Zong Qinghou
MUHAMMAD FADLI FOR FORBES ASIA
Zong Qinghou, the founder and chairman of Chinese beverage giant Hangzhou Wahaha Group, died Sunday at the age of 79, according to his company.
Wahaha’s statement said Zong died from an unspecified illness. The company said as recently as Thursday that the tycoon was receiving hospital treatment and was in a stable condition as rumors swirled around his health.
Zong leaves behind a sprawling food and beverage giant with billions of dollars in annual sales. The mogul, who never finished high school and was instead sent to work in the countryside during China’s tumultuous Cultural Revolution period, later seized opportunities brought about by the country’s economic reforms.
The entrepreneur didn’t venture into business until 1987, when he was already in his 40s. Zong started by selling snacks in a local school canteen in his native Hangzhou, and expanded from there. Over the years the mogul launched hit products including bottled water and nutritional drinks for children—with the company’s name, Wahaha, which meant to mimic the sound of a child’s laugh. After acquiring a state-owned factory to boost production, Zong also built a network of thousands of distributors that helped to sell across the country.
He amassed a wealth of $8 billion in 2010, the year when he was first crowned the richest person in China. The year before, Zong settled a partnership dispute with France’s food and beverage giant Danone. After initial success, the partnership turned sour in 2007, when Danone publicly accused its Chinese partner of using distributors outside of those selected by their joint ventures to sell Wahaha-branded products. Later, with support from both the Chinese and French governments, Zong agreed to buy Danone’s 51% stake in their various ventures for an undisclosed price (one media put it at about $380 million).
Zong returned to the top spot on Forbes’ China wealth rankings in 2012 with a net worth of $10 billion. But it hasn’t been smooth sailing since. Competitors such as billionaire Zhong Shanshan’s Nongfu Spring started to chip away Wahaha’s dominant position with newer marketing campaigns and more innovative products; Nongfu Spring’s Zhong is now China’s richest person. What’s more, Zong was late to China’s internet boom and was initially unwilling to experiment with online sales. In 2014, he famously said that e-commerce was disrupting China’s “real economy.” Although the stance later shifted as Wahaha started to do more digital marketing, the mogul still appeared to view traditional brick-and-mortar stores more favorably.
“I don’t think traditional sales channels will change much,” Zong told Forbes Asia in an interview in 2019 on the sidelines of the Forbes Global CEO conference that year in Singapore. “People need to enjoy life, and to enjoy life, they need to go outside instead of staying at home hooked on their smartphones.”
Last year, Zong was No. 53 on China’s 100 Richest list with a net worth of $5.9 billion. Privately held Wahaha, which never got listed despite a rumored $1 billion initial public offering in 2020, generated 51.2 billion yuan ($7.1 billion) in revenues in 2022, according to the All-China Federation of Industry and Commerce, a business organization that compiles data on the country’s private enterprises. That figure is down about one third from a peak of $11 billion achieved in 2013. Now, it is perhaps up to his daughter Kelly Zong, who is the company’s CEO and vice chairman, to revive momentum.
Kelly, who dabbled in entrepreneurship by launching juice brand KellyOne in 2016, took on a greater role in recent years. Under her leadership, Wahaha has experimented more with social media campaigns and replaced its long-running brand ambassador singer-songwriter Wang Leehom. The company is also seen as catering to the palate of the younger generation by launching more tea-based and sugar free drinks.
The senior Zong told Forbes Asia in the 2019 interview that he will hand over the reins to Kelly if she wants them. If not, he will groom professional management. “A lot of young people have studied abroad and have a broader vision, and they may not want to manage their parent’s business,” he says. “My daughter is overseeing some factories. Does she want to take on more? That I don’t know.” Two years later, in 2021, Zong promoted Kelly to CEO and vice chairman of Wahaha.
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