Zong Qinghou, the founder of Wahaha, passed away, leaving Zong Fuli with a business empire of 50 billion

Zong Qinghou's legendary life came to an end.

Author | Zhao Pu

Editor丨Gao Yuanshan

Source | Bronco Finance

From farm worker to borrowing money to start a business, from pedaling three wheels of delivery to becoming a billionaire, the legendary life of Zong Qinghou, the founder of Wahaha Group, came to an end on February 25, 2024.

On the morning of February 25, Wahaha's official Weibo released an obituary that Comrade Zong Qinghou, founder and chairman of Wahaha Group, passed away at 10:30 on February 25, 2024 at the age of 79 due to ineffective medical treatment.

Zong Qinghou's memorial service will be held at 10 a.m. on February 28 at the Xiasha base of Hangzhou Wahaha Group Co., Ltd. (at the intersection of No. 10 Street and No. 5 Street, Baiyang Street, Qiantang District, Hangzhou).

Source: Weibo

According to the "Metropolis Express", Zong Qing was seriously ill with lung cancer before the Spring Festival in the Year of the Dragon and was admitted to Sir Run Run Shaw Hospital. Zong Qinghou, who is nearly eighty years old, was still at the helm of Wahaha Group until his death.

Looking back on Zong Qinghou's life, it can be described as ups and downs; he once appeared on the "Forbes Rich List" with assets of 10 billion US dollars, but he also pedaled three wheels of delivery and did manual labor on the farm in his early years; he was not only an outstanding private entrepreneur, but also stabbed by an unemployed middle-aged man; he once offered advice and advice to the people's livelihood as a deputy to the National People's Congress, and was also questioned about getting a green card in the United States.

Although Zong Qinghou passed away, the "Wahaha" brand created by himself has grown into a well-known national brand in the food and beverage industry, and whether the second-generation Zong Fuli can shoulder the development responsibility of the national brand "Wahaha" has also attracted attention from the industry.

"100 billionaire" Zong Qinghou's "commercial aircraft carrier group"

In terms of personal wealth, he was the richest man on the Forbes China Rich List in 2012 with a net worth of $10 billion, and ranked 18th on the Forbes Chinese Rich List with $10.3 billion in 2015. On March 23, 2023, Zong Qinghou ranked 121st on the "2023 Hurun Global Rich List" with a wealth of 100 billion yuan.

The Wahaha Group he built single-handedly has maintained a total revenue of more than 50 billion yuan for 3 consecutive years in 2021~2023, with 81 production bases and 187 subsidiaries in 29 provinces, municipalities and autonomous regions across the country, with nearly 30,000 employees, and the scale and efficiency of the enterprise have been in the leading position in the industry for 20 consecutive years, ranking among the top 500 Chinese enterprises, China's top 500 manufacturing enterprises, and China's top 500 private enterprises.

The huge personal wealth has attracted much attention from the industry for the equity inheritance under Zong Qinghou's name.

At present, the major shareholder of Wahaha Group is Hangzhou Shangcheng District Cultural and Commercial Tourism Investment Holding Group Co., Ltd., which holds 46% of the shares of Wahaha Group, Zong Qinghou holds 29.4% of the shares, and Hangzhou Wahaha Group Co., Ltd. Grassroots Trade Union Joint Committee (Employee Stock Ownership Association) holds the remaining 24.6% of the shares.

According to Tianyancha data, Zong Qinghou holds the equity of 14 companies, in addition to Wahaha Group, he also holds 60% of the equity of Zhejiang Qili Investment Co., Ltd., 60% of the equity of Hangzhou Xiaoshan Hongsheng Food Co., Ltd., 60% of the equity of Zhejiang Zhenzong Investment Co., Ltd., 100% of the equity of Hangzhou Wahaha Hongzhen Investment Co., Ltd., etc.

Source: Tianyancha

In addition, Zong Qinghou's family business is not only a group series of Wahaha, in addition to Wahaha Group, there are Hongsheng Beverage Group, Hangzhou Zongcheng Group, Zhejiang Zhenzong Group, Hangzhou Sanhe Food Group, etc., respectively, by Zong Qinghou's daughter Zong Fuli, Zong Qinghou's younger brother Zong Zehou, Zong Qinghou himself, and Zong Qinghou's younger brother Zong Duanhou as the actual controller.

According to Article 75 of the Company Law of the People's Republic of China, after the death of a natural person shareholder, his legal heirs may inherit the shareholder qualifications, unless otherwise provided in the articles of association.

In addition to personal wealth, during his tenure as a deputy to the National People's Congress, Zong Qinghou also made many suggestions for the people's livelihood, and he once proposed to exempt the individual income tax of the working class to offset the increase in the cost of living, and also proposed to ensure that young people should have one affordable housing per family to meet their basic needs.

Zong Qinghou's suggestions have been recognized by many people, and he is known as an entrepreneur who "speaks for the people".

"Dawa Controversy", unexpected attack,

Two "crises" in Zong Qinghou's life

Zong Qinghou encountered several "crises" during his lifetime, the more well-known ones are the "Dawa Dispute", the robbery of the robbery, the "Green Carmen" and other turmoil, but fortunately, they all got through the danger in the end.

Among them, the attack in 2013 was the most worrying.

According to the investigation results of the case released by the public security department in Hangzhou, Zhejiang Province, in September of that year, 49-year-old Yang saw an interview with Zong Qinghou helping migrant workers on TV because of difficulties in finding a job, so he went to Zong Qinghou's residence near Zong Qinghou to find him and hoped to arrange a job for him.

But Yang ultimately failed to do so, so he threatened to commit murder with a knife, resulting in the tendons of 4 fingers of Zong Qinghou's left hand being cut off.

If the attack was a sudden accident, then the "Dawa Dispute" is a long-lasting battle for national brands.

As early as 1996, Danone and Wahaha established a joint venture company, in which Danone's stake ratio was 51% at the peak, and the two parties signed the "Trademark Transfer Agreement" and "Trademark License Contract" to give the joint venture the right to use the Wahaha trademark, and Danone contributed 45 million US dollars and 50 million yuan for the trademark transfer.

Source: Wahaha's official Weibo

The cooperation with Wahaha is one of Danone's strategic steps to expand the global food market, and in 2000~2006, Danone also acquired the equity of a number of domestic food companies such as Robust, Meilin Zhengguang, Guangming, and Huiyuan. These companies invested by Danone are peers with Wahaha, which will undoubtedly form a competitive relationship with Wahaha, thereby limiting Wahaha's development to a certain extent.

In this context, Wahaha's non-joint venture business is very important to Zong Qinghou. In 2006, the business scale and huge profits of Wahaha's non-joint venture attracted the attention of Danone, and proposed to acquire 51% of Wahaha's non-joint venture company for 4 billion yuan, but Zong Qinghou refused.

As a result, Danone began to conduct protracted lawsuits against Wahaha at home and abroad on the grounds of trademark disputes, which also involved the debate over whether Zong Qinghou and his family became American citizens, but was finally clarified by Zong Qinghou.

The "Dawa dispute" began in 2006 and lasted for three years, and it was not until 2009 that it was reconciled. In the end, Wahaha acquired 51% of Danone's shares in the joint venture for 3 billion yuan, preserving Wahaha, a national brand.

Some outside people have commented that the "Dawa dispute" has made Wahaha wary of introducing foreign capital or listing financing, so Wahaha has not been listed so far.

In an interview with the Beijing News, Zong Qinghou said that these statements are not accurate, and that the cooperation between Wahaha and Danone is both happy and contradictory, and that in the early stage of cooperation with foreign capital, domestic enterprises really cannot achieve equality with foreign capital. Wahaha does not rule out cooperation with foreign investors in the future, but cooperation must be based on the premise of complementing each other's advantages, balancing and mutually beneficial cooperation, and promoting the progress of enterprises and the country.

At the age of 42, he borrowed money to start a business, and his ancestors were famous generals in the Song Dynasty

The reason why Zong Qinghou was able to make choices that were beneficial to national brands in the face of challenges and crises was also related to his early experience and family background.

Zong Qinghou's family was once prominent, and the most well-known historical figure of his ancestors was the famous general Zong Ze of the Song Dynasty, and the famous national hero Yue Fei was Zong Ze's subordinate. Zong Qinghou's grandfather served as finance minister under Zhang Zuolin, and his father worked as a clerk in the Kuomintang government.

But after 1949, Zong Qinghou's father was unemployed, and the whole family lived in poverty, and in his early years, Zong Qinghou went to the mountains and went to the countryside, and exercised in the countryside for 15 years, during which he engaged in a variety of manual labor on farms, tea farms, salt farms, etc.

In April 1987, Zong Qinghou contracted the distribution department of the school-run enterprise in Shangcheng District, Hangzhou, and started by selling soft drinks, popsicles and stationery paper to earn a penny. In July of the same year, Zong Qinghou used pollen sales and a bank loan of 50,000 yuan as the original capital to establish Hangzhou Baoling Children's Nutrition Food Factory, whose main business was to process pollen, thus starting Wahaha's entrepreneurial process.

At this time, Zong Qinghou, who started the business, was 42 years old, and today, this age means that many ordinary workers are facing an unemployment crisis. But Zong Qinghou was not intimidated by the "mid-life crisis", but started a legendary life by starting his own business.

Source: Official WeChat

In 1988, under the guidance of Professor Zhu Shoumin of the Department of Nutrition of Zhejiang Medical University, Zong Qinghou's company developed the first product - "Wahaha Children's Nutrition Solution", and with the advertising slogan "Drink Wahaha, eat is fragrant" quickly became popular and became a hot-selling beverage in the country. In 1989, it was changed from "Hangzhou Baoling Children's Nutrition Food Factory" to "Hangzhou Wahaha Nutrition Food Factory", and in 1990, Wahaha's sales revenue exceeded 100 million yuan, and the profit exceeded 20 million yuan, and its performance and scale increased greatly.

In 1994, Wahaha merged three flooded enterprises in Fuling to form Wahaha Fuling Co., Ltd. As of 2016, Fuling Company has achieved a total sales revenue of more than 9 billion yuan and realized profits and taxes of more than 1.7 billion yuan.

According to the official website, Wahaha has established more than 180 branches in 29 provinces, municipalities and autonomous regions across the country.

The challenge of the "second generation" Zong Fuli

Now, with the death of Zong Qinghou, his daughter Zong Fuli is not only sad, but more importantly, she leads Wahaha Group to continue to develop steadily. At present, Zong Fuli is also the vice chairman and general manager of Wahaha and the president of Hongsheng Beverage Group, and it is Zong Fuli's responsibility and challenge to inherit and develop the family business left by her father.

After the "Dawa dispute", Wahaha Group is currently relatively stable in terms of equity relations and corporate revenue, which is undoubtedly the biggest guarantee left by Zong Qinghou to Zong Fuli, but Zong Fuli is also facing strong competitive pressure from the market.

In terms of competitors, Nongfu Spring has relied on years of operation to have more brand influence in drinking water products, tea medical treatment, fruit juice drinks, etc., and Robust, a time-honored brand in the field of AD calcium milk, has also officially "resurrected" AD calcium milk products a few days ago, which will also have an impact on the market share of Wahaha AD calcium milk......

For Zong Fuli, Wahaha Group, with a history of 37 years, is facing two strategic issues: innovation and management.

Recently, Wahaha has also made frequent moves in order to play a good marketing card, and in the Spring Festival Gala of CCTV in the Year of the Dragon, Wahaha quickly got out of the circle with the "AD calcium milk sister" behind Liu Qian; Subsequently, he appeared as a sponsor on the night of the Lantern Festival; Not long ago, Zong Fuli distributed 600 million yuan of red envelopes to employees on the day of the small Chinese New Year's Eve on February 2, which also attracted attention.....

Source: Wahaha's official Weibo

Zong Fuli once said frankly in an interview with other media that the food and beverage market where Wahaha is located is a market with ever-changing consumer demand, and in terms of innovative products, "health" and "deliciousness" are the mainstream underlying logic of the beverage industry.

At present, Wahaha's six major food businesses cover water series, porridge series, tea drinks, milk tea drinks, milk drinks, and carbonated drinks, among which Wahaha AD Calcium Milk, Nutrition Express, Longan Lotus Seed Eight Treasure Porridge, and Wahaha Pure Water are well-known national brands, while many new brands such as Longjing Green Tea, C-Drive Lemon Juice Carbonated Drink, Brown Sugar Milk Tea, and Crystal Diamond Water are innovative brands in recent years.

Source: Canned Gallery

Zong Fuli also said that the company is focusing on the research and development and application of new technologies and processes in beverage manufacturing, and promoting new management changes. Among them, Wahaha Group has initially realized the transformation and upgrading from automation to intelligence, and the Hangzhou base of "Hongsheng Super Chain Intelligent Manufacturing" built by Hongsheng Beverage Group has been put into operation in 2022.

However, the market faced by Zong Fuli is completely different from when Zong Qinghou started his business, and now the food and beverage industry is "blooming", and the product competitiveness of large beverage companies is also becoming more and more sophisticated.

For Wahaha Group, national brands such as Wahaha AD calcium milk, Wahaha longan lotus seed eight-treasure porridge and purified water still have a certain competitiveness, but the influence of new products still needs to be improved, and these problems still need to be broken through by Zong Fuli to come up with more ways to impress the market.

In 2024, Wahaha put forward the slogan "In 2024, it will be officially diagnosed with 'Wahaha physique'", and launched a variety of new drinks, including 4 kinds of Wahaha sugar-free pure tea, coconut milk drink, milk drink and related fruit juice medical treatment, but it remains to be seen how the market will react.

After the death of Zong Qinghou, how Wahaha will develop under the leadership of Zong Fuli, the "second-generation helmsman", and how the national brand will rejuvenate itself, let us wait and see.

What do you think of the competitiveness of Wahaha's products? Welcome to leave a message in the comment area to discuss!