Zong Qinghou certainly does not look like the richest man in China.
The chairman of China’s powerful Wahaha soft drinks group is in Beijing this week to attend a meeting of the National People’s Congress, the country’s parliament.
Dressed in a humble blue suit and chain smoking cigarettes that, he proudly points out, cost only Rmb12 ($1.82) per pack, he comes across as a man of the people – the people who buy his soft drinks.
Mr Zong, 66, is known as the “drinks king” of China: but he wants to be much more. In a wide-ranging two-hour press conference, he sketched out plans to diversify into areas from shopping mall development to farming and mining in China; said he is looking for more overseas partnerships to source raw materials abroad; and talked about an overseas technology partnership to improve the energy footprint of his factories.
Overseas, he is best known for waging a legal battle against Danone, the French food group. He won some legal rulings in their long-running trademark and contract dispute, and lost others; but most lawyers and industry analysts agree that he outsmarted Danone, with whom he had a 13-year joint venture which developed many of China’s top drinks brands.
“Danone made a mistake. They trusted their local partner too much – and he used it to his advantage,” says Shaun Rein of China Market Research in Shanghai.
Mr Zong reflected philosophically on that joint venture, telling the FT that the main lesson of the dispute for foreign companies investing in China is that such partnerships should be struck on the basis of “equality and mutual benefit”: “Chinese people are very tolerant, but we refuse to be bullied”.
Danone had accused Mr Zong of setting up copycat operations outside its joint venture, to sell competing products under the Wahaha trademark, which he denied. The two sides eventually settled out of court late in 2009.
Now Mr Zong is ready to move on: “It is time to expand both upstream and downstream,” he said, though he gave few details. His goal, he said, is to become one of the world’s “strongest” 500 companies within five years.
Speaking in the heavy accent of his native Zhejiang province, cradle to some of China’s richest entrepreneurs, he mused on the nature of wealth in China, the unique challenges of managing a Chinese workforce (“we can’t just import foreign management styles into China, we need a whole new way of managing”), and the rhythms of product development in one of the world’s most demanding consumer markets. Asked what dreams he had for his life, he said that apart from career success, he had “none” – a not unusual position for Chinese entrepreneurs of his generation, who often display a formidable work ethic. But now he says it is time for others within the company – which employs 30,000 people, half of whom have company shares – to start taking over his role of “innovator-in-chief”. Consultants routinely cite Wahaha as one of the most innovative companies, local or foreign, operating in China.
Ted Hurley, associate director FCMG at Nielsen in Shanghai, says: “Wahaha is especially famous for innovation. It makes lots of new things and sure, some fail. “But it moves quickly and is adaptable.”
上海中国市场研究集团(China Market Research)的雷小山(Shaun Rein)表示：“达能犯了一个错误。他们太过于信任本土合作伙伴——而宗庆后则利用了这一点。”