On July 18, a resignation letter purportedly from Zong Fuli, vice chairman of Wahaha Group, detonated a hot search. In February this year, at Zong Qinghou's memorial service, Zong Fuli once said that she would take over the "baton" handed by her father, and the drama of "women inheriting her father's business" is still vivid, no one expected that in less than half a year, Zong Fuli's era in charge of Wahaha has come to an end.
In the face of whether the resignation letter on the Internet is true, all media have not heard reliable information from Wahaha officials. According to the resignation letter, Zong said that "some shareholders" questioned the reasonableness of her operation of Wahaha, resulting in the inability to continue to perform management duties. In this regard, some media said that some former executives of Wahaha have expressed their stance that the news spread on the Internet is true. There are also Wahaha dealers who told the media that in the past month, Zong Fuli has been playing games with shareholders and senior management, and finally resigned gloomily because of disagreements.
Wahaha's high-level changes overnight, is there a problem with Zong Fuli's ability, or is there really something else hidden? What are the controversies over Wahaha's equity?
The equity has not changed, and the personnel is changing
After the death of Zong Qinghou, her daughter Zong Fuli was regarded as the natural successor of the Wahaha Group. However, Wahaha's shareholding structure makes it all seem not so simple.
Wahaha general manager Zong Fuli
Wahaha Group currently has three major shareholders. Hangzhou Shangcheng Cultural and Commercial Tourism Group is actually the largest shareholder, holding 46% of the shares; Zong Qinghou is the second largest shareholder, holding 29.4% of the shares; Wahaha Group's Joint Committee of Grassroots Trade Unions (Employee Stock Ownership Association) is the third largest shareholder, holding 24.6% of the shares. Therefore, Wahaha's system is not a family business as the outside world thinks, and the grassroots trade unions of Hangzhou Shangcheng Cultural Tourism and Wahaha obviously have a lot of say. There is even an online post pointing out that the relevant departments have received a report letter that Zong Fuli wants to re-divide the equity and is suspected of embezzling state-owned assets.
According to the lawyer, if there is no prohibition in the articles of association of Wahaha Group, according to the relevant inheritance law, Zong Fuli can indeed inherit the corresponding equity after Zong Qinghou's death, but the position of chairman of Wahaha Group cannot be directly inherited. Therefore, the new chairman of Wahaha needs to be elected by the shareholders' meeting or appointed by the board of directors, but so far this position has not been really re-elected, so even though Zong Qinghou has passed away for 5 months, Zong Fuli's position as the head of Wahaha is still in name only. Zong Fuli's position is also the vice chairman and general manager of Wahaha Group, which she has served since 2021.
Some media found that it has been nearly half a year since Zong Qinghou's death, and the shareholders of Wahaha Group have not changed, and Zong Fuli, who has legally inherited the equity, has not yet appeared in the list of shareholders.
Wahaha factory Source: The Paper
did not take over the position of chairman of Zong Qinghou, nor did he change his equity. It can be guessed that Zong Fuli has been trying to control Wahaha Group for the past 5 months, but in the end it ended in failure.
From the outside world, it seems that some clues can also be seen from the personnel changes after Zong Qinghou's death.
According to public information, Zong Fuli's position in Wahaha Group's companies has changed very frequently, and she has successively taken over the position of legal representative of Hangzhou Wahaha E-commerce Co., Ltd., Zhejiang Qili Investment Co., Ltd. and other companies.
Just after Zong Fuli resigned as vice chairman of Wahaha, the management of Hongsheng Beverage Group, which Zong Fuli actually controlled, changed, and the two directors, Shi Lijuan and Shi Youzhen, withdrew, of which Shi Youzhen is the wife of Zong Qinghou, the founder of Wahaha, and also Zong Fuli's mother. Zong Fuli's position was changed from chairman to executive director.
A former employee of Wahaha told the media that Wahaha's management structure is quite special, and when Zong Qinghou was in office, one person served as the chairman. He has a number of business divisions, and the head of the division reports directly to Zong Qinghou himself. Zong Qinghou controlled the huge joint sales body through middle-level cadres, and this structure was characterized by the fact that the middle-level was not strong, and the local dealers were very powerful.
After Zong Fuli took over, the middle and senior management of Wahaha Group also experienced frequent transfers. Some former Wahaha employees said that basically, the original management was dismissed, and Zong Fuli was surrounded by new faces.
Divergence or lack of capacity?
The listing disagreement is currently the most common reason for Zong Fuli's resignation. After all, Zong Qinghou insisted many times that Wahaha would not be listed or financed, but Zong Fuli's views have always been different from those of her father, and she once publicly stated that Wahaha's listing is a very normal move. Zong Fuli also said that the great development of any enterprise is operated through capital means.
However, the primary problem facing Wahaha's listing is the equity issue, and some Wahaha employees broke the news that the current contradiction between Zong Fuli and shareholders is that she wants to promote the listing, which affects employee stock ownership and related interests.
According to public information, the number of shareholders holding shares after Wahaha implemented the employee stock ownership plan has exceeded 15,000, and according to the requirements of the China Securities Regulatory Commission, when a company to be listed applies for listing, the employee stock ownership plan needs to be penetrated by shareholders, and the final number of shareholders shall not exceed 200 after penetration. If there is a transaction of equity, the difference in price will obviously cause a conflict of interest for many people. This may also be the core problem of Zong Fuli's disgraceful dismissal this time.
SOURCE: KELLYONE'S OFFICIAL WEIBO
Another question about Zong Fuli comes from her management ability. In 2017, he acquired China Candy, but was defrauded of 500 million by the other party. Zong Fuli burned money to start a beverage brand, KellyOne, and the product positioning is very young, but the current sales volume has not exceeded that of any Wahaha's main product. Whether Zong Fuli can really take on the position of the head of Wahaha has actually been controversial.
Some Wahaha elders once said that Zong Fuli has her own ideas and methods. After serving as the head of the brand public relations department of Wahaha Group in 2018, he was responsible for the packaging and brand promotion of Wahaha products.
When Zong Qinghou was there, he always said that he and his daughter's ideas were different, and Zong Fuli also said that she did not agree with her father's hands-on management style.
In addition to the listing, the father and daughter also have completely different approaches to the company's management philosophy. The whole network knows that Zong Qinghou has the habit of not taking the initiative to dismiss old employees, but Zong Fuli is different. "Employees who really don't meet the requirements of this position will be fired," she said. Some people within Wahaha and the media frankly said that compared with her father's way of doing things that emphasized flexible management, Zong Fuli, who returned from United States, is a person who pays attention to managing the company with rules and regulations.
Where is Wahaha going?
Zong Fuli leaves, where will Wahaha go in the future. Some dealer salesmen told the media that the sales of Wahaha drinking water have increased this year, and they believe that as long as the Wahaha brand is still there, the stability of the business can be guaranteed.
However, in the era of the Internet economy, even with Zong Fuli's drastic reforms, Wahaha's brand no longer looks young. In recent years, because there are too many new products, but new large items have not yet appeared. Zong Fuli's product innovation was complained about as "shooting birds indiscriminately".
In 2001, it was surpassed by Nongfu Spring in the bottled water market. In the years that followed, Wahaha's sales began to rise and fall. It was not until 2021 that Wahaha returned to the 50 billion yuan club.
Unlike Nongfu Spring, Wahaha's success comes from its huge dealer system and strong distribution network. These resources, which were concentrated in Zong Qinghou alone, did not really fall into the hands of Zong Fuli behind him, but they will still coexist with the Wahaha brand. A senior practitioner in the beverage industry told the media that as far as he knows, Wahaha's channel ends more by husband and wife stores, and the distribution of such stores is more in lower-tier cities and rural areas, with low demand for product iteration and relatively stable dynamic sales. Wahaha Group's volume is too large, and it is eaten by e-commerce, and the threat is not very great in the short term.
According to the data, in China's packaged water industry, Nongfu Spring, Cestbon and Jingtian ranked the top three, and Wahaha ranked fourth. It's just that compared with the former, Wahaha's advantage lies in the stable sinking market.
At the helm of a 10,000-person group, Zong Fuli is facing not only complex personnel relations and equity entanglements, but also a white-hot market environment. Facts have proved that it is difficult for her to use her identity as the head of Wahaha to fulfill her oath of "taking over" at Zong Qinghou's memorial service. For Wahaha, instead of continuing to entangle over the equity issue, it is better to put aside the differences as soon as possible and immediately plunge into the fierce bottled water war. Just before Zong Fuli's resignation, Nongfu Spring launched a new green bottle "pure water", and the price has also hit new lows, with a box of 12 bottles as low as 9.9 yuan and 8.9 yuan.
Zong Qing died less than half a year later, Zong Fuli left class, and the disturbance of Wahaha made people in the industry deeply embarrassed. A former employee of Wahaha Group, who claimed to have followed Zong Qinghou all the year round, posted on social platforms: "Today, the whole network is circulating resignation letters, mixed tastes, and a sigh...... With such a hot day, isn't it time to go all out for business? What the hell are you thinking? What the hell are you doing? ”
For Wahaha now, instead of spending time fighting over who is the boss, it is better to think about how to return to the top of the beverage industry.
Resources
1, Zong Fuli resigned from Wahaha, and the "water war" will welcome variables again? East China Bureau
2. Inventory of Wahaha's business territory: Zong Fuli is associated with 179 companies, CBN
3. Zong Fuli took over Wahaha for 145 days: frequent management changes, resignation or due to differences in listing goals, Finance Associated Press