Title: The Remarkable Rise and Fall of Zong Qinghou: China’s Billionaire Beverage Tycoon
Introduction:
Zong Qinghou, the legendary founder of Hangzhou Wahaha Group and one of China’s most renowned self-made billionaires, has passed away at the age of 79. Born during wartime China and raised in poverty, Zong’s life story embodies the spirit of determination and perseverance that characterized China’s first generation of private entrepreneurs. His journey from a tricycle cart selling ice pops to the founder of one of China’s largest beverage conglomerates is a testament to his vision, hard work, and resilience.
The Entrepreneurial Journey of Zong Qinghou:
Born in 1945, Zong grew up in a poor family in Hangzhou. Despite his difficult childhood and the challenges that came with it, he harbored dreams of making a fortune to repay his parents. After leaving school early to support his family, Zong spent over a decade doing odd jobs, including working at a remote state-owned farm during the Cultural Revolution. In 1978, with China’s economic reforms underway, Zong returned to Hangzhou and started working as a salesman. It was during this time that he had an opportunity to establish his own company, selling ice pops and stationery to students.
The Birth of Wahaha:
In 1987, Zong borrowed 140,000 yuan to set up his retail company. The company, which employed only two retired teachers and sold ice pops for a penny each, would later become Wahaha. During his door-to-door sales, Zong discovered that many children were malnourished and realized there was an opportunity to produce a nutritious drink for them. Partnering with a professor of nutrition, they developed Wahaha Oral Liquid, a vitamin drink for children that became an instant success. With annual sales reaching nearly 100 million yuan in 1991, Zong founded the Hangzhou Wahaha Group after acquiring a failing state-run canned food factory.
Expansion and Challenges:
By 1996, Wahaha had expanded its product line to include milk drinks, carbonated beverages, and bottled water. Zong developed a long-term business plan that required significant investment. Securing a loan of this size from state-owned banks proved challenging, and Zong turned to foreign capital. Wahaha entered into a partnership with Danone, which acquired a controlling 51% stake in the joint ventures.
The Partnership Sours:
However, the partnership soured in 2007 when Danone publicly accused Wahaha of selling Wahaha-branded drinks outside their joint ventures and cutting the French company out of the earnings. Zong saw this as a hostile takeover attempt and accused Danone of trying to buy out Wahaha’s stake at a low price. The dispute escalated into a high-profile legal performance that made international headlines and even reached the agenda of a meeting between Chinese and French presidents in Beijing.
The Resolution:
The dispute was eventually settled in 2009, with Danone selling its stake for about $500 million and ceding all control to Wahaha. Zong described the legal performance as a “beautiful self-defense counterstrike to defend the dignity and interests of a national enterprise.”
Legacy:
Zong Qinghou’s passing is mourned by many in China, including prominent entrepreneurs Jack Ma and Lei Jun. Known for his frugality and dedication to work, Zong’s story is a testament to the power of determination, hard work, and resilience. His rise from poverty to becoming one of China’s richest men embodies the entrepreneurial spirit that helped propel China’s explosive economic growth during the late 1970s and beyond.
Conclusion:
Zong Qinghou’s life story is a testament to the power of determination, hard work, and resilience. Born during wartime China and raised in poverty, he rose to become one of China’s most successful entrepreneurs, leaving behind a legacy that continues to inspire generations. His journey from a tricycle cart selling ice pops to the founder of one of China’s largest beverage conglomerates is a reminder of the can-do spirit that characterized China’s first generation of private entrepreneurs and helped propel its explosive economic growth.
