Keeping it in the family

Anta boss Ding Shizhong

The headline news this week from the Gates family was that two of the world’s wealthiest people are getting divorced. But it’s no secret that wealthy people often prefer to marry others with plenty of money in the first place. Jared Kushner and Ivanka Trump are a good example. Actress Salma Hayek, reportedly worth $85 million, chose to wed luxury goods tycoon François-Henri Pinault, who has amassed a fortune of more than $25 billion.

In China unions of the ultra-wealthy aren’t unusual either. But the controlling family at a Fujian-based tea leaf seller – which is looking to go public on Shenzhen’s Growth Enterprises Market – has merited mention in the local media for having some of the most impressive marital connections.

Bama Tea, which operates a chain of tea leaf shops, is owned by three brothers: Wang Wenbin, Wang Wenli and Wang Wenchao. Together, the family controls 63% of the company’s shares.

It is Wang Wenbin, 52, who has the tightest ties with some of the wealthiest tycoons in the country. Much of his network is rooted in Fujian province. For instance, his son is married to the daughter of Ding Shizhong, who is chairman and chief executive of Fujian-based Anta Sports, the country’s largest sportswear maker.

Meanwhile, his elder daughter is married to the son of Zhou Yongwei, co-owner of the menswear label Septwolves, which is also based in Fujian. Zhou senior is also the controlling shareholder of the Hong Kong-listed Quanzhou Huixin and Baiying Holdings.

Wang’s other daughter has tied the knot with Gao Li, who controls Gaoli Group, a property developer (although Gao might be classed as more of an outsider, as he is from Jiangsu province).

Chengdu Economic Daily paraphrased Wang Wenbin’s situation thus: “To put it simply, the company I’m in charge of is about to go public. My son’s father-in-law is in charge of a listed company. My daughter’s father-in-law is in charge of three listed companies. And the husband of my daughter, too, is in charge of a very large company.”

The market value of all the companies owned by Wang’s in-laws is said to be about Rmb500 billion ($75 billion) ­– and that’s not including the worth of Bama after its upcoming IPO.

The rich marrying the rich is a reflection of a social phenomenon described as ‘assortative mating’, says economist Tyler Cowen. Often it is not a conscious decision to marry other rich people – the wealthy are just more likely to wed the kind of people they spend the most time with. But the problem with these kinds of unions is that they “propagate inequality across the generations” by concentrating wealth among an elite group of people, Cowen adds. “Rich plus rich equals super rich,” he comments.

Family connections do not seem to have boosted Bama’s bottom line particularly much, however. The prospectus for its IPO shows that in 2020, it sold just Rmb55,200 of tea to Anta and no more than Rmb100,000 in sales to Septwolves.

Bama has over 2,000 stores around China, largely franchises. Revenues increased from Rmb293 million to Rmb595 million between 2019 and 2020. The company is planning to raise about Rmb680 million in the IPO, with the proceeds going towards more marketing spending and improved logistics capability.

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