Across China, family-run factories are passing to a new generation on an unprecedented scale. Can they overcome e-commerce challenges, rising costs, and family pressures to reshape their businesses for the future?
JIANGSU, East China — Stepping into her family’s textile factory, Mao Lu felt the weight of decades pressing down on her. The staccato clatter of sewing machines, the quiet focus of workers, and the faint smell of freshly cut fabric hung in the air — all daily reminders of what her parents had spent their lives building.
Now, that legacy was hers to save.
Mao had spent years studying abroad and building a career in Shanghai’s advertising industry. But after endless late nights, relentless pressure, and fleeting rewards, she longed for something more meaningful. In April, she left it all behind, drawn back by the promise, and challenge, of her family’s million-dollar business in Nantong, Jiangsu province.
Instead of stability, the 27-year-old found herself staring at plummeting sales, rising e-commerce competition, and a father reluctant to change.
“I kind of regret it now,” she admits, sitting in the office where her father has managed the factory for decades. “Why did I study advertising and media? If I had chosen dentistry or law, I’d have an independent career with better prospects. Now, by taking over the family business, my future is tied to the factory.”
Still, she tells Sixth Tone there’s something grounding about being back: “At least here, I can see the tangible results of my work.” For now, that’s enough to keep her going.
Across China, thousands of family-run factories like Mao’s stand at a crossroads, grappling with the largest wave of generational handovers in the country’s history. Established during the industrial boom of the ’80s and ’90s, these businesses thrived on steady demand and predictable growth.
But for their heirs, that certainty is fading. The dominance of e-commerce, a shrinking labor pool, and shifting consumer expectations are forcing factory owners to adapt quickly — or risk being left behind.
At stake is more than just family tradition. Manufacturing remains the backbone of China’s economy, contributing 26.2% to the country’s GDP in 2023 and nearly 30% of the global total. Among over 100 million private enterprises in China, more than 80% are family-owned, and nearly a third of those are concentrated in traditional manufacturing.
This generational shift has thrust the successors, often referred to as the chang’erdai or “second-generation factory owners,” into the spotlight. Unlike China’s dilettantish fu’erdai, or “wealthy second generation,” chang’erdai are celebrated for their grit in modernizing family businesses.
Much of this struggle is taking place online, with social media offering an unexpected lifeline for factory heirs looking to revive their businesses and reach younger consumers.
But the real test, many chang’erdai tell Sixth Tone, is not just to keep the business alive, but to adapt and thrive in a market that’s changing faster than ever — often in the face of resistance from the generation that built it.
Balancing act
Joining the family business was never part of Mao’s plan. With a degree in digital humanities from the U.S., she dreamed of a career in communications. She eventually landed a job at the global advertising giant Ogilvy in Shanghai.
In her first year, the relentless pressure took its toll — she lost 8 kilograms in just three months. The job consumed all her time and energy, yet her salary was only a few thousand yuan a month. “I felt like no matter how hard I worked or how well I performed, I was just a cog in a vast machine,” she tells Sixth Tone.
After nearly two years, she switched to a higher-paying advertising job with better prospects — only to quit after a single week. Mao recalls thinking: “I don’t know why I am doing this rubbish; no one cares, and I gain no sense of achievement.”
This April, she returned to Nantong and decided to try her hand at the family business. “Here, I can at least see the money I make,” she laughs.
Her family’s factory sits in Dieshiqiao, a hub for home textiles in Nantong. Spread across three floors, it is one of the few in the region capable of handling every step of production for a four-piece bedding set — from design and cutting to quilting and finishing.
But even with its capabilities, the factory is struggling to keep up. The rapid rise of online shopping has reshaped how consumers buy home goods, putting traditional dealers under pressure and eroding their customer base. “Many offline clients have shut down, and the factory’s sales have already dropped by 15% this year,” rues Mao.
Mao Lu at her family’s factory in Nantong, Jiangsu province, October 2024. Wu Huiyuan/Sixth Tone
According to Liang Qiang, dean of the Business School at Shantou University in the southern Guangdong province, the environment for running a family business has changed dramatically in recent years.
“Decades ago, success largely depended on courage and strong social connections. As long as you could produce enough products at minimal cost — whether in terms of money or time — you could compete effectively in the market,” he says, describing the early days of China’s manufacturing boom.
But today, the rules have changed. “Efficiency alone isn’t enough. Uncertainty is the biggest challenge,” adds Liang. “Some industries are now at critical junctures, facing turbulence or even decline. For these business leaders, the challenge is to endure these conditions, adapt, and find new growth opportunities despite shrinking demand.”
For many family-owned businesses, these efforts hinge on one critical strategy: moving online.
Click to thrive
Zhang Yi and her husband Yin’s first attempt at transitioning to e-commerce ended in disaster.
Shortly after taking over his family’s 20-year-old mattress factory in the eastern Zhejiang province, the couple launched a retail mattress brand to reduce reliance on a single major client.
But their first online store ended after they lost 200,000 yuan ($28,000) to a fraudulent operations team. In 2021, they hired a management group to run their e-commerce platform, only for the team to vanish months later. The office was relocated, the legal identity the group provided proved fake, and court summons went unanswered.
Zhang Yi (wearing a sleeveless top) and her husband, Yin Daoming (center, in black), introduce their product to visitors, July 2024. Courtesy of Zhang
Determined to recover, they started over with a clearer strategy. Zhang took charge of online marketing, focusing on digital branding and targeted traffic. Within six months, sales tripled.
“The early investment in traffic is finally showing results,” says Zhang. Their breakthrough came after they shifted focus to smart mattresses, a move that coincided with local government policies supporting digitization and innovation.
“We were lucky to catch the right opportunity at the right time,” she says.
For Mao, too, rebranding her family’s bedding line was the first step toward digital transformation.
Years ago, her father’s early attempts at online sales had failed. With her advertising expertise, Mao has now redesigned packaging, revamped the factory’s online store, and launched a social media account to showcase factory life and engage consumers about bedding quality.
“My father thought once the product was on the shelf, it would sell itself,” says Mao, adding that he often underestimated the time and effort required to engage with consumers in the digital age. “Sometimes he thinks I’m doing nothing when I was actually preparing new product listings or refining our brand story.”
For some successors, online platforms have become more than just sales tools — they’re avenues for connection and reinvention.
Screenshots from Huang Xiyi’s social media account. From Xiaohongshu
Last year, Huang Xiyi, a third-generation successor to a mechanical equipment factory in Guangdong, documented her experience on the popular lifestyle app Xiaohongshu. She detailed the strain of modernizing the factory, clashes over family values, and the isolation that comes with factory life.
The post struck a chord, garnering thousands of likes and replies while also inspiring other factory successors to share their own stories. It led Huang to establish an online community where second-generation owners could connect, exchange ideas, and support one another. “Like me, many others face the challenges of intergenerational inheritance and the clash between old and new ideas,” says Huang.
Today, her group, “Chang’erdai GoGoGo,” boasts over 4,700 members from various industries. The platform has become a hub for sharing resources, hosting forums, and collaborating on business ventures. Members even pool their expertise to accept customer orders and streamline product distribution.
This year, the group began recruiting city-based partners to co-manage operations and expand its reach, with 12 representatives from cities like Shanghai, Guangzhou, and even Boston in the U.S. already on board.
Screenshots from the social account for “Chang’erdai GoGoGo.” From Xiaohongshu
House divided
Yet some battles can’t be won with strategy alone: Often, the weight of tradition, family expectations, and the future collide at home.
Mao recalls the first time she suggested introducing bolder, more modern designs to the family’s bedding line. Her father, Mao Yonghui, 52, who oversees product design, shook his head firmly.
His minimalist floral patterns had earned loyal customers for decades. “Fragrant wine fears no hidden alley,” he said, quoting an old Chinese saying that quality sells itself.
Mao, however, wanted to experiment with more vibrant colors to appeal to younger buyers and even considered launching bedding sets for pets. But her father believed sticking to one specialized area was essential for maintaining the brand’s image. “Why fix what isn’t broken?” he argued.
Mao Lu looks on as her father, Mao Yonghui, inspects textiles at the family’s factory in Nantong, Jiangsu province, October 2024. Wu Huiyuan/Sixth Tone
Sometimes, resistance to change extends beyond the immediate family. Hu Yue, 38, from Shanghai, faced opposition from dozens of workers at his plant, a paper manufacturing business in the Xinjiang Uyghur Autonomous Region established by his father in 2007.
When Hu first stepped into his role in 2017, inefficiency was rampant. Workers relied on outdated methods, and a simple request for production data could take hours of searching through disorganized paperwork.
Determined to modernize, Hu spent months overhauling the system. He implemented office automation tools and designed a detailed data sheet for workers to record production metrics. Resistance was inevitable, he says.
“They were comfortable with the old ways, even if they were inefficient,” he says. But when a batch of defective products emerged, Hu quickly traced the issue using his new system, demonstrating its value.
Hu Yue (second from right) and his father (first from left) at work, December 2019. Courtesy of Hu
For Mao’s father, the challenge wasn’t just modernizing processes, it was rethinking deeply ingrained habits. Having built his business from scratch as a market vendor in northeastern China at just 22, he relied for years on methods that served him well.
But even he now admits that times have changed: designs that once sold for a decade may now struggle to stay relevant for a few months as customer tastes evolve rapidly.
“Back then, life was tough, and we had to fight for everything. For my daughter, it’s not the same,” he says. “All I hope is that she can focus and do one thing well. I don’t have great expectations. I just don’t want her to be too tired.”
Living up to her father’s high expectations is draining. “My father is very strict with me,” she says. He judges everything from her clothing to her personal life. Mao recalls an incident when he criticized her for wearing a wrinkled shirt, calling it unprofessional.
Since moving to Nantong, Mao has grappled with the constant pressure of both managing the factory and meeting her father’s expectations. She has no friends in town and lives in a room next to her parents, near the factory, leaving little room for escape.
“My only companions are the dogs and the cat at the factory,” she laughs. Every two weeks, her father allows her two days off to visit friends in Shanghai, but even then, the reprieve is fleeting. “In Shanghai, I can breathe, but then I have to come back here, and it’s like I’m right back in the same cycle.”
Mao Lu and her father Mao Yonghui in Nantong, Jiangsu province, Oct. 26, 2024. Wu Huiyuan/Sixth Tone
Future-proofing
The pressure often leads some successors to a difficult question: is it worth returning at all?
Zhang Fangzhou’s family’s clothing accessories business in Zhejiang generates 100 million yuan ($14 million) annually. Yet rising costs, shifting market demands, and pressure to pivot toward high-tech industries have cast uncertainty over its future.
Like many others, they’re now debating whether to relocate operations inland or even to Southeast Asia. The move could lower costs but at the risk of dismantling the supply chain advantages that have fueled their success.
“My parents aren’t too optimistic about the future of this industry,” says Zhang, who used a pseudonym citing privacy. “In another 10 years, the business might just shut down, and they could end up renting out the factory buildings as apartments.”
Currently pursuing a doctorate in artificial intelligence for health care in the U.K., Zhang feels distant from the family business. “If I go back home, it feels like I’ve wasted all this time studying abroad. I’d feel sorry for myself,” he says, adding that his expertise doesn’t align with factory operations.
Instead, Zhang plans to start his own business after completing his degree. “I still have the ambition to surpass my parents, though I know it’s challenging,” he says. “Starting a business today is daunting. I want to realize my own value — that’s also a way to surpass my parents.”
When there’s no successor willing — or able — to take the reins, family businesses face a stark choice: close their doors or entrust their legacy to outsiders.
For many older generations, the idea of hiring professional managers challenges deeply rooted traditions, where family control has long been equated with success. Yet, for larger enterprises grappling with survival, it’s an increasingly viable solution.
“Traditional inheritance values often lead to reluctance in bringing outsiders into management,” explains Liang, the business school dean. “Yet sustainable growth requires openness. By embracing external talent and resources, businesses can drive the innovation and flexibility needed to meet evolving market demands.”
This shift, however, remains gradual. While some families have begun to embrace professional management, traditional values still dominate many decision-making processes.
A 2022 report by Boston Consulting Group found that among China’s top 100 family businesses, 31% are passed down to family members, 54% are managed by internally trained executives, and only 15% are overseen by external managers.
For many, entrusting a non-family member with their legacy remains a difficult decision — one often taken reluctantly or as a last resort.
Mao Lu at the family’s factory in Nantong, Jiangsu province, October 2024. Wu Huiyuan/Sixth Tone
While Mao chose to take over the family business herself, her return wasn’t something her parents had expected. Instead, they’d hoped she would find a less demanding path — one far removed from the pressures of factory life.
“They think running a factory is too exhausting,” she says. “They were just surprised that working outside turned out to be harder.”
Despite the challenges, Mao is determined to make the most of her family’s legacy. She sees the factory not just as a business, but as a resource with untapped potential that she hopes to modernize and expand.
“Maybe one day, we’ll expand to Shanghai,” she says, picturing an office where her ambitions and the family’s legacy can finally align. “That’s my dream.”
Additional reporting: Wu Huiyuan; editor: Apurva.
(Header image: Mao Lu and her father Mao Yonghui pose for a photo in Nantong, Jiangsu province, Oct. 26, 2024. Wu Huiyuan/Sixth Tone)
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