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China

Zong Qinghou - A No-Frills Beverage King

Zong Qinghou (left), head of China's biggest beverage empire Wahaha
Zong Qinghou (left), head of China's biggest beverage empire Wahaha
Tang Xiangyang

HANGZHOU — It's well known that nobody in Wahaha, China’s biggest beverage empire, dares challenge the word of Zong Qinghou. But the cult of personality surrounding the group’s founder, dubbed the "beverage king," goes much further: There are reports of how employees at a Wahaha dealers’ meeting shout Viva Wahaha! Viva Zong Qinghou!, and the rest of the audience breaks into applause.

After working on farms for 15 years, it was his mother’s retirement that pushed Zong, at the age of 33, to replace her in her job as a salesperson for a cardboard-box factory —and step into the world of business that he was destined to conquer.

Ten years later he borrowed 140,000 RMB ($23,000) and founded his own business selling frizzy drinks, ice pops, and oral solutions of pollen. By 2012, Forbes ranked him as China’s richest man. And although he is 68 years old today, he won't even speak of his own retirement. “I’m only a middle-aged man. I’m working until 90,” he quips.

As a member of the first generation of entrepreneurs after China's economic reform in the late 1970s, Zong is one of the few that got off to a rather late start — he was already 42 when he started his own business. In his early days as a mini-grocery boss, he would ride a tricycle delivering goods himself. At lunch time, he and the other dozen workers would cook their own meals because they couldn’t afford eating out.

Cities and towns

Even today, Zong still agrees with anybody who describes him as overworked and stingy. Staff who have been with the company for years will tell you that Zong doesn’t spend more than 50 bucks a day. Apart from his Davidoff cigars and Longjing tea he doesn't appear to have any great outside passions or hobbies.

His ascetic approach translates into the way he manages his business. In the early 1990s, China’s beverage market was more or less unchartered territory, and any new product could potentially evoke buying enthusiasm. In this context, Wahaha, meaning "laughing children," was born at the right moment.

Still, being ahead of the market means having to find out unexplored consumer appetites. Zong developed a habit of visiting markets all year around, traveling well beyond the confines of Hangzhou where his company is based, and the big coastal cities, venturing into small cities and towns all over the country. These are the markets that are especially difficult for foreign enterprises or even local businesses to take over, and they make up Wahaha’s core base to this day.

Zong also spends three months each year overseas studying foreign markets, tastes and products. And although he doesn't use a computer, he makes sure an assistant takes a printer so that he can print out Wahaha’s sales data for close study. Zong is able to go through the company’s balance sheets in major markets within half an hour. He can also tell you any and all details about his products; for example, that a Wahaha beverage bottle cap has 18 teeth marks.

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A bottle of Wahaha water (right) — Photo: kanegen

Zong jokes about his workaholic ways. His favorite reading is the county maps of China. He plays no golf, and until last year, despite a net worth of more than 100 billion RMB ($16.5 billion), Zong took it as granted he could come and go on his own without a body guard or assistant. That changed when he was attacked on the street near his home last September by a mentally unstable unemployed man.

Single-mindedness seems to be Zong's key virtue as a businessman. When China’s stock market was booming, some advised him to invest in it. “I don’t understand this market,” he said. When the real estate was particularly hot he also refused the invitation to join in.

Since his business wisdom came from practical experience in his field, he won’t go into any activity he doesn’t know well. He notes that he took over a grocery store only after working for it as a contractor for 10 years first.

Bumpkins and kings

With no guide nor any overseas examples, it was up to Zong to react to his own experiences — it seems to be the singular shared characteristic of Chinese entrepreneurs of his generation. This is perhaps especially true for the ever-changing retail business. As Zong says, he has always relied on “intuition and experience.”

Wahaha’s advertisements target directly consumers’ demand. His sales network runs throughout the entire country, covering even the fifth and sixth-tier cities. He has no right-hand-man even today, and he meets personally with every one of his major wholesalers — there are more than 8,000 of them — every year. He wears Chinese-made suits with black canvass shoes, cutting a figure much like the average consumer of his products.

A huge statue of Zong was erected in the Wahaha headquarters in Hangzhou City, and staff always start their business reports by the words “Following your instruction…” Still, Zong is not an arrogant man, openly worried that crisis could strike.

His own daugther, who studied and lived abroad for years, has jokingly referred to this old-style Chinese entrepreneur as a “bumpkin.” To describe his cheap tastes and hard work, Zong has also used the old poor emigrant slur of "coolie" to describe himself. But the harder part will be how the beverage "king," with no plans of retirement, passes power onto the next generation.

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