---
title: "Distributor Bosses: Are You Ready to Let Your Children Take Over?"
description: "For a trading company, long-term, stable, and sustainable development is every boss's dream. As the older generation of distributors ages, the issue of succession by the younger generation becomes inevitable. This article discusses how to smoothly transition the business to the next generation and ensure its continued growth, focusing on the topic 'From Second-Generation Business People to Second-Generation Entrepreneurs: How to Build a Modern Trading Enterprise.'"
author: "New Distribution"
publisher: "New Distribution"
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published: "2017-02-03"
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# Distributor Bosses: Are You Ready to Let Your Children Take Over?

> For a trading company, long-term, stable, and sustainable development is every boss's dream. As the older generation of distributors ages, the issue of succession by the younger generation becomes inevitable. This article discusses how to smoothly transition the business to the next generation and ensure its continued growth, focusing on the topic 'From Second-Generation Business People to Second-Generation Entrepreneurs: How to Build a Modern Trading Enterprise.'

**Click to read the original article for details**
For a trading company, long-term, stable, and sustainable development is every boss's dream. As the older generation of distributors ages, the issue of succession by the younger generation becomes inevitable. How can children smoothly take over the business? How can the company continue to develop after the takeover? The following content revolves around the core topic of "From Second-Generation Business People to Second-Generation Entrepreneurs: How to Build a Modern Trading Enterprise," and explores the story of succession with you.

Zhang Feng, Partner and Chief Consultant of Hong Kong Musen Marketing Agency:
**Mainstream Shifts Place Higher Demands on Second-Generation Business People**
Zhang Feng believes that the second generation of business people has three distinct characteristics: first, they have wealthy parents; second, they have not experienced the arduous process of starting a business; third, they are mostly born in the 1980s and 1990s, and have significant differences in values compared to the older generation of distributors. Some second-generation business people take over actively, some passively, and some start their own businesses. Regardless of the method, the pressure faced by successors may be greater than that of their parents. On one hand, they fear doing poorly; on the other hand, there is emotional attachment, as the Chinese tradition of inheritance from parents and the five-thousand-year cultural heritage have a great impact on them.

Now, the business environment is changing, and consumer formats and mainstream shifts are bringing conflicts to trading companies, as well as placing higher demands on the second generation. In the next decade, how can the second generation rebuild the main structure of China's food industry and complete the transformation from "second-generation business people" to "second-generation entrepreneurs"? From a developmental perspective, this is undoubtedly a topic with a long way to go. Facing the challenge of breaking through, the second-generation entrepreneurs should no longer see themselves as ordinary merchants, but rather position their companies as modern trading enterprises.

To provide distributors with more vivid cases, Zhang Feng specially invited five outstanding distributor representatives to participate in the discussion on this topic.

* Wu Yue, General Manager of Jiangsu Huai'an Tianwei Food Co., Ltd. (mainly operating various seasonings)
* Zhang Xiangfeng, General Manager of Jiangsu Xiangshui Jiale Seasoning Wholesale (mainly representing various first-line brand seasonings)
* Ke Linyong, General Manager of Zhengzhou Guoyi Food Co., Ltd. (mainly representing leisure foods, with all-channel sales)
* Wang Wenbo, General Manager of Urumqi Jinyibo Trading Co., Ltd. Southern Xinjiang Sales Company (mainly operating leisure foods)
* Yang Xuanyu, General Manager of Liaoning Dandong Xuanyu Trading Co., Ltd. (engaged in FMCG and alcoholic beverages)

**Topic 1: From Outsider to Successor, What Was the Most Memorable Experience During the Identity Transition?**

**Yang Xuanyu:** My parents are not in this industry; they live abroad, so I started my own business. I was quite playful as a child. After turning 18, my parents stopped giving me money, so I found a job in sales and worked for about ten years. After getting married in 2013, my parents thought the time was ripe and gave me some financial support to start my own business.

**Ke Linyong:** From elementary school to high school, I was a boarding student and could only have meals with my parents on Saturdays, so I understood their hard work. Starting from junior high, I attended every company meeting and negotiation with manufacturers, and gradually developed an interest in the distribution industry. I chose business administration as my major in college, also to prepare for taking over the business.

**Wang Wenbo:** When I was young, I thought doing business was tiring and not very profitable. After graduating from university and joining the company, after a period of training, I began to identify with this career. I also felt that my parents were getting older, and as a son, I should take on this responsibility. Now, I hope that through my efforts, the company will get better and better.

**Wu Yue:** After leaving school, I was assigned to the American Anbang Group, working in the pesticide industry. Later, I returned to the family company, but I didn't take over immediately. In 2007, a food company arranged for me to study at Tsinghua University, which changed my thinking dramatically. I realized that if I didn't make changes, the family company would face great difficulties in the future. However, due to lack of experience, about a week after returning home, I had a verbal conflict with my father and then left home, traveling by train to Lanzhou, Chengdu, Xiangtan, and finally to Jiangyin, without contacting my family for over a month. In Jiangyin, a close friend advised me: "He is your father after all, and there is no irreconcilable conflict between you. You should go home."

Finally, I returned home with a very conflicted mind. When I got back, my father didn't blame me; it was as if my two-month absence had never happened. Moreover, he began to accept some of my practices. I also changed my communication strategy, trying every means to persuade him to let me take over completely. Therefore, communication between father and son must pay attention to methods.

**Zhang Xiangfeng:** The previous colleagues talked about taking over, but my situation is different because I need to find someone to take over from me. Twenty-eight years ago, I was laid off from a company and started my own business, dealing in seasonings. From having no brands at the beginning to now representing many first-line brands. After graduating from university, my children went to work in other companies, which is my biggest concern: no one to take over. At first, they weren't interested. My method was to influence them emotionally, and also to take them to visit my peers and friends, letting the older generation teach them. I found this very effective. From not knowing the industry to taking over, they are now doing better and better.

**Topic 2: After the Parents Completely Delegated Authority, What Were the Pain Points Encountered?**

**Ke Linyong:** At the beginning of delegation, the pressure was high. Besides being responsible for profits and losses, I had to set the company's future plans and direction, and also make employees cohesive, but many responsibilities were unclear. My solution was to use rules and regulations. Through various regular meetings, I had all employees create PPTs and report their work on stage, and then I summarized. This not only helped me understand employees' status and abilities, but also gradually clarified the responsibility system.

**Wang Wenbo:** After coming to the Southern Xinjiang branch alone, I found that some employees were lax and didn't cooperate with my work plans. I felt helpless and called my father, but he said, "If you can't handle a few salespeople, how will you take over the company in the future?" He insisted that I solve it myself. Later, I began to reflect, starting with market research, gradually understanding the company's operational processes, and then formulating improvement methods to show my abilities. Gradually, employees began to trust me and cooperate more with my work.

**Wu Yue:** My father started with large-scale distribution, so after taking over, I focused on making changes. First, I established a trading company with general taxpayer status and rebuilt the team. For the personnel left by the previous generation, if they couldn't adapt to new changes, they were replaced. So, the biggest problem after taking over was internal construction; there was a shortage of people, and we had to cultivate them slowly.

**Topic 3: What Are Your Suggestions for the New-Old Transition in Trading Companies?**

**Zhang Xiangfeng:** First, as times change and the older generation of distributors age, they should let go when it's time. Second, successors should have interest in your business and perseverance to continue. Third, successors can't learn all business skills immediately; help them learn step by step. Fourth, even if you know they will make a mistake, let them make it, but the older generation should control the scope of the mistake, tell them why they made it, and ensure they don't repeat the same mistake.

**Ke Linyong:** I like to discuss issues with my parents, especially work issues, even during meals, so I have a thorough understanding of the company's details, and the transition was smooth. Therefore, for the older generation, first cultivate the child's interest. If they are willing to take over, let them enter the company to familiarize themselves with the environment, then gradually develop their abilities. Don't be too impatient, which can improve the young person's psychological acceptance.

**Wang Wenbo:** First, mutual respect: the older generation should respect the ideas and opinions of the younger generation and provide more development opportunities. Second, give the younger generation more space, more encouragement, and less pressure.

**Wu Yue:** As a distributor, you should be steady and not take too many risks. First, assess your own value; second, constantly try new models beneficial to your development; third, manage your cash flow well and find more financing channels. Step by step, you will surely continue to grow.

Extended Reading: A Review of "Second-Generation Enterprise" Successions: Mixed Feelings!
The low willingness of the second generation to take over family businesses has become a major issue that must be addressed.

**Survey Shows Only 40% of "Second-Generation Enterprise" Are Willing to Take Over**
It is noteworthy that according to the "China Family Business Succession Report" released in 2016, only 40% of the surveyed second generation explicitly expressed willingness to take over, while 15% explicitly expressed unwillingness, and as many as 45% were unclear about their attitude towards succession.

Huang Hongsheng, founder and controlling shareholder of Skyworth, once publicly stated that although his son is young and promising, unfortunately, his son currently has no desire to take over, and he has not considered having his son manage the company, possibly following Midea's example of handing over to professional managers.

But even if children are willing to take over, the older generation must carefully plan to ensure a smooth transition.

**Multiple Children Taking Over: Preference for the Eldest Son**
In mainland family enterprises, the eldest son has an advantage in inheriting both management rights and equity. If the eldest son is capable and willing to take over, the enterprise can not only be smoothly passed down but also be carried forward.

Aerial view of Hengdian World Studios
Xu Wenrong, founder of China's Hengdian Group, set five conditions for choosing a successor: first, young and energetic; second, culturally educated; third, experienced, having run a factory or company with annual profits of at least 20 million yuan; fourth, capable of dealing with international markets; fifth, able to handle relationships with superiors, subordinates, and peers.

For Xu Wenrong, Xu Yong'an was not only the eldest son but also met his requirements for a successor, yet he deliberately had his other two children leave Hengdian Group.

After taking over the presidency at age 37, the capable eldest son Xu Yong'an immediately entered Qingdao Dongfang and implemented asset replacement, transforming it from a commercial listed company into a pharmaceutical technology listed company, Puluo Pharmaceutical, which became one of the most prominent stocks in China's capital market for many years.

In the following six or seven years, through capital strategies, Xu Yong'an successively acquired Taiyuan Gangyu and Zhejiang Nanhua Futures, became the fourth largest shareholder of Zheshang Bank, increased capital to control Tibet Securities, participated in the formation of Guolian Securities and Jiangxi Financial Leasing Co., Ltd., etc., transforming Hengdian Group from an industrial enterprise group into a modern enterprise group focusing on both industry and finance.

At the same time, Xu Yong'an, who studied in Japan, had a broader international perspective. In 2007, he personally led a team to the Cannes Film Festival in France to promote Hengdian's advantages to overseas production organizations.

Under his leadership, Hengdian Group established China Film Huana Hengdian Film Co., Ltd. in a joint venture with China Film and Warner Bros., and in April 2004, established the Hengdian Film and Television Industry Experimental Zone.

Today, Hengdian Group is known as "China's Hollywood" and is renowned worldwide. It is undeniable that the second-generation leader Xu Yong'an, who inherited and innovated, enabled Hengdian Group to achieve an "upgraded" power transition.

**But in cases of "preferring the worthy over the eldest," the two generations need full communication, otherwise it may lead to estrangement.**

Zhejiang Longsheng Group
Zhejiang Longsheng Holdings is a large enterprise mainly engaged in dye chemicals, one of China's top 500 enterprises, founded in 1970, with over 5,200 employees and assets of 5.2 billion yuan.

When Zhejiang Longsheng was listed in 2003, Ruan Shuilong served as chairman, his eldest son Ruan Weixing as general manager, and his second son Ruan Weixiang as vice chairman.

In April 2007, Ruan Shuilong handed over the chairmanship of Zhejiang Longsheng to Ruan Weixiang. Ruan Weixing, who had been "crown prince" for many years, left in anger and even severed his father-son relationship with Ruan Shuilong.

The company announced in 2011 that Ruan Shuilong, Ruan Weixiang, and Xiang Zhifeng (the fourth largest shareholder and Ruan Shuilong's son-in-law) declared that since August 1, 2008, they no longer had a concerted action relationship with Ruan Weixing in controlling the company, and promised they would never have such a relationship in the future. The relationship among the father and sons publicly broke down.

**Only Child Taking Over: Internal Cultivation Is Relatively Smooth**
Zong Fuli and her father Zong Qinghou
Zong Fuli, the "Wahaha Princess" who was already designated as the successor, studied at San Marino High School in California, USA, and later majored in international trade at Pepperdine University.

Zong Fuli, who is familiar with modern enterprise management systems and capital market operations, also agrees with her father's approach of not introducing "parachutists" and not planning to go public, maintaining the greatest understanding and preservation of Wahaha's traditional "family culture."

However, differences in educational background and living environment, coupled with a personality almost as strong and decisive as her father's, have led to many disagreements between the two generations on management concepts.

Wahaha has always had a highly centralized management model. This huge enterprise group with total assets of 32 billion yuan still has no board of directors, only one chairman and one general manager, both "independently undertaken" by Zong Qinghou.

This "concentration of power" is even reflected in a statement confirmed by Zong Qinghou himself: a branch company with an output value of over 100 million yuan needs Zong Qinghou's "approval note" to buy an electric vehicle.

Zong Fuli publicly opposed this people-oriented Wahaha system. She said: "They wait every day for the boss's (Zong Qinghou's) instructions, and then suddenly when they can't wait, they say, 'What should I do today? I don't know.' The company has systems, but these systems are virtually useless. Everyone is used to waiting for the boss's fax every night, then writing 1, 2, 3, 4, 5, 6, 7, and then who does what, what should be done."

In addition, in Wahaha Group, the old employees who "conquered the world" with Zong Qinghou and have adapted to the current system are still under his command. In the future, whether the young successor and the father's senior officials can coexist peacefully is also a question.

Besides sending children for further education, the first generation of entrepreneurs adopting internal cultivation methods, letting children follow them for "teaching, helping, and leading," is a relatively safe and traditional model.

Through grassroots experience, they not only understand the internal situation of the enterprise but also become very familiar with the industry, and it increases the tacit understanding between the old and new generations.

Lu Weiding and his father Lu Guanqiu
There is a legend describing the father and son Lu: Lu Weiding, who was naughty as a child, was not a well-behaved student at school. One day, old Lu saw young Lu performing "life and death speed" behind a speeding truck.

This scene not only made his heart race but also prompted him to make a decision: the father would personally cultivate his son.

From then on, Lu Weiding, who had not finished high school, was sent by his father to study in Singapore. Before leaving, his father only said one sentence: "Don't embarrass me."

There, Lu Weiding studied business management for half a year before returning. After that, Lu Guanqiu took him to and from work every day, teaching him how to handle various corporate affairs.

Lu Weiding, born in 1971, entered Wanxiang Group early, rotating from mechanic to fleet manager to other positions; in 1992, at the age of 21, he became vice president of the group under the name "Weiding."

During this period, Wanxiang Qianchao was successfully listed in 1994, and Wanxiang America was successfully established in 1994. In 1994, at the age of 23, Lu Weiding was pushed to the forefront by his father and served as president of Wanxiang Group.

The "young leader" achieved perfect growth, and old Lu expressed satisfaction with his son in every aspect.

-END-


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