---
title: "Can Zong Fuli Be Propped Up?"
description: "Zong Qinghou seems to intend to give his daughter Zong Fuli more time to gain experience, but the question is whether the 37-year-old Zong Fuli can handle the 32-year-old Wahaha. This article explores the challenges and uncertainties surrounding the succession of the beverage giant."
author: "林翠萍"
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published: "2019-05-01"
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# Can Zong Fuli Be Propped Up?

> Zong Qinghou seems to intend to give his daughter Zong Fuli more time to gain experience, but the question is whether the 37-year-old Zong Fuli can handle the 32-year-old Wahaha. This article explores the challenges and uncertainties surrounding the succession of the beverage giant.

Zong Qinghou seems to intend to give his daughter Zong Fuli more time to gain experience, but the question is whether the 37-year-old Zong Fuli can handle the 32-year-old Wahaha.
Author: Lin Cuiping
Source: Entrepreneur Bang (ID: ichuangyebang)

**Zong Qinghou is not ready to retire yet.**
Recently, media quoted Zong Qinghou as saying, "I think I should prepare to step back from the front line," which was interpreted as a signal of his intention to retire. However, the Wahaha Group quickly clarified: "Zong Qinghou currently has no specific retirement plan, nor does he intend to step back from the front line."

The issue of succession in the family business Wahaha has long been a major concern for outsiders. Since Zong Fuli returned from studying in the United States and joined Wahaha Group in 2004, news about "cultivating the daughter as a successor" has never ceased. At that time, Zong Qinghou would always say with a smile: "Wait until I'm 70, I'll help my daughter get on the horse and send her off, then I can take a break."

Now, 15 years later, Zong Qinghou, who is nearly 74, has subtly changed his statement: "As for succession, it depends on whether my daughter is willing. It doesn't have to be my daughter; it could also be management succession. So I am already preparing for management succession."

In 2007, Zong Qinghou spun off Hangzhou Hongsheng Beverage Company, which mainly handles food and beverage production and processing, to his daughter Zong Fuli for independent operation, gradually giving her independent authority. Currently, Zong Fuli has become the president of Hongsheng Beverage Group, an entity independent of Wahaha, with 16 production bases and 44 subsidiaries, carrying about half of Wahaha's output. Since last year, Zong Fuli has also served as the head of Wahaha's Brand and Public Relations Department. At that time, the media interpreted this as Zong Qinghou beginning to prepare for the internal power transition within Wahaha.

But to this day, Zong Qinghou's remark "let her develop freely" seems meaningful, indicating that Zong Fuli, widely recognized as Wahaha's "successor," may not necessarily take over the Wahaha Group. Zong Qinghou seems to intend to give his daughter more time to practice, but the question is whether the 37-year-old Zong Fuli can handle the 32-year-old Wahaha? And time is running out for her.

**Unwilling or Afraid to Let Go?**

Once, the word "retirement" was almost never on Zong Qinghou's agenda. "There's no need to speculate too much about the successor. I'm not considering retirement; at least I can work until 70."

Some say this is because Zong Qinghou is too infatuated with the kingdom he built with his own hands and is unwilling to easily delegate power.

Insiders describe Zong Qinghou as "having a strong desire for control, even somewhat domineering." For many years, Zong Qinghou held the positions of both chairman and general manager of Wahaha, with no deputy general managers (this only changed in January 2016 when Wahaha internally promoted three deputy general managers).

"He never takes vacations or even weekends off, spending two-thirds of his time each year visiting markets, and almost all market decisions are made by himself," and "Wahaha minus Zong Qinghou equals zero," Zong Fuli once commented on the relationship between Wahaha and her father. "They wait every day for the boss's (Zong Qinghou's) instructions. The company has systems, but they are virtually ineffective. Everyone is used to waiting for the boss's fax every night, then writing 1, 2, 3, 4, 5, 6, 7, and then who does what."

**But rather than being unwilling to let go, it's more accurate to say he is not yet assured to let go.**

Starting from a small school-run enterprise, Wahaha has grown into a leading beverage company in China, with over 80 production bases and total assets of nearly 40 billion yuan. This was not easy. An insider said, "Wahaha is everything to the old man." Zong Qinghou has also made a heartfelt confession to Wahaha: "It is the dream of my entire life, and it is the proof of my existence in this world."

**For Zong Qinghou, continuing his dream and building Wahaha into a century-old brand is the top priority. As for who will continue the dream later, if Zong Fuli is willing and competent enough, her succession is probably what he most wants to see, right?**

Zong Qinghou also intends to give his daughter more time to practice. "I let her explore on her own. I believe she will definitely do better than me, although there may still be a long way to go."

From the beginning, Zong Fuli was cultivated according to the requirements of a "successor."

Like most second-generation rich, Zong Fuli received a Western education from a young age. After graduating from Pepperdine University in Los Angeles with a degree in International Business in 2004, she returned to China and joined Wahaha Group, starting from grassroots positions. Over more than a decade, she has managed Hongsheng Beverage Group, which handles OEM processing for Wahaha beverages, understanding all aspects of beverage production, including ingredient ratios, food disinfection processes, and how to safely distribute tons of beverages.

According to Zong Fuli, in Wahaha Group, she and her father have a rough division of labor: she is responsible for production management, while Zong Qinghou is responsible for marketing. Zong Qinghou is known for his sales channel system in Wahaha's operations, while Zong Fuli focuses more on the improvement of the entire industry chain.

Zong Fuli's performance has not been bad. One data point: from 2009 to 2012, the annual revenue growth rate of Hongsheng Group, which Zong Fuli led, exceeded 30%. In 2012, the various branches of Hongsheng across the country achieved annual revenue of 10.874 billion yuan, accounting for one-fifth of Wahaha Group's total revenue.

**Despite this, in Zong Qinghou's eyes, his daughter may still need more experience.**

As a post-80s with Westernized education, Zong Fuli has formed a set of Western-style logic—"directness, efficiency, and self." This has caused her to be somewhat "acclimatized" poorly on the road to "following local customs."

For example, in dealing with the government, "If the government tells Kelly, 'Because our officials are on a business trip, this matter cannot be handled without their signature,' she would think, 'Why not send it via email or fax? With so many communication methods, why can't it be handled from elsewhere?'" said Li Han, a former secretary to Zong Fuli. She is also not enthusiastic about social occasions and rarely has private interactions with peers from other entrepreneur families.

This is in stark contrast to Zong Qinghou, who came from a state-owned enterprise management background and is well-versed in "Selected Works of Mao Zedong." Whether it was transforming Wahaha from a wholly state-owned enterprise to nearly privatized, or dealing with the multi-year "Wahaha-Danone dispute" and eventually reaching a settlement, Zong Qinghou enjoys dealing with governments at all levels and handles it with ease and skill.

On the other hand, **for Zong Qinghou, now may not be a good time to retire.**

In its heyday in 2013, Wahaha achieved revenue of 78.3 billion yuan, and Zong Qinghou himself became China's richest person. But since then, Wahaha has been declining year after year, and by 2017, it had slipped to the 50 billion yuan mark.

In recent years, Wahaha has attempted a dazzling array of diversification: children's clothing, milk powder, shopping malls, liquor... all of which have quietly faded. In the main beverage business, after children's nutritional liquid, AD calcium milk, and Nutrition Express, there have been no more hit products. The question "Wahaha is outdated" has been raised constantly.

Industry insiders believe that "Wahaha lacks innovation and fails to meet the needs of the current mainstream consumer group. Some also think the deeper reason lies in Zong Qinghou's autocratic management model, which failed to establish a complete talent echelon, and the market dimension overly relies on traditional sales channels."

But this "old stubborn" is trying to make changes for Wahaha. Wahaha, which previously had no deputy general managers, promoted three deputy general managers in January 2016. "In the past two years, we have also been trying to implement tiered authorization, job responsibility systems, and process transformation to stimulate the potential and sense of ownership of every Wahaha employee," Zong Qinghou said at Wahaha's 30th anniversary celebration in 2017.

**Time for the "Princess" to Gain Experience Is Running Out**

At the end of 2018, Zong Fuli finally entered Wahaha Group, serving as the head of the Brand and Public Relations Department, responsible for Wahaha product packaging and brand promotion. External evaluation: "At least Wahaha's brand work has entered Zong Fuli's time, and there are expectations that this 'princess' will change Wahaha."

After returning from the United States, Zong Fuli managed production bases, children's clothing, and daily chemical products within Wahaha, covering almost all management aspects, but she never directly intervened in domestic beverage sales. In 2007, Zong Qinghou set up Hangzhou Hongsheng Beverage Group under Wahaha for his daughter to practice. In 2010, he appointed her as the general manager of the newly established import and export company, managing all import and export business of the group.

"I hope to do something for the Wahaha brand, whether it's in my father's hands, my hands, or a professional manager's hands. I hope the brand becomes more international, diversified, and further professionalized, growing upstream and downstream around the main business."

However, after studying abroad for eight years, differences in business philosophy are an unavoidable "knot" between Zong Fuli and her father, Zong Qinghou, an old-generation private entrepreneur. Zong Fuli has also always placed great emphasis on shaping her personal brand, hoping to break free from her identity as "Zong Qinghou's daughter."

Zong Fuli has tried hard to change Wahaha's product aging problem.

For example, in 2016, Zong Fuli led the launch of a customized fruit and vegetable juice brand named after herself, "Kellyone." At that time, she told the media that she planned to invest several million yuan in this product, recruit talent, and even built a 400-square-meter central kitchen.

The launch of this high-end private custom beverage also showed a business style vastly different from her father's. Compared to Wahaha's "people-friendly beverage" route, Kellyone took the high-end, trendy, Internet+ route. KellyOne's pilot was placed in first-tier cities, with a shelf life of only 7 days and a price as high as 28-48 yuan.

However, this product led by Zong Fuli ultimately seemed to have no visible results. Wahaha officially has hardly done any promotion, and KellyOne's visibility is minimal, only seen in small areas in Shanghai and Hangzhou. When media asked Hongsheng PR about KellyOne's sales performance, the answer was "not convenient to disclose."

Zong Fuli has also sought opportunities in the capital market. In May 2017, Hong Kong-listed China Candy announced that Zong Fuli planned to spend HK$573 million to buy the listed company China Candy. After that, China Candy's stock price soared. However, three months later, the acquisition offer lapsed, and the stock price fell sharply. Zong Fuli's first battle in the capital market ultimately ended in failure, making her the Wahaha princess who failed to "eat candy."

Zhou Jiuming, a veteran sent to "assist" Zong Fuli, commented on her: "She is also anxious. No matter how well she does at Hongsheng, everyone still thinks she is a small umbrella protected under a big umbrella."

**Over the years, Zong Fuli has been on the road to proving herself, but how much time is left for her to gain experience?**

As for succession, Zong Fuli seems somewhat "rebellious" and even not very interested. "For me, I don't want to be a successor. Why must I inherit? I don't want to inherit a company, but I can own it. If I succeed, I hope to acquire Wahaha. That is ownership, not inheritance, right?"

On November 18, 2017, at Wahaha's 30th anniversary celebration, Zong Qinghou, then 72, changed his long-standing attitude of "never go public, Wahaha doesn't lack money," saying: "Going public can accelerate enterprise development, and at an appropriate time, Wahaha will also consider going public."

External analysis suggests two main reasons for Wahaha's sudden intention to go public: "First, the company is facing unfavorable circumstances with declining performance, and needs to boost confidence through listing; second, family business succession is not easy, and it is necessary to reform the management model through listing to avoid corporate turmoil."

**Perhaps for Zong Qinghou now, compared to "continuing his dream of building Wahaha into a century-old brand," who becomes the "dream continuer" has become less important.**

But before stepping back from the front line, he still needs to complete a series of projects for the beverage empire Wahaha, "from products to channels to successors and company structure."

Today, Zong Qinghou remains hardworking. "Every night around 9 o'clock, after Zong Qinghou ends his meetings and trips, his secretary or local subordinates will print out the report documents downloaded from the system and place them in front of him. With a cup of tea, a pack of cigarettes, and a pen, he will process all the day's documents, either signing approval, sending them back, or picking up his phone to call back and ask for details. This work usually lasts until 11 o'clock or early morning, and then the secretary scans and uploads them back to the system. The next morning, staff from various departments of Wahaha can start work according to the boss's instructions."

Source: Entrepreneur Bang, please contact for authorization (WeChat ID: Mrbang_cyzone)

Tips will be paid 400-2000 yuan once adopted.

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