Yumeijing expanded to 1,000 staff and lost its only way to sell

Tianjin Yumeijing's children's cream — a 2-yuan sachet sold in every province — was one of China's most recognised skincare products by the late 1980s. After early market success, management expanded the workforce from roughly 300 to about 1,000 employees, relocated to a new factory, and scaled up production. Sales still ran through the state's unified purchase-and-distribution system (统购统销), so the company never built its own channels.

In the early 1990s, economic reform dismantled unified distribution. Yumeijing suddenly had to find its own buyers. At the same time, individual and private businesses entered the cosmetics market and took orders. Production capacity that had looked like an asset became inventory that could not move. Internal and external debts climbed past ¥50 million. By 1994 the company's real estate and land titles were mortgaged to banks, no further credit was available, and creditors were at the door — one reportedly stabbed a knife into the new factory director's desk.

Zhang Jinkui, appointed factory head in 1994 at age 42, stopped production on more than ten slow-selling lines, refocused entirely on the children's cream, cleared enough inventory to free ¥300,000 in working capital, and built a cosmetics distribution centre from scratch. By 1997 annual sales passed ¥100 million. By 1999 every debt was repaid. The brand went on to peak at ¥1 billion in annual revenue in 2015.