Zong Qinghou, the founder and chairman of Chinese beverage behemoth Hangzhou Wahaha Group, died on Sunday at the age of 79, according to the firm.
According to Wahaha’s statement, Zong died of an unidentified ailment. As speculations circulated about the tycoon’s health, the company confirmed on Thursday that he was undergoing hospital care and was in stable condition.
Zong leaves behind a large food and beverage conglomerate worth billions of dollars in annual sales. The mogul, who never finished high school and was instead assigned to labor in the countryside during China’s violent Cultural Revolution, capitalized on chances created by the country’s economic reforms.
The entrepreneur did not go into business until 1987, when he was already in his forties. Zong began by selling snacks in a local school canteen in Hangzhou, and his business grew from there. Over the years, the mogul launched successful items such as bottled water and nutritional beverages for children under the brand name Wahaha, which was intended to simulate the sound of a child’s laughter. After acquiring a state-owned facility to increase output, Zong established a network of thousands of distributors, allowing him to sell throughout the country.
In 2010, he became China’s richest person with a net worth of $8 billion. The previous year, Zong resolved a cooperation issue with France’s food and beverage behemoth Danone. In 2007, Danone accused its Chinese partner of utilizing non-joint venture distributors to sell Wahaha-branded items, leading to a strained alliance. Later, with the approval of both the Chinese and French governments, Zong agreed to buy Danone’s 51% ownership in their numerous operations for an undisclosed sum (one media estimate was $380 million).
In 2012, Zong returned to the top of Forbes’ China wealth rankings, with a net worth of $10 billion. However, things haven’t gone smoothly since. Nongfu Spring, founded by billionaire Zhong Shanshan, has challenged Wahaha’s dominance through innovative marketing and products. Zhong is currently China’s richest person. Furthermore, Zong was late to China’s internet growth and was initially hesitant to experiment with online commerce. In 2014, he publicly said that e-commerce was undermining China’s “real economy.” Although Wahaha’s viewpoint altered as he began to conduct more internet marketing, the mogul still looked to favor traditional brick-and-mortar establishments.
“I don’t think traditional sales channels will change much,” Zong told Forbes Asia on the sidelines of the Forbes Global CEO summit in Singapore in 2019. “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 ranked 53rd on China’s 100 Richest list, with a net worth of $5.9 billion. According to the All-China Federation of Industry and Commerce, a business organization that collects data on China’s private enterprises, privately held Wahaha generated 51.2 billion yuan ($7.1 billion) in revenue in 2022, despite a rumored $1 billion IPO in 2020. That sum is almost one-third lower than the peak of $11 billion in 2013. Now, it may be up to his daughter Kelly Zong, the company’s CEO and vice chairman, to rekindle momentum.
Kelly, who dabbled in entrepreneurship by founding juice brand KellyOne in 2016, has taken on a larger role in recent years. Under her leadership, Wahaha has expanded its social media efforts and replaced long-time brand ambassador singer-songwriter Wang Leehom. The corporation is also viewed as catering to the tastes of the younger generation by introducing more tea-based and sugar-free beverages.
In a 2019 interview with Forbes Asia, senior Zong stated that he is willing to hand over the reigns to Kelly. If not, he will pursue 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 said. “My daughter oversees various factories. Is she willing to take on more? That is something I do not know.” Two years later, in 2021, Zong appointed Kelly as CEO and vice chairman of Wahaha.