Click to read the original article for details On January 7, Nongfu Spring's stock closed at HK$65.2 per share, with a total market value of HK$733.3 billion; Wantai Biological's stock closed at HK$246 per share, with a total market value of HK$106.6 billion. Based on Zhong Shanshan's 84.41% stake in Nongfu Spring and 83% stake in Wantai Biological, his personal wealth on January 7 was $91.26 billion. On January 5, Zhong Shanshan ranked sixth on the global rich list with a net worth of $91.7 billion. He has long since overtaken Ma Yun and Ma Huateng, firmly holding the position of "Asia's richest person." Truly, fortunes change over time. Who would have thought that the one to take the "richest" title from the internet giants would be a water seller! And not selling "aristocratic water," but "nature's porter." Notably, Zhong Shanshan is very low-key, doesn't play the social circle, and is not a member of the China Entrepreneur Club, which was initiated by 31 of China's most influential business leaders, economists, and diplomats. Zhong Shanshan Zhong the Richest is a disruption to Chinese business, and even an outlier. However, this reflects a qualitative change in China's economic structure: supporting the real economy, revitalizing the country through industry, and serving people's livelihoods. Today, let's explore with the leading dairy new media "Shiwu" (Food Gnosis): What inspirations can Nongfu Spring and Zhong Shanshan's success bring to China's dairy industry? Nongfu Spring owns ten premium water source sites in China, which are resources and barriers to entry. Inspiration for China's dairy industry: Control high-quality large-scale pastures; whoever has milk sources wins. Let's look at Nongfu Spring's ten water sources and their distribution: At first glance: evenly distributed! These ten premium water sources can cover the Northeast, North China, East China, Central China, South China, Northwest, and Southwest markets. The layout is extremely reasonable. It is likely that Nongfu Spring conducted thorough research and planning before selecting the water sources. Logistics and transportation are the biggest costs for water companies; a scientific layout of water sources helps companies reduce costs and increase efficiency. Now, look at these ten water sources: Qiandao Lake, Emei Mountain, Wuling Mountain, Taibai Mountain, Tianshan, Wuling Mountain, Wanlv Lake... They sound naturally pure. Notably, these are rare resources, and not everyone can apply for development qualifications. This is the threshold and barrier. Water sources are similar to milk sources in the dairy industry. In the era of pure milk and room-temperature yogurt, both domestic and overseas milk sources could support production capacity, but in the era of low-temperature dairy products, local milk sources become a necessity. Milk sources are not like water sources; it's unlikely to raise cattle around scenic spots with green mountains and clear waters, and environmental protection departments would not approve. Moreover, milk sources must match factories and markets, so they can only be concentrated and scaled. This is why domestic milk sources rarely play the "green" or "organic" card. Furthermore, water sources directly determine water quality, while milk source conditions do not fully determine milk quality; forage and pasture management are relatively more important. Nevertheless, Nongfu Spring's water source layout strategy still offers some inspiration to China's dairy industry: as low-temperature fresh milk and low-temperature yogurt gradually heat up, high-quality local milk sources will inevitably become scarce resources in the industry. Let's count: there are only a few large-scale pasture enterprises in China, which is also why Yili and Mengniu acted decisively and quickly. With Modern Farming, Saikexing, Shengmu, and Zhongdi all having found their owners, the spring for medium-sized pastures is coming. As dairy giants expand their low-temperature fresh milk nationwide, their demand for high-quality milk sources nationwide will increase. Therefore, in the next three to five years, raising cattle and building pastures in important locations in the central and eastern regions is expected to be favored by dairy giants. Nongfu Spring's mid-to-low-end product structure defeated domestic water aristocrats like Baisuishan and 5100. Inspiration for China's dairy industry: Market share is important. Nongfu Spring has always focused on the 1-2 yuan price range, starting at just over 1 yuan, and later, without much price adjustment, it remains within 2 yuan now. Affordable for everyone, its market share is astonishingly large. According to a Frost & Sullivan report, from 2012 to 2019, Nongfu Spring maintained the top market share in China's packaged drinking water market for eight consecutive years. Baisuishan, which emphasizes "aristocratic water," has advertisements with artistic flair, but it hasn't risen abruptly. So, product positioning is crucial. It's not that Baisuishan's positioning is wrong, but that Nongfu Spring's chosen price range is more conducive to growing bigger and stronger. When Baisuishan realized the pricing issue, it was too late. It had to sell at 3 yuan. 3 yuan is 50% more expensive than 2 yuan, which is the core of the problem. This lesson for the dairy industry is more reflected in the milk powder sector. Feihe's market share in 2020 was 18%, and Junlebao's was 11%. Although these figures are self-reported or from third-party research, and we won't dwell on their accuracy, we can see that both Feihe and Junlebao value "market share." Setting prices too high narrows the consumer base; setting prices too low narrows profit margins. This is the similarity and difference between the dairy and drinking water industries. The only solution is for milk powder companies to build a comprehensive product matrix, with high-end products for profit and mid-to-low-end products to expand market share. High-end products target first- and second-tier cities, while mid-to-low-end products target third- and fourth-tier cities and below. Nongfu Spring's success is a victory for the real economy and serves people's livelihoods. Inspiration for China's dairy industry: Seize the policy window and strengthen the people's livelihood industry. The antitrust action against internet finance is a major signal: the state encourages and supports the development of the real economy. Thus, Nongfu Spring has ushered in the best development opportunity in history. It's a matter of timing, location, and harmony. If Zhong Shanshan were to give a speech in Shanghai, he would probably be more pragmatic than Ma Yun, and the first thing he would thank would be our great motherland. The ten milk sources Nongfu Spring has laid out are not Zhong Shanshan's own resources. This Chinese richest man pays taxes to local governments every day, solves local employment every day, and contributes to "rural revitalization" every day. Nongfu Spring Zhejiang Jiande Meiping Factory Nongfu Spring Guizhou Wuling Mountain Factory Those who win the people's hearts win the world. Nongfu Spring's Baidu Baike entry emphasizes that Nongfu Spring is a "national enterprise." Anyone with a bit of political sense should see this clearly: Nongfu Spring's success is in line with the national policy direction of supporting the real economy and supporting people's livelihood industries. From this perspective, the dairy industry and the drinking water industry in which Nongfu Spring operates are both real economy and people's livelihood industries. In the past, dairy giants overemphasized "internationalization," benefiting foreign dairy farmers; from now on, we hope Chinese dairy entrepreneurs will raise their political awareness and contribute to the local economy and rural revitalization. Source: Shiwu (ID: food-gnosis), Author: Zhang Zhiwei Important Conference Announcement! 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