In the long winter of consumption, Hongshan wants to snap its fingers and find resonance.

By Muxin Xu

Edited by Jing Liu

The Meaning of a Spark

After meeting with a founder, Hongshan partner Ruodi Hu set an alarm on her phone. The moment his product launched, she'd be first in line to buy it. After testing it, she'd text him with a breakdown of what worked and what didn't.

This buying spree lasted half a year — long enough to become a ritual between Hu and the founder. Then one day, a new product dropped and no order came through. The founder, Elvis, texted her first: Was something wrong with this release? What won him over, in his view, was seeing this investor as a genuine user. He accepted Hongshan's Series A offer without hesitation.

For many consumer companies, fundraising isn't a necessity. Especially not early on. So for Hu, the essential skill was finding founders and getting her foot in the door. In 2011, fresh to Hongshan and working the cold-call desk, she dialed countless numbers for companies on their radar. Her first connection with ZTO Express came through a "400" hotline.

Over the past 12 years, Hu has led or co-led Hongshan's investments in Heytea, Guming, Shiyuedaotian, To Summer, Saturnbird, and Cheese Doctor, among other star projects. Her Series A bet on RELX rode a rocket ship — public in three years, one of the rare consumer deals to return hundreds of millions in cash. But the reality she faces now is this: after the frenzied peak of 2021, consumer investing froze over. Behind the collapsing deal numbers, many firms simply disbanded their consumer teams.

Perhaps because she's lived through previous winters and stretches when founders were scarce, Hu is strikingly calm about today's chill. Great consumer companies are often born in the cold. Hongshan's consumer team has stayed the course for over fifteen years, maintaining a steady team of roughly a dozen investors.

Recently, she and fellow consumer partner Kai Su launched Sparkle Consumer Innovation Hub.

Sparkle is an early-stage consumer founder community, designed to identify high-potential entrepreneurs in the broader consumer space and help them turn distinctive, innovative ideas into scalable commercial opportunities. Three months ago, Hongshan announced the full deployment of its $480 million seed fund strategy. At that point, "seed plus venture" deals already accounted for 80% of the firm's investment count. Sparkle pushes further, targeting the "-1" stage — when there's nothing but an idea.

Hu told Anyong Waves: "The current environment demands that investors create more value, provide more hands-on support and post-investment services. Plus, market supply and demand have shifted dramatically. Fewer people are willing to start consumer companies now. Sparkle is about gathering those who still have the passion." She added: "Maybe the next Pop Mart emerges from this. It's a numbers game."

This is the other reason for Sparkle — and a fitting summary of Hongshan's initiative and ambition: If the era of rising tides and giant fish has passed, and you can't simply fish out the next Pop Mart, then incubate one yourself.

Aiming Dead Center

On the challenges of consumer investing in a world of limited growth, Hu sums it up in one line: "Minimize error rates, and steadily, consistently build unique, multi-billion-dollar companies while enabling industry consolidation."

Minimizing errors at the "-1" stage mirrors how Hongshan has always played early-stage consumer. Early-stage firms have their own styles — some bet purely on people, others spread chips wide like scattered pepper. But in Hu's view, Hongshan's early consumer strategy is nothing like the latter. It's "precision investing based on sector-wide conviction, identifying the single S-tier founder and going heavy." When e-cigarettes were white-hot, Hongshan only backed RELX. In cheese, they put their chips on Cheese Doctor.

Hu was the first investor Cheese Doctor founder Jason Chen ever met. Hongshan came in with seed capital, followed through four rounds, and led a 150 million yuan round that put the company firmly on the map. Challenger Capital, Xingnahe Capital, Wanwu Capital, and Kathy Xu's Capital Today all piled in afterward. Chen, who had never raised before, only realized by the third round what Hongshan money meant for becoming a category winner. "By round three, we hadn't even gone out to meet people. Our existing shareholders had already taken the full allocation," he said.

Asking the questions that prove you "get it" — that's the key to landing concentrated bets. Chen recalls his first meeting with Hu. After running through his background, she suddenly asked: "Jason, can you think of examples where something started in one category but cut through all of them?"

Chen froze. He'd never quite thought about it that way. But chocolate, mango, durian — they all had that penetrative power, forming "category plus." And "cheese plus" was precisely what made Cheese Doctor worth backing.

This is why founders need Hu too. The best consumer businesses tend to have healthy margins. So what founders often need isn't money per se. "When good consumer companies take investment, most of the time they're looking for a business partner to break through bottlenecks and scale bigger," Hu told Anyong Waves. The ability to ask those pivotal questions comes from Hongshan's sector research support and its vast network of founder relationships. Because Hu works across early-stage to late-stage and even public-market consumer investing, she sees how other category leaders faced similar puzzles at comparable stages — and what answers worked. Founders feel that resonance.

Chen nearly fell into the classic founder trap of "bigger and broader." But Hu's consistent refrain was to focus Cheese Doctor on the mother-and-baby demographic first, dominate the premium professional mindshare, then expand categories and audiences.

Before the precision-heavybet methodology, though, the core of early-stage investing remains finding someone worth betting on. Hu told Anyong Waves that in every founder meeting, she always asks for a detailed walkthrough of their life story — to see what choices they tend to make at critical junctures. "This is the most direct way to read someone's values and judgment. Most people keep making the same mistakes. Someone who speculated before keeps speculating. Someone who never cared about details keeps slipping. Very few people truly learn."

The founders of Cheese Doctor and To Summer share similar profiles — both were executives in related fields before starting up. This is one archetype Hu and Hongshan actively seek. With Sparkle as its hub, Hongshan wants not just these executive-background founders, but also product-manager types with deep consumer insight, and innovation-driven technologists who bring their own patents.

Consumer Investing Is a Sport

This is an era where industry credentials matter more than pure capital. You can see it in the backgrounds of Hongshan's newer partners. Kai Su, who co-launched Sparkle, spent years in fast fashion and commercial real estate before joining. Yu Zhang, who came aboard in 2021, was previously editor-in-chief of VOGUE China.

For Chen, the ideal financing balance is between financial and strategic investors. Cheese Doctor's angel round included Challenger Capital — founded by Binsen Tang, creator of Genki Forest, which itself counts Hongshan as a key outside investor.

Through Hu's introduction, Chen met Tang and took Challenger's money. What attracted Chen more was the operational synergy and the chance for peer-level exchange with a founder of Tang's caliber.

A premium CEO network is just the most visible piece of Hongshan's post-investment value.

From its founding, Hongshan China designated consumer as one of three core sectors, building out a formidable value-creation team. Each member has a specialty — helping portfolio companies with store location strategy, digital transformation, even HR. Hu told Anyong Waves that Hongshan helps its companies hire over 100 CXOs annually, not through headhunters or the open market, but through an 18-year-old CXO database built from its own network.

In Elvis's view, Hongshan's sprawling consumer portfolio enables efficient cross-brand collaboration. And when international conglomerates come calling, the legal and financial complexity is immense. Hongshan's deep experience in cross-border M&A and investment often gives portfolio companies incisive advice and pothole warnings. "To some extent, they play an extremely capable international FA role," Elvis said.

And the elephant's unhurried composure may be the most invisible yet vital part of this package. Elvis, who deeply loathes ratchet clauses, sees Hongshan as patient — no ratchets, no pressure to raise the next round. "This probably comes from Hongshan's deep reserves. They're not desperate for any single deal to keep fundraising. And that actually prevents founders from losing their pace."

So back to the original question: Why is Hongshan doubling down on early-stage consumer in the depths of winter? Because the elephant has crossed cycles and understands tides rise and fall. With China's massive population base, Hu believes opportunities persist across stock markets, latent growth, and consolidation — future hundred-billion-yuan consumer companies will emerge. Food and beverage, franchising, sports, pets, cross-border expansion — they're all in play.

The day before our interview, Hu had cycled 100 kilometers on Beijing's outskirts, arms sunburned red. Cycling is her favorite sport. Shoes locked to the pedals, you can't stop. You just keep pedaling at steady rhythm, into flow state, toward the next 100 kilometers. In Hu's eyes, this sport's monotony resembles consumer investing. As Su put it: "Early-stage consumer demands high alertness, but also the patience to endure solitude."

Entrepreneurship is a completely different extreme sport. There's a saying that founders jump off a cliff and assemble the plane on the way down. The relationship between consumer investors and founders mirrors these two distinct sports. The founder grips the steering wheel as driver. The investor sits in the passenger seat — hard to say if they're truly in the game. They're not the driver, yet they're absolutely in that speeding car.

Image source: Visual China

Layout: Yunxiao Guo