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Succession questions raised as family firms face hurdles

Inheritors of successful businesses built a generation ago try to cope with economic changes

By Yu Ran in Shanghai | China Daily | Updated: 2024-08-08 07:07
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Gao Lin inspects the quality of Shunfa's meat products in Linyi. PHOTO/CHINA DAILY

Returnees adapt

About 83 percent of second-generation successors have overseas educational backgrounds, according to the Hurun Research Institute's 2021 China Family Business Inheritance Report.

Gao Lin, 34, graduated from the University of Liverpool in the United Kingdom with a business degree and Australia's University of Sydney with an MBA.

She said earlier she had mixed feelings about her father's business, Linyi Shunfa Food Co, a leading pork processing company in Shandong province.

"It provided me with relatively affluent material conditions, but I also resented this enterprise for depriving me of time with my parents," she said, recalling the hardship in the early days of the business being established.

During her university years, her holidays consisted of getting off a plane looking like a well-dressed young woman, then going to the family's small flat, changing into work clothes and heading to their butcher shop to cut and weigh meat for customers while her mother managed the cash register.

Gao began studying for her MBA in 2021 to prepare for the succession. "Rather than being a successor, I'm more like a flexible worker who goes wherever I'm needed," she said, describing her first three years at the company.

She now manages her own team and oversees some sections of the business. Gaining experience has made her aware of her shortcomings. "In our industry, experience outweighs ability, so I must constantly remind myself to keep learning in order to become more well-rounded," said Gao, who immersed herself in factory operations for three months to learn every aspect of the business.

About 62 percent of second-generation successors choose to return to the family business, data from the China Family Business Research Centre at Renmin University of China in 2022 showed. Approximately 68 percent of the successors implemented some form of business transformation after taking over, the data indicated.

Gao has been instrumental in modernizing the company's approach, particularly in e-commerce and brand recognition. Under her leadership, Shunfa has collaborated with top livestream sellers, achieving annual sales in the tens of millions of yuan through online channels.

"Innovation is not about breaking conventions but adding icing on the cake. I'm quick to surf the internet and have the ability to accept new things, so I went into e-commerce," she said.

Gao envisions Shunfa becoming a household brand synonymous with safe meat products. "I hope that in the future, people can buy Shunfa pork in any supermarket they walk into," she said.

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