Click to read the original article for details. At 160 Qingtai Street, Hangzhou, stands the headquarters of Wahaha. This gray six-story building exudes the vicissitudes of time and weather, and has witnessed the wealth myth created by a school-run enterprise, as well as the distance between two generations behind that myth. In just over three months, Zong Qinghou will turn 74, long past the age for a comfortable retirement. News that he is preparing to step back from the front lines has recently surfaced again, but the Wahaha Group promptly denied it. The former richest man in China remains the "most diligent person" in this low, old building, arriving at work before 7 a.m. and leaving after 11 p.m., working over 16 hours a day. He has done this every day for decades, sometimes even sleeping in his office. ▵ Zong Qinghou His daughter Zong Fuli's childhood was also shaped by this building. After school, she would carry her backpack to the Wahaha cafeteria for meals and do homework in the general manager's office, which was also her home. The uncles and aunts in the office watched her grow up, but she rarely saw the office's owner, Zong Qinghou. In 1996, Zong Fuli began her studies abroad and only returned from the United States in 2004. After that, Wahaha's Xiaoshan No. 2 Base became her first training ground. In 2010, she became the president of Hongsheng Beverage Group, which handles Wahaha's contract manufacturing business. Hongsheng Beverage is located in Xiaoshan District and is independent of Wahaha; here, Zong Fuli has the final say. She doesn't need to go to Wahaha's headquarters in Shangcheng District to report to her father; if she occasionally goes there, it's to "seek advice" from Zong Qinghou, who better understands the Chinese market. The distance from Hongsheng Beverage to Wahaha seems to mirror the distance between father and daughter. In the eyes of outsiders, this is also the distance from being Wahaha's "princess" to becoming its successor. At one end of this distance is an experienced, pragmatic local entrepreneur who better understands Chinese social nuances; at the other is an academically trained product of Western business schools who values efficiency and systems and wants to prove herself. Between them lie dominance, conflict, and cold wars, but time has also allowed them to adjust to each other. In October 2018, Zong Fuli became the head of Wahaha Group's Brand and Public Relations Department. This distance seemed to narrow. Who is the "biological child"? As a father, Zong Qinghou was absent. Or rather, he wasn't a good father. After 15 years of farm life in Zhoushan and Shaoxing, Zong Qinghou returned to the city in the winter of 1978 at the age of 33, already considered an older single. Shi Youzhen, also an older single, had returned to Hangzhou slightly earlier after spending her youth in a remote rural area. Introduced by others, the two, who shared many similar experiences and common topics, came together. They readapted to city life, though it wasn't as rosy as expected, but the birth of their daughter brought precious joy to the family. In January 1982, Zong Fuli was born, her name derived from the homophones for "fortune" and "benefit." The birth of Wahaha was, to some extent, also related to Zong Fuli. At that time, a report in the Hangzhou Daily stated that one-third of the country's 350 million children were malnourished, and in Zhejiang alone, 47% of children aged 8-12 were malnourished. At the time, nutritional liquids existed domestically, but they were all adult products. Zong Qinghou, who was already processing Chinese pollen oral liquid for "China Baoling," sensed a new business opportunity. What directly stimulated him was his daughter. Like many children, five- or six-year-old Zong Fuli didn't like to eat and had mild anorexia. Feeding her every day became the family's biggest pressure. In October 1988, the first batch of Wahaha Children's Nutritional Liquid came off the production line, and Zong Qinghou was so moved that tears streamed down his face. The myth of a school-run enterprise turning into a beverage empire also began at 160 Qingtai Street. However, for Zong Fuli, it was hard to feel her father's love during her childhood; even normal father-daughter time became a luxury. The popularity of Wahaha Children's Nutritional Liquid far exceeded Zong Qinghou's expectations. Production bases expanded continuously, with the first phase producing 120,000 boxes per day and the second phase reaching 250,000 boxes per day. Within three years, production capacity expanded 60-fold, and profits soared 100-fold. By 1990, Wahaha's sales exceeded 98 million yuan. Products spread across the country, yet supply still couldn't meet demand. Calls and letters urging delivery poured in, and trucks waiting to pick up goods lined up on Qingtai Street, blocking the company entrance. Zong Qinghou's office was crowded with people holding slips waiting for wholesale goods, many carrying snake bags stuffed with cash. Zong Qinghou was extremely busy, expanding production lines, managing production, and running the market, pouring almost all his time and energy into Wahaha. He spent most of the year traveling, which made Zong Fuli feel her father was "strange." What Zong Fuli remembered about her father was "busy, busy, busy": Dad always had endless things to do. Old Wahaha employees still recall that Zong Qinghou and Shi Youzhen had no time to pick up their daughter from kindergarten; she would be left alone at school, crying loudly, and they felt sorry for her. Later, in elementary school, Zong Fuli would carry her backpack to Wahaha's cafeteria for meals and do homework at the general manager's desk, asking the uncles and aunts in the office for help with questions she didn't understand. Zong Qinghou simply moved the family into a dormitory on the second floor of Wahaha's headquarters, where Zong Fuli spent her childhood, growing up alongside Wahaha. Zong Fuli is five years older than Wahaha, and she calls Wahaha her "little sister." However, for these two "daughters," outsiders find it hard to distinguish who is the "biological child," because Zong Qinghou gave almost all his love to Wahaha, leaving Zong Fuli as the "unattended" one, with almost no quality time with her father. The "contest" between father and daughter Zong Fuli felt a familiar strangeness toward her father, and Zong Qinghou, in turn, felt self-reproach and guilt toward his daughter. Over time, this imbalance turned into a "contest" between father and daughter. Zong Fuli may have inherited Zong Qinghou's assertiveness and independence, or perhaps it was a character forged by her "unattended" childhood. In 1996, at Zong Fuli's strong insistence, Zong Qinghou and Shi Youzhen decided to send her to study in the United States. At that time, she was only in the second year of junior high. Zong Qinghou hesitated; after all, his daughter was just a teenager, and he couldn't help but worry about her going abroad alone. Zong Fuli felt differently. More than a decade later, recalling this experience, she said, "I wanted to study abroad, and when I made that decision, I accepted all its consequences. This experience taught me a lot, including independence and knowing what I want..." ▵ Zong Fuli San Marino High School in Los Angeles is a fully boarding school with a rigorous ethos. Zong Fuli completed her secondary education there and then attended Pepperdine University, majoring in international trade. Later, when asked by the media whether studying this subject was preparation for joining Wahaha, Zong Fuli denied it, explaining only that it was a popular major at the time. During her studies in the U.S., the increasingly busy Zong Qinghou never made a special trip to visit his daughter. By then, Wahaha had export business, and Zong Qinghou only took the opportunity of business trips to the U.S. to see her. At first, he visited once or twice a year, but later he stopped going. In March 2005, less than a year after returning to China, 23-year-old Zong Fuli became deputy director of the management committee of Wahaha's Xiaoshan No. 2 Base, and later also served as general manager of Hangzhou Wahaha Children's Clothing Co., Ltd. and Hangzhou Wahaha Kaqianna Daily Chemical Co., Ltd. The Xiaoshan No. 2 Base she managed had six subsidiaries in beverages, convenience foods, children's clothing, and daily chemicals. When she first returned, Zong Fuli was more like an American child, in both thinking and behavior. Generational gaps, culture, and personality all became points of conflict between father and daughter. Even meals showed stark differences. "When the post-80s daughter stands beside her 40s father, breakfast itself is a Sino-Western difference: the father eats flatbread and fried dough sticks, while the daughter eats bread and milk," as described in a report by China Entrepreneur. The bigger differences, even conflicts, were at work. Zong Qinghou is a "patriarchal" manager. Wahaha has long had no deputy general manager, and for many years, Zong Qinghou held both the chairman and general manager positions. Insiders describe him as "extremely controlling, even somewhat domineering." Zong Fuli is almost completely different. In 2010, Zong Fuli became president of Hongsheng Beverage Group, also overseeing international business. Hongsheng Beverage is independent of Wahaha, handling Wahaha's contract manufacturing, with 16 production bases and 44 subsidiaries. In short, the business under Zong Fuli contributes about one-third of Wahaha's revenue. While the father is "domineering," the daughter is "democratic." At Wahaha, old employees privately call Zong Fuli "princess" or "young miss," but at her own company, she asks employees to call her Kelly or Fuli, and she doesn't print titles on business cards. However, when disagreements arise with subordinates, she still has the final say. At her own company, she has 100% decision-making power. But if she disagrees with Zong Qinghou and he overrules her "autocratically," she might sulk and initiate a two- or three-day "cold war." At such times, both father and daughter are as hard as stone. The father once intended to send his "old loyalists" to "assist" his daughter, but the daughter dismissed them for poor performance. In the end, a helpless Zong Qinghou took them back. Zong Qinghou never actively fires employees, let alone "old loyalists" he has cultivated for years. Zong Fuli thinks her father's "old loyalists" are good and loyal but too dependent on Zong Qinghou's ideas. She prefers to cultivate her own talent, hoping her people are innovative, passionate, and have their own ideas, able to learn and discover new things with her. The "old loyalists" also feel the difference between father and daughter: "The big boss discusses things with us, but the young boss is more direct; once she decides, that's it, with little explanation." Once, an employee in the import-export company managed by Zong Fuli accepted a bribe from a supplier. Since the contract explicitly prohibited bribery, Zong Fuli saw no room for negotiation and terminated the contract. However, the supplier approached Zong Qinghou, and the business later resumed. Zong Fuli felt her father's approach was wrong; it was a bottom line that shouldn't be compromised. In management style, the father and daughter often "contest." Zong Qinghou once said Wahaha doesn't lack money and will never go public, but in Zong Fuli's eyes, getting close to the capital market is not a bad thing: "Wahaha going public is a very normal move." The "second most diligent person" Zong Qinghou is strong-willed, but Zong Fuli seems even more so. Once, Zong Qinghou and Zong Fuli appeared together on CCTV's "Gaopeng Manzuo" program, sitting face to face. The host asked: If an employee makes a big mistake, what would you do? Zong Qinghou said: I would definitely criticize severely, but I would let him correct the mistake. Zong Fuli replied: I would follow the system; whatever punishment the system prescribes for the mistake, that's what I'd do. If it were right after she returned to China, Zong Fuli would have stopped there. But this time, she added: "Sometimes I don't do well enough, and I hope to learn from my father and be more tolerant." Zong Fuli is indeed changing. In 2012, Zong Fuli became the first post-80s entrepreneur to receive the "Fengyun Zheshang" honor. At the award ceremony, after receiving the trophy, the host asked: "Is your father your idol?" Zong Fuli replied: "Yes and no. My father has many things worth learning from, but I think I should surpass him." ▵ Zong Fuli and her father jointly attended the 2016 "Fengyun Zheshang" award ceremony The camera turned to the audience, and Zong Qinghou showed a smile tinged with embarrassment. This kind of smile seems to appear mostly when his daughter talks about him. He should also feel some comfort, because his daughter is truly moving closer to him, not just in words. Previously, Zong Fuli was more inclined to live life and do what she liked, feeling the company was too much pressure. But now, in public appearances, she talks more about the enterprise, responsibility, and the industry. At a recent Zheshang conference, Zong Fuli said: "An excellent enterprise has two legs: the left leg is product, the right leg is brand. The strength of the two legs determines how far the enterprise can go, and their coordination determines how steadily it can walk." She sounds like a mature Chinese entrepreneur. Zong Fuli is gradually adjusting herself, beginning to understand some of her father's concepts and practices. Zong Qinghou advocates a "family culture," building a "harmonious family" corporate culture at Wahaha. He allocates housing to employees, eats with them, celebrates holidays together, and even helps with their children's schooling. Every year, Zong Qinghou invites employees who stay behind for the Spring Festival to a New Year's Eve dinner and gives them red envelopes; this year marks the 32nd year. Zong Fuli gradually came to accept Wahaha's "family culture," but her ten years in the U.S. brought back "foreign festivals." On Christmas 2012, Zong Fuli, wearing antlers, bustled around the cafeteria at the Xiaoshan base, hosting a Christmas lunch for employees. She believes that being a boss is just a profession, and such activities allow her to set aside her boss identity and play with employees. This is rare, as she is seldom at the company. When Zong Qinghou is at Wahaha headquarters, he works over 16 hours a day; if not at headquarters, he's basically doing frontline market research. He spends an average of 200 days a year on the market frontline, which is key to Wahaha's transformation from a school-run enterprise to a beverage empire. Zong Fuli also frequently travels on business and is rarely at the company. Even when at the company, like her father, she arrives early but leaves late, often working into the night. The difference is that one is at Wahaha's office in Shangcheng District, the other at Hongsheng Beverage's office in Xiaoshan District. Employees see this effort, and privately they rate her as Wahaha's "second most diligent person." In fact, the adjustment between Zong Fuli and Zong Qinghou is also her adjustment with Wahaha. In 2013, Wahaha's revenue, after years of rapid growth, reached 78.3 billion yuan. Zong Qinghou, already China's richest man, declared that by 2014, Wahaha would achieve the 100 billion yuan target, even creating another Wahaha. But in 2014, revenue fell to 72 billion yuan and kept declining, reaching only 46.5 billion yuan by 2017, a 40% drop over four years. Wahaha has often been criticized in recent years for brand aging, lack of innovation, and failure to upgrade with consumption trends. In April 2017, at an internet summit, Zong Qinghou shared the stage with Ma Huateng. The host, Wu Xiaobo, asked Zong Qinghou: If Ma Huateng's daughter had a birthday and he wanted to order 10 boxes of Nutri-Express with a blessing from Ma Huateng printed on the bottles, could Wahaha do that in the future? The implication was whether traditional manufacturing could offer personalized customization services through the internet. But Zong Qinghou replied helplessly: "A company as large as ours can't do personal customization. I open a production line and tens of thousands of bottles come out. If you say one or two boxes for personal customization, how can I do that for you?" In fact, Zong Qinghou had a better answer available: "My daughter can do that now." In July 2016, Zong Fuli launched the customized beverage brand KellyOne, where various ingredients can be freely combined according to personal preference, and consumers can name their own drink combinations, completely different from Zong Qinghou's approach. However, this brand is named after Zong Fuli's English name and has always kept a distance from Wahaha. In Zong Fuli's vision, she wants to acquire Wahaha, not inherit it. Wahaha - Zong Qinghou + Zong Fuli = ? On the morning of September 13, 2013, Zong Qinghou was on his way from his residence to Wahaha when he was attacked near his home. Zong Qinghou has always dressed plainly, often wearing cloth shoes, earning him the nickname "cloth-shoe richest man." His daughter calls him "earthy" and tells him to wear leather shoes. Of course, being low-key, he never has bodyguards. In this attack, Zong Qinghou injured tendons in two fingers. The attacker, a 49-year-old man from Suzhou named Yang, who had been following him for two months, fled in panic. Some said it was revenge, but Zong Qinghou said he had no enemies and it was just an isolated incident. Yang confessed that he had borrowed 30,000 yuan in the first half of the year to come to Hangzhou to find work but, due to his age, couldn't find a job. Having seen interviews on TV where Zong Qinghou warmly helped migrant workers, he wanted to seek Zong Qinghou's assistance and went to his residence to find him. After this incident, the media once again linked "accident" with "succession." If something happened to Zong Qinghou, what would happen to Wahaha, and who would take over? In Zong Qinghou's view, "succession" has always been a taboo topic. In 2010, after Zong Fuli took charge of Hongsheng Beverage, she used capital to carry out bold reforms and also integrated resources for the import-export business. In Zong Fuli's view, this change gave them a clear division of labor: her father handled domestic business, she handled international business, and they didn't interfere with each other. In Zong Qinghou's view, this was just training for his daughter, not preparation for succession. At that time, Zong Qinghou was already 65. Facing external doubts, he said he could still work for another 20 years. On the 2011 "Gaopeng Manzuo" program, Liu Yonghao and his daughter Liu Chang appeared before the Zongs. Liu Yonghao told Liu Chang: "Whether you take over or do what you want, as long as you're happy." When it was Zong Qinghou's turn, he said whether she takes over depends on whether his daughter is happy. Zong Fuli also said she wasn't ready yet. Two years later, 33-year-old Liu Chang officially stepped into the spotlight, succeeding her father Liu Yonghao as chairman of New Hope Liuhe. At that time, Liu Yonghao, six years younger than Zong Qinghou, was only 62. Now, Zong Qinghou is about to turn 74, Wahaha is 32, and Zong Fuli is 37. In Zong Qinghou's mind, perhaps arrangements have already been made. At the 32nd Wahaha New Year's Eve dinner, Zong Qinghou mentioned in his speech that Wahaha achieved growth in 2018 and would strive for over 50% growth in 2019. According to the "2019 Zheshang National Top 500," Wahaha's 2018 revenue was 46.9 billion yuan, indeed achieving growth, but the increase was less than 1%. The harder it is for Wahaha's performance to grow, the harder it is for its helmsman to let go, but age doesn't wait. In October 2018, Zong Fuli was considered one step closer to succession, as she not only helmed Hongsheng Beverage but also directly became head of Wahaha Group's Brand and Public Relations Department. Zong Fuli said she took on the role at a critical moment without waiting long, and that Hongsheng Beverage is already a large and broad platform where she can do what she wants. However, since Wahaha is criticized for brand aging and unoriginal products, "it's time to do something for Wahaha." A month later, Zong Fuli promoted the new limited-edition Nutri-Express on Weibo, and the over-70 Zong Qinghou, in a rare move, reposted the Weibo, tagging his daughter and saying: "Who touched my Nutri-Express?" In the months since Zong Fuli took over as brand and PR head, Wahaha has continuously launched new products: colorful Nutri-Express, nutritional grains, nut drinks, quinoa milk porridge, hotpot herbal tea... upgraded the water brand, and even chartered a subway train for a "outstanding love views" marketing campaign. Zong Fuli is striving to change the stereotype Zong Qinghou has stamped on Wahaha, making it younger. In Zong Fuli's view, hard work is Zong Qinghou's fate. In April, Zong Qinghou said in an interview with Economic Observer: "I think I should be preparing to step back from the front lines." This was interpreted as Zong Qinghou officially announcing his retirement plan. However, Wahaha quickly clarified that Zong Qinghou had no specific retirement plan and no intention to step back. Zong Qinghou is nearly 74, and Zong Fuli still hasn't entered Wahaha's core management. When asked whether Zong Fuli would take over, Zong Qinghou only said: "Let her develop freely; let her do whatever she wants." In the fluctuating distance between father and daughter, and in Zong Qinghou's words, a possibility is being amplified: a management team takes over, with Zong Fuli inheriting only Zong Qinghou's shareholder rights while managing part of the business. This should also be acceptable to Zong Fuli, as she has always emphasized the word "system." On "Gaopeng Manzuo," the host asked Zong Fuli: "What does Wahaha minus Zong Qinghou equal?" Without hesitation, Zong Fuli said: "Zero." The host then asked Zong Qinghou: "What does Wahaha plus Zong Fuli equal?" After thinking, Zong Qinghou said: "Greater glory, I suppose." Zong Fuli's answer had an underlying meaning: "Wahaha = Zong Qinghou." In her view, this is not a good thing; it's the status quo she wants to change. Zong Fuli hopes Wahaha has its own identity, not being equated with the entrepreneur himself. In "Built to Last," it is said that the founders of great companies are usually clock builders, not time tellers. "Building a clock" means establishing a system that enables the enterprise to survive and develop in the market through organizational strength, rather than relying on an individual, a product, or a chance opportunity. Wang Jianlin once expressed something similar in an interview: "When handing over, with assets of over a trillion and revenue of a hundred billion dollars, it's actually the organizational system that makes money, not individual capability. You don't necessarily choose the smartest; you choose the one who can best command respect." Undoubtedly, without Zong Qinghou, there would be no Wahaha, but Zong Qinghou is more like a "time teller," still hands-on at over 70, and Wahaha relies too heavily on him. This is a common trait of first-generation entrepreneurs, and to a large extent, it's also why they can't retire. Wahaha, aspiring to be a century-old brand, needs a "clock builder" more than ever, and perhaps that's what we can expect from Zong Fuli, who has always emphasized systems.