△ Add friend and note "inspection" to register Text | 《中国企业家》 reporter Xie Yunzi Photo | Shi Xiaobing At 73, Zong Qinghou has recognized the need to cultivate successors and middle management, yet he still adheres to a schedule of starting work at 7 a.m. and ending at 11 p.m. He says he will work another 20 years to build Wahaha into a century-old company. In the 40 years of business history since China's reform and opening up, Zong Qinghou is a legendary figure: starting from a school-run factory, acquiring Hangzhou Canned Food Factory, the Danone-Wahaha dispute, and topping China's rich list three times. Like many real economy entrepreneurs, Zong Qinghou is outspoken and often makes surprising remarks. His most recent attention-grabbing statement was at the "China Development Forum Special Symposium" in September 2018, where he called for reducing personal income tax. Zong Qinghou believes that "the government should tighten its belt, tax authorities should further liberate their thinking, levy less tax, and distribute more to the people so they can consume. On the surface, national tax revenue might decrease slightly, but in reality, the tax base expands, and tax revenue not only won't decrease but will increase." In his view, the Chinese market lacks neither supply nor demand. If domestic market demand can be effectively activated, it is entirely possible to achieve supply-demand balance through our own strength. This is precisely because he identifies with reform and opening up, which changed production relations and stimulated productivity. He says he will work another 20 years to build Wahaha into a century-old company. Using a Merger To Reach Consensus on Equal Development of Private and State Enterprises Zong Qinghou is the eldest son in his family. To reduce the family burden, he went to the countryside after junior high school to work at the Mamu Farm in Zhoushan, and a few years later moved to the Shaoxing Tea Farm, spending 15 years in rural areas. After returning to Hangzhou, he took over his mother's position and worked as a salesman in a primary school-run factory. Perhaps to make up for the lost years of youth, in 1987, Zong Qinghou began "internal entrepreneurship" within the school-run factory. In 1989, Zong Qinghou established Hangzhou Wahaha Nutritional Food Factory and successfully launched his first product—children's nutritional liquid. Wahaha children's nutritional liquid was warmly received upon launch, and Zong Qinghou earned his true first pot of gold. In 1991, Zong Qinghou decided to expand production and build factories. At the same time, the Hangzhou Municipal Party Committee hoped Wahaha could merge with Hangzhou Canned Food Factory (hereinafter referred to as Hangzhou Canned Food Factory). Hangzhou Canned Food Factory was a large state-owned food enterprise at the time, with over 100 mu of land, more than 60,000 square meters of factory buildings, and over 2,000 employees. After Zong Qinghou decided to merge with Hangzhou Canned Food Factory, he faced opposition from many. Employees of Hangzhou Canned Food Factory could not accept that a large state-owned factory would be merged by a small school-run factory, and some even organized "factory protection teams" and "production self-rescue committees." Wahaha's own employees also worried about being dragged down by Hangzhou Canned Food Factory. But through Zong Qinghou's layer-by-layer communication and assurances, all employees finally reached a consensus. "At that time, I mainly said three things," Zong Qinghou told 《中国企业家》. "First, the issue of who is bigger and who is smaller. Although Hangzhou Canned Food Factory had many employees, it lacked good products and sales channels, was heavily in debt, and had weak capabilities and a small market. Second, after the merger, I guaranteed that employee income would increase. As long as everyone worked hard, I promised to treat employees from both sides equally. Third, I assured the original cadres of Hangzhou Canned Food Factory that their positions would remain unchanged after the merger. After hearing these three points, everyone was happy and applauded to pass the decision for Wahaha to merge with Hangzhou Canned Food Factory." But there were still many dissenting voices in society. "At the time of the merger in 1991, Comrade Deng Xiaoping had not yet delivered his Southern Tour speeches. Many people said we were dismantling the state-owned economy and restoring capitalism, but we were determined to carry it through. Wahaha also received affirmation from the then provincial and municipal leaders. Finally, I made a clear statement: we directly spent over 80 million yuan to take over all assets and liabilities of Hangzhou Canned Food Factory, and decided to accept all active and retired employees of Hangzhou Canned Food Factory." Zong Qinghou told 《中国企业家》 magazine. Although the cost of merging with Hangzhou Canned Food Factory was relatively high, just three months later, Zong Qinghou turned the factory from loss to profit. The merger became a key node for Wahaha to achieve scale operations. It was also a historical node that private and state enterprises experienced together during the reform era. Zong Qinghou has experienced the era of reform and opening up. As a representative of Chinese private enterprises, Wahaha's 30-plus years of development history includes both the push of the times and the fruits of personal struggle. In the past period, the saying "the state advances, the private sector retreats" has been rampant. Some economists believe that the current difficulty in corporate financing is not a matter of total financing volume but of financing structure. What needs to change is not deleveraging but the "state advancing, private retreating." Zong Qinghou also believes that state-owned enterprises and private enterprises should be treated fairly, and the wealth of private enterprises belongs to both the country and society. This may be the concept of "reform community" advocated by 《中国企业家》 magazine. But in Zong Qinghou's view, the enterprises and entrepreneurs of his generation are undoubtedly fortunate. "It was reform and opening up that gave me the opportunity and platform to start a business, and to do some practical things for the country's prosperity and national rejuvenation. This is the honor of our private entrepreneurs." Building Core Competitiveness Amid Conflict Let's rewind to the 1990s. After the merger with Hangzhou Canned Food Factory, in 1994, Wahaha faced another important node. To solve problems like bad debts and triangular debt, Zong Qinghou introduced the joint sales system, strictly controlling and grading distributors, requiring payment before delivery. The joint sales system essentially resolved the relationship between manufacturers and suppliers. In the view of many, this system also laid the foundation for Wahaha's massive marketing network. From the beginning, Zong Qinghou adopted a "rural surrounding the city" strategy, signing joint sales agreements with nearly 8,000 distributors. A new product could appear in shops in remote mountain villages within just one week. In 2013, Wahaha set a record revenue of 78.3 billion yuan, and Zong Qinghou topped the "Forbes China Rich List" three times. It can be said that Zong Qinghou is one of the entrepreneurs who best understands China's channel attributes. However, after Wahaha grew rapidly through the joint sales system, Zong Qinghou turned his attention more to the world, hoping to leverage the strength of global top enterprises to take Wahaha to the next level. In February 1996, Wahaha, Danone of France, and Hong Kong's Peregrine Investments formed a joint venture, with Wahaha holding 49%, Danone holding 35.7%, and the remaining shares belonging to Peregrine. After the Asian financial crisis in 1997, Peregrine went bankrupt and sold its shares in the joint venture to Danone, making Danone the largest shareholder of the Wahaha joint venture. Because profits grew year after year, Wahaha and Danone had a honeymoon period. However, because Danone did not understand the Chinese market, disputes arose over "contract manufacturing plants." "Since we couldn't find contract manufacturing plants that met our output and quality requirements, to protect the market, our cadres and employees pooled funds to build a batch of factories to process products for the joint venture and also share sales expenses. These were all done openly under the noses of the financial controllers sent by Danone, and the accounting firms designated by Danone clearly listed these non-joint venture companies in the audit memos they provided to Danone each year. Danone never raised any objections." On the other hand, after the joint venture with Wahaha, Danone also heavily invested in and even took controlling stakes in Wahaha's main competitors such as Robust and Bright. The situation became extremely unpleasant in 2005 when Danone's newly appointed chairman, Emmanuel Faber, demanded that Wahaha Group completely transfer the "Wahaha" trademark to the joint venture. And because in 2006, Danone-controlled Robust and others had been losing money for years, Danone demanded that Robust acquire Wahaha's non-joint venture companies at a low price. Zong Qinghou began to face arbitrations and lawsuits from "all over the world." In the following two and a half years, Zong Qinghou taught himself law and organized a massive defense team. In July 2008, Zong Qinghou achieved an important victory in Stockholm, Sweden—the arbitration tribunal rejected Danone's request to clean up the non-joint venture enterprises. In other lawsuits around the world, Zong Qinghou also achieved final victories. Of course, he paid a price for this. According to media reports, Wahaha spent over 100 million yuan on litigation fees alone. On September 30, 2009, with coordination from both governments, the two sides finally reached a friendly settlement. Danone decided to sell all its shares in the Wahaha joint venture group. With that, the "Danone-Wahaha dispute" came to an end. Some media commented that the "Danone-Wahaha dispute" was the most influential international business war in the 40 years of reform and opening up. From start to finish, Zong Qinghou's attitude was tough, and he received widespread public attention and understanding. The Road Is Long, and He Has Not Stopped Wahaha was once a potential market value king, but times are changing. Since 2015, Wahaha's sales performance has been declining at a rate of 20% per year. In 2017, Wahaha's revenue was only 46.4 billion yuan, nearly half of its record high of 78.3 billion yuan in 2013. In the upcoming 2018, Zong Qinghou is also promoting changes at Wahaha: re-entering the health products industry, cooperating with Pinduoduo, and testing social retail. Even regarding listing, Zong Qinghou's attitude has changed, and he publicly stated: "Listing can accelerate enterprise development, and we will consider it at an appropriate time." Wahaha's product philosophy is also shifting from "safety" to "health," launching some health products. It is also looking for opportunities to enter high-tech industries, but Zong Qinghou also said, "We are very cautious and must fully consider it; we cannot drag down our main business." "The golden morning sun flowed in through the window, ordinary, just like before. The white poplar in front of the building has indeed grown a bit thicker, but it also looks ordinary, just like before. It is winter, and the leaves have all fallen; but I believe they are curled up in the soil, dreaming of spring." This is a line from Ji Xianlin's work "Reflections at Eighty" that Zong Qinghou recited in May 2018 on the program "The Reader." Like most entrepreneurs of that era, Zong Qinghou is most familiar with "Selected Works of Mao Zedong." When first invited to record "The Reader," Zong Qinghou's first choice was "Snow·Qinyuanchun," but because the poem was too short, he switched to "Reflections at Eighty." Now, looking again, Wahaha's current situation may resonate with the poem. A gentle revolution may be quietly taking place internally. For decades, Zong Qinghou has adhered to his original aspirations and philosophy. He opposes the internet's massive burning of money to buy traffic, which disrupts the market prices of the real economy, and believes it sells the hard-won fruits of the real economy at a low price. He has always been based on industry, with 31 years of no debt and no bonds issued, and Wahaha has never had a penny of bank loans. In Zong Qinghou's view, this makes the real economy more stable. Of course, at 73, Zong Qinghou has recognized the need to cultivate successors and middle management, yet he still adheres to "starting work at 7 a.m. and ending at 11 p.m." Zong Qinghou wants to continue moving forward, as he said on "The Reader": "As long as there is a possibility, I must do something beneficial to the country and others." Even though "the road ahead will not be straighter or smoother than the past." Tenth B-end E-commerce Inspection--"From Product to Scene" Activity time: December 10-13 Activity location: Wuhu, Nanjing, Changsha Activity process:
Morning of December 10: Inspect Three Squirrels headquarters + snack store
Afternoon of December 10: Inspect Nanjing Squirrel Small Store
Evening of December 10: Inspect Nanjing Master Gao Beer Workshop Store
All day December 11: Nanjing-Changsha, or free arrangement
Morning of December 12: Community group buying exchange salon
Afternoon of December 12: Koala Selection Hero League press conference
Evening of December 12 to early morning of December 13: Field inspection of Koala Selection logistics center—This time period is the peak sorting period in the warehouse, allowing direct observation and learning of the backend operation process of community group buying e-commerce Distributor friends who are interested are welcome to join us to learn and conduct field inspections: Organization format 1. Big shot exchange salon**************2. Company visit
- On-site explanation
- One-on-one communication**************5. Actual market case visit Friends who want to participate If you are interested in the content of a certain day, you can register separately Long press this QR code or click "Read Original" to register in one click! Add friend and note your intention -END-