The 64 year-old Zong Qinghou from Zhejiang province was a teacher until he turned 42. Then he and two colleagues got Rmb140,000 of loans to start selling children’s health drinks. The business was named Wahaha, which means ‘happy children’.
In September 1991 he took over the Hangzhou Canned Food Factory, an unusual case of a ‘small fish eating a big fish’ to use the Chinese idiom. The company pulled in investment from Danone in 1996 and launched ‘Future Cola’ in 1998 – a direct assault on Coke and Pepsi. Wahaha is one of China’s strongest brands in soft drinks, bottled water, fruit juices and yogurt beverages.
Need to know
Wahaha has 40 manufacturing bases and sells its products through 2 million sales outlets. It hopes to hit Rmb50 billion ($7.3 billion) in sales this year. But it is also in dispute with Danone, which has accused it of selling identical products under the Wahaha brand in violation of their joint venture agreement. Since the dispute began in 2007 Wahaha has gone it alone, launching new products outside the Danone JV structure.
Zong says his role model is Mao Zedong. Internally his management ethos is known as ‘Zong at the helm, with power only decentralised on minor issues’. He says an enterprise needs to be run like an army with a unified will. Then again, incentives are less Maoist. Employee bonuses constitute about half of yearly wages, and staff get equity too.
In his own words
“To do well in business at the present stage in China, you have to be tyrannical but open-minded.”
Is he living a life of luxury?
Not exactly. He likes to eat tofu and vegetables; his only concession to luxury is high quality Longjing green tea, which he drinks in large quantities.
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