---
title: "The New Battle of Two Water-Selling Billionaires"
description: "Two Chinese billionaires who have achieved financial freedom are entering the private equity arena, reigniting their rivalry. Zong Qinghou, founder of Wahaha, and Zhong Shanshan, founder of Nongfu Spring, have both recently established private equity firms, marking a new chapter in their long-standing competition."
author: "吕鑫燚"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2021-10-13"
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# The New Battle of Two Water-Selling Billionaires

> Two Chinese billionaires who have achieved financial freedom are entering the private equity arena, reigniting their rivalry. Zong Qinghou, founder of Wahaha, and Zhong Shanshan, founder of Nongfu Spring, have both recently established private equity firms, marking a new chapter in their long-standing competition.

**Why are the two billionaires who have achieved financial freedom once again "locking horns"?**
In 2021, the private equity circle welcomed two Chinese billionaires.
In July, Zong Qinghou, the 75-year-old founder of Wahaha, obtained fund qualification. Just as the public was praising his ambition in old age, two months later, his old rival Zhong Shanshan of Nongfu Spring also made a high-profile entry into private equity.
Zong Qinghou, with a net worth of 86 billion yuan, and Zhong Shanshan, with a net worth of 400 billion yuan, are once again sitting at the same table. This time, they are not selling water or fighting over supermarket freezers, but targeting private equity to expand their business empires. With the simultaneous entry of these two billionaires, the private equity circle has also welcomed its "most expensive" insiders.
According to the official website of the Asset Management Association of China, "Guanzi Private Equity Fund Management (Hangzhou) Co., Ltd." has recently completed its registration.
This private equity firm is wholly owned by Yangshengtang Co., Ltd., and its actual controller is Zhong Shanshan, the current richest person in China, aged 67 with a net worth of 400 billion yuan.
Shortly before this, Zong Qinghou, the 75-year-old founder of Wahaha, personally obtained fund qualification in July 2021 and serves as the legal representative of Wahaha Venture Capital Co., Ltd.
(Source: Tianyancha)
Why are the two billionaires who have achieved financial freedom once again "locking horns"?
As of the end of August this year, the private equity management scale reached 19.05 trillion yuan, compared to 16 trillion yuan at the end of last year. The management scale continues to grow, and the market remains hot.
With the rapid growth of private equity funds, big names have also begun to enter the market. This entry into private equity is not just a battle between the two billionaires, but also a new field of competition for the two industry oligarchs.
Looking back, the lives of Zhong Shanshan and Zong Qinghou have many intersections. Both from Zhejiang, Zong and Zhong had deep connections in their early entrepreneurial days, both made their fortunes by "selling water," and both have topped the list of China's richest people. Now they meet again in the private equity field. What sparks will this "meeting" ignite?
## **The Intertwined Lives of Two Billionaires**
In 2020, when Nongfu Spring went public, Zhong Shanshan became the richest person in China. Zong Qinghou had also "sat" in this position as early as 2010. But their connections go far beyond this, dating back to 1988.
In 1988, after resigning from Zhejiang Daily, Zhong Shanshan went south to start his own business.
At that time, Zong Qinghou had already entered the children's oral liquid market, creating China's first children's nutritional liquid and advertising it with the slogan, "Drink Wahaha, eat with a good appetite."
Due to the market gap, Wahaha oral liquid sales exceeded 100 million yuan within three years of its launch, laying a solid foundation for the future growth of the Wahaha Group.
Zhong Shanshan was introduced to Zong Qinghou through friends who provided resources. The two fellow Zhejiang natives met and reached a cooperation agreement, with Zong giving Zhong the agency rights for Wahaha oral liquid in Hainan and Guangxi.
At that time, Hainan, as a newly developed special economic zone, was thriving, and Wahaha also offered lower preferential agency prices to Hainan agents.
As the largest agent in Hainan and Guangxi, Zhong Shanshan saw an opportunity. He sold the lower-priced Hainan agency products to the then most popular Guangdong market, profiting from the price difference.
But this did not last long. When Zong Qinghou learned of this, he revoked Zhong's agency rights. At that time, Zong did not anticipate that the dismissed agent would become his biggest competitor in the future.
It was this experience in selling health products as an agent that made Zhong Shanshan see the business opportunities in health products.
Immediately after, with his keen business sense, Zhong founded Yangshengtang Company, focusing on turtle and soft-shelled turtle pills. While Wahaha oral liquid targeted children, Zhong targeted middle-aged consumers with the advertisement, "The kindness of nurturing is hard to repay; Yangshengtang turtle pills."
While Zhong Shanshan was thriving in the health products industry, Zong Qinghou withdrew from the industry in 1992, exiting the health products market to produce AD calcium milk and mineral water.
Subsequently, Zhong Shanshan also temporarily left health products and established Yangshengtang Drinking Water Company. But by then, Wahaha had already secured a place in the drinking water market with its purified water.
In 1996, Nongfu Spring was launched, focusing on mineral water rather than purified water, and introduced the still memorable advertisement: "We don't produce water; we are just nature's porters."
When promoting mineral water, Zhong Shanshan publicly stated at a press conference that long-term consumption of purified water is not beneficial to health.
This statement reignited the conflict between Zhong and Zong. Wahaha, along with more than sixty other companies, sued Yangshengtang for "unfair competition." But by then, Zhong was a mature businessman, no longer just an agent. He counter-sued Wahaha for "maliciously attacking competitors."
The case ended with Nongfu Spring losing the lawsuit. However, although Zhong lost the case, he won the market, as the concept of mineral water being better had taken root in people's minds.
But their business interactions were not all disputes. In 2009, when Nongfu Spring was embroiled in the "arsenic gate" incident, old rival Zong Qinghou put aside past grievances and publicly voiced support. The incident ended with the industrial and commercial authorities admitting their mistake.
In the following decade or so, Nongfu Spring and Wahaha each demonstrated their strengths in the market, and Zong Qinghou and Zhong Shanshan successively topped the list of China's richest people.
**Exploration in the Investment Field**
At 75, Zong Qinghou obtained the fund qualification certificate, which can be seen as personally entering the investment field. However, before this personal involvement, Wahaha had already made significant strides in the venture capital field. Zong's previous investment style can also provide clues to his future private equity approach.
In 2010, when the ChiNext board was launched, VC firms flocked in.
It was also at this time that Zong Qinghou stepped down from his positions as chairman and general manager of the Wahaha Group, turning to investment.
In November of the same year, Wahaha Venture Capital was established, jointly funded by Wahaha Hongzhen Investment Co., Ltd. and Shi Youzhen. The former is 100% controlled by Zong Qinghou, and the latter is his wife. At its establishment, Zong publicly stated his intention to promote the spirit of "the rich helping the poor."
(Source: Tianyancha)
After its establishment, Wahaha Venture Capital mostly appeared as an LP. According to public information, Wahaha has invested in multiple venture capital institutions and has become an LP for Hillhouse Capital, Fengchuan Capital, and others. Over more than a decade, it has made six public external investments, mainly in Hangzhou, Hubei, and other places.
In addition to Wahaha Venture Capital, Hongzhen Investment, 100% held by Zong Qinghou, shows a trend of "cross-border" investment.
Through equity penetration of Hongzhen Investment, it can be seen that Hongzhen Investment is currently the fourth largest shareholder of Zhejiang Hongtu Venture Capital, and Zong Qinghou himself serves as vice chairman of Zhejiang Hongtu. This investment institution prefers technology tracks such as artificial intelligence and semiconductors, having invested in projects like ShenDi Semiconductor and Ailv Health.
Compared to his old rival Zong Qinghou's frequent investments, Zhong Shanshan has made fewer moves in investment.
When mentioning Zhong Shanshan's investment cases, Wantai Biological is always unavoidable.
Zhong Shanshan has a unique vision. In 2001, when Wantai Biological's operations encountered problems, he acquired 95% of Wantai Biological's shares for 17.1 million yuan. This pharmaceutical company has profited handsomely from producing in vitro diagnostic reagents and vaccines.
Wantai Biological launched China's first self-developed HPV vaccine. Such vaccines are in short supply, with many women waiting up to a year for imported vaccines.
The domestic vaccine launched by Wantai Biological not only increased market supply but also had a much lower price than imported vaccines. In addition, during the early stages of the pandemic, when COVID-19 test kits were in short supply, Wantai Biological quickly launched three kits to address the market situation and was included in the WHO Emergency Use Listing.
After Wantai Biological went public in April last year, it achieved 26 consecutive limit-up days, with a market value exceeding 140 billion yuan at its peak. Wantai Biological's excellent performance in the capital market has also become one of Zhong Shanshan's best assets.
Directly holding 95% of Wantai Biological's shares shows Zhong Shanshan's aggressiveness and absolute confidence in the investment field. Apart from investing in Wantai Biological, Zhong has invested in several medical projects through Yangshengtang as the main entity, but none have replicated the success of Wantai Biological.
**Why the High-Profile Entry into Private Equity?**
Why are these two, who are in their sixties and seventies and have achieved financial freedom, entering private equity at this time?
Zong Qinghou is someone who does everything himself, and this time he is personally entering private equity. But behind his personal involvement lies Wahaha's anxiety.
Not being young enough is Wahaha's biggest anxiety.
Zong Qinghou has also said that perhaps the post-00s generation doesn't recognize the Wahaha brand. Although Wahaha is still a strong beverage brand in the market, it has fallen behind too much.
First, it was late in e-commerce. Initially, Zong, who started with manufacturing, did not believe in e-commerce, giving other brands the opportunity to increase sales. Naturally, Wahaha's performance no longer maintained good growth.
This can be seen from the annual ranking of the top 500 private enterprises. Although Wahaha, with annual revenue of around 40 billion yuan, is still on the list, it is far from the nearly 80 billion yuan annual revenue in 2013 before the e-commerce boom.
Zong Qinghou was slow to realize this and only began to vigorously develop e-commerce last year.
However, by then, the new consumer market trend had changed. Genki Forest took the lead, and other beverage brands started making sparkling water.
Subsequently, Wahaha began product innovation, making sparkling water and sugar-free products. It also opened Wahaha milk tea shops offline, but social media reviews of these shops are not high, with most consumers visiting out of nostalgia for AD calcium milk from their childhood.
Zong Qinghou, who started with manufacturing, is not "playing with empty promises" by entering private equity this time.
Through Wahaha Venture Capital, it can be seen that Zong and Wahaha prefer the technology field.
Technology is also the cornerstone of current economic development. Zong Qinghou, who built the Wahaha Group with his own efforts, is also continuously transforming towards the technology industry, having upgraded factories multiple times and used technology to empower the supply chain. Perhaps investing in technology can help Wahaha create another "Wahaha."
But previously, Wahaha Venture Capital mostly appeared as an LP. After Zong personally enters, it may develop from an LP to a VC, from indirect to direct shareholding, fully realizing his stated spirit of "the rich helping the poor."
On the other side, Zhong Shanshan has also personally taken charge and invited financial experts to assist, establishing Guanzi Private Equity.
From the perspective of Guanzi Private Equity Fund Management (Hangzhou) Co., Ltd., whose actual controller is Zhong Shanshan, its registered capital is 30 million yuan.
The general manager of the company is Chen Bin. According to public information, Chen Bin has over 20 years of financial experience, having worked at institutions such as China Southern Securities and CICC. He became a managing director at CICC Capital in 2004 and only left CICC in February this year.
A month later, Chen Bin became the general manager of the equity investment department of Yangshengtang Co., Ltd. and also the legal representative and general manager of Guanzi Private Equity.
Given that the major shareholder of Guanzi Private Equity Fund is Yangshengtang Co., Ltd., and Yangshengtang is the company entity of Zhong Shanshan's first venture, focusing on health products and still existing today, combined with his past medical investments, it is not difficult to infer that Zhong Shanshan leans towards the medical field, and Guanzi Private Equity may continue to invest in this track.
However, judging from Zhong Shanshan's investment style, his unique vision and aggressiveness, combined with Chen Bin's industry experience, the two may "generously" empower invested companies.
Analyzing their own industries, both are traditional enterprises with long-term return cycles. On the other hand, Nongfu Spring and Wahaha have already ventured into multiple fields, and expanding into the financial sector when their wings are fully grown is just a natural move.
The two billionaires have not been constrained by age and still choose to personally lead the charge to expand new territories. In them, we see the spirit of entrepreneurs who never give up, dare to take risks, strive bravely, and are always on the road.
**Are you "watching" me?**


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