Tao Huabi's Lao Gan Ma chilli sauce is a beloved household staple but will her Chinese success story continue? – ABC News

Tao Huabi's Lao Gan Ma chilli sauce is a beloved household staple but will her Chinese success story continue?
For the latest flood and weather warnings, search on ABC Emergency
Check the score for the Boxing Day Test against South Africa
When Jonathon Read first encountered China's hottest woman in an Asian supermarket in Melbourne nine years ago, he didn't expect to fall for her.
He had heard about Lao Gan Ma — which means "old godmother" — from his Chinese colleague, who he turned to for advice on better ways to eat dumplings.
She insisted he try a chilli sauce.
"I'm not sure if I can handle something so spicy, I'm not so good at spicy [food]," he told her.
However, his colleague was insistent, even showing him a photo of the red-lid glass bottle with the sober face of an elderly Chinese woman on the label.
And like millions of other fans of China's household chilli sauce, he was hooked.
Since its founding in 1996, the brand has launched more than 20 chilli sauce products, dominating one-fifth of the chilli sauce market in China, with exports to more than 80 countries.
And the success of this chilli empire wouldn't have been possible without one woman.
"When you Google her, you find out that she's one of the most-popular women in China. She's like company for lonely men in their lonely nights," says Benjamin Law, Australian writer and loyal Lao Gan Ma fan.
"Everyone talks about the American success story, it very much sounds like she's the embodiment of the Chinese success story."
Back in 1989, Lao Gan Ma's founder, Tao Huabi, now 75, was an illiterate widow raising two sons in a rural village in Guizhou Province, one of the poorest regions in China's south-west.
The province is also the origin of Maotai, a luxurious brand of the grain-based Chinese liquor, baiju.
To make a living, Tao ran a food truck and sold rice tofu and cold noodles. She would offer home-made chilli crisps for dipping.
Soon she noticed people preferred her chilli sauces over the tofu and noodles. And so, in 1996, the Lao Gan Ma brand was born.
It was an adventurous and risky decision for Tao to launch her own businesses, according to Dali Yang, professor of China's political economy at University of Chicago.
At the time, China was in the midst of widespread economic reform, privatising state-owned enterprises to embrace the market economy.
Professor Yang said the Asian Financial Crisis that followed in 1997 forced many companies in eastern China to shut down.
Despite the challenges, Tao took her opportunity.
"One of the most-striking things about her business is that she was able to control and manage the sourcing of the product," Professor Yang said.
"The company gained a significant reputation, because she priced the product very inexpensively. It's very accessible to the average consumer, in fact, to the low-income people as well."
Before a price rise in 2022, a bottle of Tao's sauce was less than $2 in China. The sauce is widely popular among people short on cooking time.
Gerald Zhang-Schmidt is a cultural anthropologist who researches contemporary use of chilli in south-west China.
He says it's common for Chinese university students to keep a rice cooker in their dormitory, so they can make quick meals.
If all they have is rice or instant noodles, they add a splash of Lao Gan Ma.
More than two decades later, Tao has a reported net worth of $1.9 billion, making her one of the richest women in China.
She has been spotted travelling in a million-dollar Rolls Royce and a Bentley worth the equivalent of a few hundred thousand bottles of her chilli sauce.
Tao's chilli business also helped lift her hometown out of poverty.
Her company reportedly signed contracts with more than 180,000 local farmers to acquire chilli, and hired 5,000 staff from the rural area to work at factories and production facilities.
China's state media and government has long praised Lao Gan Ma for its contribution to the local economy as part of the country's goal of eradicating extreme poverty.
In 2015, Beijing set a goal to eradicate extreme poverty by 2020. They set a benchmark of a minimum $850 per person per year, with adequate services for basic medical care, school education and housing within the village.
In November 2020, Guizhou province announced all of its villages and counties had met that goal, allowing China's president, Xi Jinping, to declare China had successfully lifted 800 million people out of poverty.
Tao — who had retired in 2014 and handed the company over to her two sons — was praised by the Chinese Communist Party as a symbol of the Chinese dream.
As one of the country's few female entrepreneurs, Tao was given an outstanding achievement award in 2018, along with Jack Ma, founder of tech giant Alibaba.
With the growth of Chinese international students and migrants since the 1980s, Lao Gan Ma also reached the shelves of Australian grocery stores and supermarkets.
For Law — who co-hosts ABC RN's pop culture show Stop Everything! — the sauce was a staple accompaniment for dumplings when he was growing up.
"You can't walk into any Asian grocery store without seeing rows and rows and rows of condiments with her face on it," he says.
Law isn't surprised by the popularity of Lao Gan Ma in Australia.
"I think one of the things Australians have in common is that we're adventurous eaters," he says.
"I think we've come a long way since the 1970s, and prior, when people would turn up their noses at foreign food.
"I think nowadays, it's more embarrassing to have a limited palate, or to say, 'Oh, I've never eaten that before'."
Law says that, in recent years, Tao herself has become something of a pop culture icon.
Her face — that of a stern grandma — has adorned T-shirts, phone cases and other memorabilia and spawned an endless buffet of memes and fan pages dedicated to Tao and her sauce.
She even made an appearance at New York Fashion Week, where her face was printed on a bright red hoodie worn by models at an event sponsored by Alibaba, which owns the largest e-commerce platform in China.
Tao has often been held up as an example of the Chinese dream, a woman who built her business through hard work, and gave back to society by lifting her hometown out of poverty.
She also insisted on not publicly listing her company, in sharp contrast to other private entrepreneurs such as that of Jack Ma, who pursued success on the stock market in China and the United States.
The decision shielded her from being targeted by the state when Beijing launched aggressive crackdowns on the ultra-rich and private entrepreneurs under Xi's call for common prosperity, said Professor Yang.
Alibaba's co-founder Jack Ma recently made his first public appearance since October via a video meeting. However, there has been no explanation given for his whereabouts in the past three months.
Yet, despite support from the CCP, there is a cloud still hovering over Tao's chilli empire.
In 2018, Lao Gan Ma's revenue dropped dramatically when her youngest son, who inherited the business, reportedly switched to a different kind of chilli to save costs, which consequently led to a decline in product quality.
The crisis, as well as a failed business venture by her eldest son, forced Tao to pause her retirement and return to management and marketing campaigns in an effort to repair the damage.
Lao Gan Ma's revenue bounced back in the next three years, but it didn't last long.
Since 2020, the chilli sauce market has exploded, with more than 4,500 companies vying for space.
While the pandemic and lockdown measures since 2020 put a serious dint in the overall Chinese economy, this paved the way for a dramatic growth of the chilli sauce market, due to the increasing demand of takeaway food.
The market reached a new record of $9.2 billion in revenue in 2021, which industry experts predict will continue to expand in the next decade.
An industry report shows the younger generation has become the main consumer group for chilli sauce, and they tend to buy their sauces through e-commerce platforms and livestream sales.
Austin Li was beloved by young shoppers and the Chinese Communist Party. But when he tried to sell an ice cream cake to millions of his followers, everything went wrong. 
This fuelled a rise in high-end chilli sauce brands, reliant on internet-based sales, in contrast to Lao Gan Ma's predominantly traditional wholesales.
Tao's empire has not shared the same success as newer players.
In October this year, Chinese media reported Lao Gan Ma's revenue had declined again in 2021, this time by 22.25 per cent.
Although Lao Gan Ma's competitors are spreading their chilli success across the seas, Jonathon Read remains a loyal fan of the original.
For him, Lao Gan Ma was the beginning of his journey into trying spicy cuisines.
"I was not a huge fan of spicy food. It's not until my adult life that I really started to enjoy spicy things," he says.
"I've been eating more and more and I just became exposed to it, and realised that it's enjoyable and it increased the flavour of the food."
We acknowledge Aboriginal and Torres Strait Islander peoples as the First Australians and Traditional Custodians of the lands where we live, learn, and work.
This service may include material from Agence France-Presse (AFP), APTN, Reuters, AAP, CNN and the BBC World Service which is copyright and cannot be reproduced.
AEST = Australian Eastern Standard Time which is 10 hours ahead of GMT (Greenwich Mean Time)


Leave a Comment