“When you are poor, you look for a way to get by”, Zong Qinghou used to respond simply, when the press asked him how, starting from nothing, he had become a tycoon of the beverage industry, a figure of the years of strong growth but also of economic nationalism, and the first fortune from China. The founder of the Wahaha group (which means “laughing kid” in Chinese) died on February 25, in Suqian (Jiangsu province). His rise remains the model of an era when everything still seemed possible in China, while the battle he waged against Danone remains, in the West, a textbook case of the difficulty of doing business in this market.
Born in eastern China in 1945, while his country was still at war, Mr. Zong came from a particularly deprived background which, for not having supported the communist forces of Mao Zedong, would be even more disadvantaged once they came to power in 1949. To help his family, he left school at college and started working. In the mid-1960s, the Grand Helmsman decreed the sending of youth to the fields and into industry. Mr. Zong goes to work for a salt factory on Zhoushan Island.
He spent fifteen years doing this work, before returning in 1979 to Hangzhou, the provincial capital, when his mother, a former schoolteacher who had reached retirement age, needed him. The country, now led by Deng Xiaoping, after the years of Maoist madness, is on the eve of economic reforms that will change the course of history.
Bottled water, a key market
Without a diploma, Mr. Zong only finds work as a canvasser and traveling salesman for these new consumer products that China is discovering. In particular, it sells drinks produced by a local company, which also runs a shop adjoining a school. Zong Qinghou, with the help of two retired teachers, took over this small business in 1987, which supplies drinks and ice cream to children. However, he noted that parents were worried, at that time, about the nutritional weakness of the foods given to children in a country that was still poor.
The man was already in his forties when his business took off: in 1989, he developed a drink whose nutritional benefits he praised and launched his brand. He obtained a loan allowing him to buy a state canned products factory. Its 2,000 employees are initially skeptical of the arrival of this capitalist, but profits fall.
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