Core Viewpoint - The founder of Lao Gan Ma, Tao Huabi, has returned to the forefront of the company to address declining sales and quality concerns, leading to a recovery in revenue after a challenging period [1][20]. Company Background - Lao Gan Ma was founded by Tao Huabi in 1996, initially starting as a small food stall before evolving into a well-known brand recognized both nationally and internationally [3][6]. - The brand has become synonymous with Chinese chili sauce, achieving significant sales and brand recognition globally [3][4]. Recent Developments - Recent discussions on social media have raised concerns about changes in the flavor and ingredients of Lao Gan Ma products, prompting the company to deny any alterations to its original recipe [1][4]. - The company reported a revenue of 53.91 billion yuan for 2024, marking three consecutive years of growth, attributed to Tao Huabi's return to active management [1][20]. Management and Leadership - Tao Huabi, who has been a pivotal figure in the company, initially stepped back from daily operations in 2014 but returned in 2019 to address operational challenges and restore product quality [3][19]. - The company operates under a family business model, with Tao Huabi transferring shares to her sons, who now manage different aspects of the business [15][19]. Challenges and Market Position - Lao Gan Ma has faced various challenges, including rising raw material costs and increased competition from emerging brands, which have pressured its market position [18][21]. - Despite these challenges, the company has chosen to focus on its core product line without diversifying into new markets or extensive marketing campaigns [20][21]. Future Outlook - The company is at a crossroads, needing to balance maintaining its traditional values while adapting to modern market demands and consumer preferences [21][22]. - Tao Huabi's commitment to the brand remains strong, emphasizing the importance of perseverance and dedication to the company's success [22].

Core Insights - The article highlights the remarkable recovery of Lao Gan Ma, achieving a sales figure of 5.391 billion yuan in 2024, just 12 million yuan short of its historical peak in 2020 [1] - The brand's resurgence is attributed to the founder, Tao Huabi, who employed unconventional strategies to navigate the competitive landscape of the chili sauce market [2] Company Performance - Lao Gan Ma holds approximately 20% market share in the domestic chili sauce market, maintaining its position as the industry leader, with competitors' combined market share barely matching it [3] - The brand's revenue had previously declined from 4.5 billion yuan in 2016 to 4.2 billion yuan in 2021, facing significant challenges from emerging brands [5] Leadership and Management Changes - In 2014, Tao Huabi stepped back from daily operations, handing control to her sons, which led to a series of mismanagement issues that undermined the brand's foundation [5][7] - The new management's cost-cutting measures, including substituting core ingredients with cheaper alternatives, resulted in a loss of product quality and consumer trust [7][9] Recovery Strategies - In 2019, Tao Huabi returned to the forefront, prioritizing product quality by reinstating original core ingredients despite increased costs [12] - The brand's marketing strategy diverged from industry trends, as Tao disbanded the live-streaming team and focused on enhancing offline distribution channels [14][16] - Lao Gan Ma expanded its presence to over 160 countries, achieving a 30% increase in overseas revenue in 2023, with significant growth in export figures in early 2024 [16] Financial Strategy - The company adheres to a conservative financial strategy of not taking loans, not seeking external financing, and not going public, allowing it to focus on quality improvements during downturns [18] Future Challenges - Despite the current success, concerns remain regarding the succession of leadership as Tao Huabi approaches her 80s, with the ability of her sons to uphold her business philosophy and quality standards being crucial for the brand's long-term sustainability [20] Conclusion - Lao Gan Ma's journey serves as a lesson for entrepreneurs, emphasizing the importance of focusing on product quality and maintaining core business principles in a rapidly changing market environment [21]

Core Viewpoint - Lao Gan Ma, a traditional food brand, has successfully achieved growth despite withdrawing from online sales and promotional activities, demonstrating a unique strategy in a rapidly changing market [2][7][12]. Group 1: Sales Performance - Lao Gan Ma's sales reached 5.391 billion yuan in 2024, nearing its historical peak of 5.403 billion yuan in 2020 [2]. - The company experienced a sales increase from 4.2 billion yuan in 2021 to 5.26 billion yuan in 2022, and close to 5.4 billion yuan in 2024, marking a nearly 30% growth over three years [7][8]. Group 2: Strategic Decisions - In October 2022, Lao Gan Ma disbanded its live-streaming team and ceased online operations, a move seen as counterintuitive during a time when competitors were heavily investing in e-commerce [4][5]. - The decision to withdraw from online channels was based on the observation that e-commerce sales never exceeded 5% of total sales, while online marketing costs accounted for over 30% of the total marketing budget, leading to an unsustainable investment-to-return ratio [5]. Group 3: Product Focus - Lao Gan Ma's growth is attributed to its unwavering commitment to product quality and taste, returning to its original recipe after a previous change negatively impacted sales [9][10]. - The company invested billions to upgrade production lines and established exclusive planting bases in Guizhou to ensure consistent quality [9]. Group 4: Market Strategy - While competitors focused on online channels, Lao Gan Ma concentrated on strengthening its offline presence, partnering with major retail chains and expanding its distribution network across the country [12]. - The brand maintains a dominant market share of around 55% in the chili sauce category, with competitors holding single-digit shares [12]. Group 5: Long-term Vision - Lao Gan Ma's founder emphasizes a steadfast approach to business, focusing on core competencies without being swayed by market trends [13]. - The company is exploring new product lines aligned with health trends while ensuring that classic product recipes remain unchanged, highlighting a commitment to long-term sustainability [15].