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Zong Qinghou, billionaire founder of Chinese drinks giant Wahaha Group, dies at 79

In Business
February 25, 2024

Zong Qinghou, the founder of China’s drinks giant Hangzhou Wahaha Group that bought out its French partner Danone to dominate the local market, has died, according to a company statement. He was 79.

The billionaire passed away at 10.30am local time on February 25, the company said in a statement on its official Weibo social-media account. A memorial service will be held on February 28 in Xiasha, Hangzhou, its home base in eastern Zhejiang province, it added.

As the chairman of one of China’s largest beverage makers, Zong was ranked the nation’s wealthiest businessman in 2010 and 2012 by the Hurun Research Institute’s China Rich List. With a fortune of US$13.1 billion, he ranked 31st on the list last year.

Born to a poor family in Hangzhou in October 1945, Zong became one of the “sent-down youth” in the 1960s during the Cultural Revolution, which saw him spend 15 years working in the countryside. His age is stated as 79 in accordance with Chinese tradition, which adds a year to the deceased.

Zong delivered a keynote speech at the China Brand 2020 Forum in Beijing in December 2020. Photo: Costfoto/Future Publishing via Getty Images

Zong returned to the provincial capital in 1978 to work as a salesman. In 1987, together with two retired teachers, Zong took over a grocer at a local school and started as a drinks and ice cream distributor – his first step in creating a leading beverage firm. He founded and headed Hangzhou Wahaha Nutritional Foods Factory in 1989, which became Hangzhou Wahaha Group two years later when it acquired an insolvent local canned food factory.

In 1995, seeing the market potential for bottled water, Zong launched the pure water brand of Wahaha, which became immensely popular with Chinese consumers. The next year, French multinational Danone injected about US$70 million into five joint ventures with Wahaha, eventually rising to 39.
Zong’s Wahaha Group bought out its French partner Danone’s stake in local joint ventures in 2009 after a two-year legal tussle. Photo: Agence France-Presse

That cooperation turned sour in 2007 when Zong rejected a plan by Danone to buy out Wahaha’s remaining assets in some of the joint ventures, accusing the French firm of orchestrating a hostile takeover. Danone accused Wahaha of secretly operating parallel companies that mirrored the products offered by their joint ventures.

The high-profile dispute was settled in 2009 when Danone sold its interest in the ventures to Wahaha for an undisclosed sum, estimated by some analysts at the time to be worth about US$500 million.

In September 2013, Zong captured media attention when he was attacked by a lone knife-wielding assailant. The man allegedly targeted Zong after being rejected for a job opportunity.

Succession planning has been a key challenge for Wahaha Group. In 2021, Zong Qinghou’s only child, Zong Fuli, was appointed as vice-chairman and general manager, paving the way for her to eventually assume control of the group.

With an international education and a deep understanding of both Western and Chinese food and beverage markets, Zong Fuli has been focusing on rejuvenating the brand and improving sales channels to attract young customers.

Wahaha Group has faced tough times over the years. Intensifying competition and evolving sales models soon pressured its revenue. Nongfu Spring, Wahaha’s bottled-water rival run by China’s wealthiest tycoon Zhong Shanshan with a US$62 billion net worth, gained more market share through innovative advertising strategies.

Amid challenges in China’s economy related to a slow recovery from years of Covid-related lockdowns, travel restrictions and industry-wide crackdowns from Beijing, Zong Qinghou last year expressed confidence in the economy’s potential with a letter publicly supporting the central government’s plan to strengthen support for private companies.

Zong was a member of the Communist Party of China, and a delegate to the 10th, 11th and 12th National People’s Congress, as well as a delegate to the 12th, 13th and 14th congresses of the Communist Party of China in Zhejiang province, according to the company statement.

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