY PHOTO)

Two generations

The 1980s to 2000s witnessed an explosive upsurge in China's private sector with first-generation factory owners harnessing the momentum of the country's reform and opening up that first took off in 1978 and laying the foundation for family prosperity through vision, guts and persistence. But as this first generation is reaching retirement age, the most pressing question usually becomes: Who will take over? A proper passing of the baton determines the ongoing success of both a company as well as its founder's legacy.

Second-generation factory owners like Liang and Luo have started their journey in the new era, brimming with new opportunities. Both have had the opportunity to study overseas and see what's out there. And both agree that with more modern methods of communication, the chances of being noticed are increasing. But with the supply-demand relationship inverted in China, they also face the pressures of a rat race.

"In my father's era of insufficient supply, the speed of making money depended on the speed of production," Luo said. "Today, the emergence of online platforms and the increasing consumer quest for new, niche brands push us to update our products more frequently." Liang echoed this sentiment, adding that the proliferation of small factories across China has had the effect of flattening profits.

The past few decades have seen great changes at all levels of Chinese society. But for factory owners, old and young, their family business continues. Liang's family insists on producing high-end products. Once, when she proposed to lower their prices to allow the company to better compete in the e-commerce field, her father flat-out refused, a decision his daughter has gradually come to understand. She's finally realized that the secret to her father factory's success had always been the high quality of the products and his impeccable sense of timing.

When she was embroiled in the dispute with the factory director, her father at one point told her, "I know all about the problems we're having, but it's not the right time to address them—we're still not strong enough."

Luo, on her part, no longer pursues self-made entrepreneurial success, but has now set her sights on bigger things­­­­­­—selling Chinese cosmetics brands overseas at decent prices. She's taken the baton from her father and has since gone on to raise the bar. BR

(Print Edition: Father to Future)

Copyedited by Elsbeth van Paridon

Comments to 

China Focus
Special Reports
About Us
Contact Us
Advertise with Us
Partners:   |   China Today   |   China Pictorial   |   People's Daily Online   |   Women of China   |   Xinhua News Agency   |   China Daily
CGTN   |   China Tibet Online   |   China Radio International   |   Global Times   |   Qiushi Journal
Copyright Beijing Review All rights reserved 京ICP备08005356号 京公网安备110102005860