Zong Qinghou, a self-made beverage entrepreneur who was once the richest person in China, passed away on Sunday.
His company, Wahaha Group, announced his death, stating that Mr. Zong had succumbed to an undisclosed illness at the age of 79. The company’s statement did not provide further details.
Mr. Zong’s inspiring journey from poverty to wealth had already made him a prominent figure in China before a public dispute with his foreign business partner significantly raised his profile — and his fortune. He established a beverage company in the 1980s and later collaborated with Danone, the French food giant, in the 1990s to introduce one of the most well-known food and beverage brands in China.
Tensions escalated in 2007 when Danone accused Mr. Zong of operating secret companies that sold nearly identical products, diverting up to $100 million from their joint venture.
Mr. Zong retaliated, claiming that Danone was aware of the companies. He vowed to hold Danone accountable for its actions and rallied public opinion in China against the foreign company.
The dispute became so bitter that France’s president, Nicolas Sarkozy, raised the issue in a meeting with China’s leader, Hu Jintao. In 2009, Danone sold its 51 percent stake, granting full control to Mr. Zong’s company.
In the following years, Forbes named Mr. Zong the wealthiest individual in China, with a fortune of $8 billion in 2010 and $10 billion in 2012. However, his wealth has since declined to $5.9 billion, ranking him 53rd on last year’s list of China’s billionaires according to Forbes.
He is survived by his wife, Shi Youzhen, and their daughter, Zong Fuli (also known as Kelly Zong), who serves as the president of Hangzhou Wahaha Group and Mr. Zong’s successor.
Mr. Zong, who grew up in poverty, was known for his simple lifestyle. He stated in interviews that he arrived at the company headquarters before 7 a.m. and worked until 11 p.m., with no hobbies other than smoking and drinking Lipton tea.
Born in October or December of 1945 (traditional Chinese age calculation considers a person 1 year old at birth), Mr. Zong was raised in or near Hangzhou, a city close to Shanghai. Like many youths during the Cultural Revolution, he was sent to the countryside and spent years working at a farming commune.
In 1978, he became a traveling salesman, coinciding with the start of Deng Xiaoping’s capitalist reforms. About ten years later, Mr. Zong set up a stall near a primary school, selling soft drinks and frozen treats.
Witnessing hungry children inspired him to create a vitamin drink called Wahaha Oral Liquid. This led to the establishment of Hangzhou Wahaha Group, specializing in bottled water, soft drinks, teas, infant formula, and children’s clothing.
In 1996, the company partnered with Danone to form the Wahaha Joint Venture Company, which became a significant player in China’s beverage market by 2012, holding 15 percent market share behind Coca-Cola and Tingyi Holdings.
Following Danone’s allegations of misconduct, Mr. Zong defended himself in an open letter, accusing Danone of spreading falsehoods about his business practices and tarnishing his family’s reputation. Wahaha officials organized rallies and press conferences denouncing Danone officials as “rascals.”
Danone eventually sold its stake for approximately $500 million, significantly less than market analysts had estimated.
While the breakup caused concern among multinational companies, particularly in industries with joint venture requirements, it was more of an isolated incident than a trend. In the years since, multinational corporations have faced more formidable challenges.
Geopolitical tensions between China and the United States have led to sanctions, impacting many businesses. Extended “Covid zero” policies and other restrictions have severely affected production and sales for numerous companies. Chinese state security agencies have become quicker to shut down foreign businesses, particularly due-diligence firms, that raise concerns.
Reflecting on the Danone incident, Ker Gibbs, former president of the American Chamber of Commerce in Shanghai, noted that while it garnered significant attention, the overall business environment during that time was stable and supportive of foreign enterprises.
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