Zhong Shanshan, China’s richest man, understands the importance of corporate reputation. He established Nongfu Spring, a bottled water company, by claiming that their water comes directly from the source, making it superior to competitors. In 2015, he told Hong Kong television that a company’s reputation in the market economy is more valuable than its fixed assets. “If the reputation is bad, nothing can be sold.”
Nongfu Spring is learning this lesson right now, as the brand is being targeted by nationalist social media users in China who accuse the bottled water company of supporting Japan.
On Chinese social media platforms, users are video themselves dumping Nongfu water into the toilet or cleaning the floor.
Nongfu’s crime? It allegedly uses Japanese-style pictures on its bottles. Nongfu claims its package designs are inspired by Chinese temple architecture.
The recent death of Zong Qinghou, creator of competing company Wahaha, may have contributed to the social media craze. Some accuse Zhong of sabotaging his ex-partner, Zong. (Zhong formerly worked as a Wahaha sales agent.)
On Friday, two 7-Eleven outlets in Jiangsu province announced the removal of Nongfu goods off their shelves. Bloomberg reports a drop in sales over the past two weeks, citing domestic media.
The social media outcry over Nongfu Spring is benefiting its competitor Wahaha, as consumers share photos of themselves enjoying Wahaha goods, alongside appeals to support the brand over Nongfu.
Nationalist shoppers have already targeted foreign brands for purportedly disparaging China. In 2018, Chinese users blasted Dolce & Gabbana over an advertisement portraying a Chinese woman eating Italian food with chopsticks. The fashion firm is still coping with the implications today.
In early 2021, users boycotted H&M as the fashion retailer decided to discontinue using cotton from Xinjiang.
More recently, Chinese internet users were outraged at a photo on Apple’s website of a customer care agent with a pigtail hairstyle, which they claimed perpetuated anti-Chinese stereotypes. Nationalist Chinese users accused Apple of insulting China, despite the photo being shared abroad. Apple then informed Chinese media that the employee in question was Native American and stationed in California.
Chinese internet users are asking for boycotts of Japanese beauty items and other commodities in response to Japan’s decision to release treated effluent from the Fukushima nuclear power plant. Following the release of treated wastewater, Beijing stopped imports of Japanese seafood.
However, the outrage over Nongfu Spring demonstrates that domestic brands are not immune to nationalist criticism. According to Nikkei Asia, even Huawei, the country’s tech champion, was questioned on social media for naming its native smartphone chip “Kirin,” after the Japanese mythical beast.
Nongfu’s stock is declining as a result of the incident. Over the past two weeks, the drinks company’s market worth dropped by almost 30 billion Hong Kong dollars ($3.8 billion), but shares have rebounded marginally since the weekend.
Who is Zhong Shanshan?
Bloomberg puts Zhong’s net worth at roughly $63 billion, making him China’s richest person. (The second richest person in China, according to Bloomberg, is ByteDance founder Zhang Yiming, who has a fortune of $42.3 billion.)
He began his journalism career in the 1980s as a reporter for Chinese state-owned media. But he swiftly transitioned to commerce, selling everything from mushrooms to health supplements.
Zhong shifted his attention to water in 1996, establishing Nongfu Spring in his hometown of Hangzhou. He used the poor drinking quality of China’s tap water to expand his business, promoting the brand as supplying high-quality drinking water directly from the source.
Nongfu Spring sells more than just bottled water; they also sell ready-to-drink tea, fruit juice, and coffee.