Lao Gan Ma, the Chinese chili sauce maker founded by Tao Huabi, had revenue of about ¥5.4bn (roughly $750m, our conversion) in 2025, which Chinese media call a record. Li Xin, its executive vice president and chief quality officer, gave the figure at Guizhou’s 2026 provincial quality conference (Eastmoney, The Paper). Tao Huabi, 79, is chair. She stepped back in 2014, passed her shares to her two sons, and returned in 2019 after sales slipped.
For families, it is a clear case of a handover in which ownership passed but the founder’s standards did not.
How Tao Huabi Built Lao Gan Ma
According to The Paper, Tao Huabi first ran a small noodle restaurant in Guiyang, turned it into a shop for her own sauces and foods in 1994, and set up the company in August 1996; Wikipedia says it was formally set up in 1997. It is still unlisted and follows a rule of “no loans, no financing, no listing” (Eastmoney).
The 2014 Handover and What Went Wrong
In 2014 Tao Huabi left front-line management and transferred her shares to her sons. According to The Paper, the elder, Li Guishan, holds 49% and the younger, Li Miaoxing, 51%, which gives him control; Wikipedia gives the split the other way round.
In 2015 Chinese media reported that the company had replaced Guizhou chilies with cheaper ones from Henan, about 7 yuan a jin against 12 to 13 (The Paper). Customers complained about the taste. Revenue fell from ¥4.549bn in 2016 to ¥4.389bn in 2018, according to figures cited by Wikipedia.
The Founder’s Return and the Numbers Since
Tao Huabi returned in 2019 and brought back Guizhou chilies. The Paper says she also lengthened the fermentation of the black beans from two months to 12. Revenue reached ¥5.403bn in 2020 (China News Service), fell to about ¥4.2bn in 2021 as raw material prices surged, then recovered: ¥5.26bn in 2022, ¥5.381bn in 2023, ¥5.391bn in 2024 and about ¥5.4bn in 2025 (The Paper, Eastmoney). In 2025 the company put in AI camera checks on its chilies, and The Paper says sorting staff fell from over 600 to 48.
Note the rounding: ¥5.4bn is level with 2020, not clearly above it. Our posts on succession in Asian family businesses and on why family fortunes fade show how common an unplanned handover is.
A fair caveat
Lao Gan Ma publishes no audited accounts. The 2025 figure was given at a conference, and earlier years come from provincial rankings and press reports. Sources disagree on the sons’ stakes and on when the chili switch began.
What to watch
- Whether the company publishes more than a headline revenue figure.
- Who will eventually follow Tao Huabi as chair, and whether her sons’ roles change.
- Whether it keeps its no-debt, no-listing line; online sales are still under 5% of the total (Eastmoney).
Questions to bring to your advisors
If we passed on shares before passing on the know-how, who would protect the product? Should ownership and management move together, or in stages with a way back? These are questions to bring to your advisors, not advice.
