The curtain call of a generation of legends in the business world.
The Chinese business community regrets that a generation of legends has been lost, and Wahaha Group has since lost a founder who is like a needle in the sea.
On February 25, Wahaha officially released an obituary, Comrade Zong Qinghou, founder and chairman of Wahaha Group, died at 10:30 on February 25, 2024 at the age of 79 due to ineffective medical treatment.
Figure Wahaha Group's official website.
The news of Zong Qinghou's death shocked everyone. Many people have posted in social circles to remember this old man who carries the childhood memories of a generation, and many entrepreneurs also remember this business guru. Lei Jun, the founder of Xiaomi, posted a message to mourn Zong Qinghou as a "legend"; Zhou Hongyi, the founder of 360, mourned and said, "I hope that Mr. Zong's spirit can continue to encourage more entrepreneurs in China to work together......".
For the VC circle, it is also the loss of a rich LP forever.
Founded in 2010, Wahaha Venture Capital has been a venture capital institution for many times since 2016, and is the LP of Yaojin Capital (a joint venture between Sinopharm Group and CICC Capital), Hillhouse Capital, Fengchuan Capital and other institutions. At the same time, Zong Qinghou, through his indirect control of Red Earth Venture Capital, backed by well-known investment institutions, has invested in a number of projects including semiconductors, medical devices, automotive electronics and many other fields.
Zong Qinghou, an entrepreneur who only started from scratch at the age of 42 and has been the richest man in China three times, once wrote in his autobiography, "For me, there is only one Wahaha." It's my whole life, all my dreams, all the meanings, all the values, all the labels and the symbols. It is a testament to my existence in this world. ”
This business legend who has been strongly associated with the outside world "Wahaha = Zong Qinghou" has also revealed his attitude of taking a back seat many times in recent years, "I have been consciously preparing to do the best thing, engaging in process transformation, post responsibility system, modifying and improving the rules and regulations, so that every employee knows what he should do, to what extent, what he can't do, what responsibility he should bear, and what remuneration he gets, all of which are ready for the best people." ”
Now, the Si people are gone. The 95 billion wealth owned by Zong Qinghou, who is ranked among the 31st in the "2023 Hurun Report", will be handed over to his only daughter Zong Fuli. In the future, we will wait and see how far Wahaha can go under the leadership of Zong Fuli.
01 "A Generation of Legends" Zong Qinghou.
In the Chinese business world, there are not many super entrepreneurs who are late bloomers. Ren Zhengfei, who started his business at the age of 44, is one, and Zong Qinghou, who is determined to start a business at the age of 42, is another.
Turning over the entrepreneurial history of Wahaha, what catches your eye is actually a story of middle-aged grassroots entrepreneurship.
In 1986, the year before Zong Qinghou decided to start his own business, Zong Qinghou became the manager of the distribution department of the school-run enterprise. In the context of the early stage of reform and opening up, Zong Qinghou witnessed great changes in society. He saw with his own eyes the implementation of the land contract responsibility system and the abolition of various food stamps, oil stamps, and other bills. These changes have had a profound impact on his life and work.
In April 1987, Zong Qinghou made an important decision, he took out all his savings and asked relatives and friends to borrow a large amount of money despite the dissuasion of the people around him, and contracted the distribution department of the school-run enterprise. He relied on the consignment of sodas, popsicles, stationery and paper and other businesses, and earned the first pot of gold in entrepreneurship by cent.
After accumulating his first fortune, he founded Wahaha Food Factory and started his own industrial path. After discovering the business opportunities of children's nutrition solution, the "children's nutrition solution" was immediately developed and launched, and the product was widely praised once it was launched, and the advertising slogan "Drink Wahaha, eat is fragrant" is deeply rooted in the hearts of the people.
After the success of the children's nutrition solution, under the leadership of Zong Qinghou, Wahaha has successively created "national" products such as Wahaha pure water, AD calcium milk, very cola, and nutrition express, and in just a few years, Wahaha has become a leader in the domestic beverage market.
Wahaha, the domestic beverage giant created by Zong Qinghou, has not only stood at the forefront of China's beverage industry, but also become the childhood mark of many people. Zong Qinghou also relied on Wahaha, starting from 2010 when he first appeared on the Hurun Global 100 Rich List as the "richest man" in Chinese mainland, and Zong Qinghou won the list three times in the following four years. In the past decade, although the "richest man" throne has changed back and forth between real estate developers and founders of Internet companies, there is still a place for Zong Qinghou in the business world. According to the latest data from the "2023 Hurun Report", Zong Qinghou ranks 31st with a net worth of 95 billion yuan.
After accumulating huge assets, despite his advanced age, Zong Qinghou, the "soul man" of Wahaha, is still active in the business world.
As early as 2004, when Zong Fuli returned to the family business, there were many voices about Zong Qinghou's retirement. But Zong Qinghou relied on his perseverance year after year to respond to rumors from the outside world, compared with "retirement", Zong Qinghou and Zong Fuli's father and daughter galloped more in the business world in a state of "fighting side by side".
As early as 2011, in a program on CCTV Finance Channel that the father and daughter participated in, the host asked Xiang Zongqinghou, "What is Wahaha plus Zong Fuli?" Zong Qinghou replied, "It is equal to a more powerful Wahaha." The host turned to "What is Wahaha equal to after subtracting Zong Qing?" The question was thrown to Zong Fuli, and Zong Fuli's answer was, "It's equal to zero." ”
Figure Wahaha Group's official website.
In April 2019, Zong Qinghou, then 74, first expressed his retirement plans in public, saying that he was ready to take a back seat. However, he also stressed that it may not be realistic to retire all of them, and that he needs to continue working, "If you don't do anything, it will be boring." Let them do it in the front, and I'll watch from the back, and if there is a deviation, correct it. ”
It was not until December 2021 that a personnel change announcement released on the official website of Wahaha Group "Zong Fuli will be appointed as the company's vice chairman and general manager, responsible for daily work, effective immediately", that the outside world witnessed the transfer of new and old power of Wahaha, because, before, Wahaha Group had no vice chairman, and Zong Qinghou had always served as chairman and general manager.
Nowadays, the days of "father and daughter" fighting side by side can no longer be reproduced. Zong Fuli, now 42 years old, will carry the business empire that Zong Qinghou began to work at the age of 42.
02 Zong Qinghou in the venture capital rivers and lakes.
Whether it is Zong Qinghou or Wahaha, they are not new faces in the venture capital circle.
Especially in 2021, as Zong Fuli gradually moved towards the core position of the group, Zong Qinghou at that time also had a new direction. In July 2021, Zhejiang Wahaha Venture Capital completed the registration of the manager, and Wahaha Venture Capital officially debuted, and the legal representative of the company's main body was Zong Qinghou himself, who was 76 years old at that time, and also obtained the ** qualification certificate at that time.
Afterwards, at the Fortune Global 500 Summit held in October 2021, Zong Qinghou responded, "I want to start a (private equity)** I want to help small enterprises and invest in promising small and medium-sized enterprises." ”
At that time, Zong Qinghou also revealed that the investment object of ** is not limited to the field of large consumption, and is still selecting targets. He also said that the next step will be to develop the big health industry, and may launch health care products to solve sub-health problems, and prepare a lot of products for approval, bluntly saying that "everything is ready only to the east wind".
However, while the outside world is expecting Zong Qinghou, who is in his seventies, to show his skills in the private equity industry, what he is waiting for is only the news that Zong Qinghou will step down as vice chairman of Zhejiang Red Earth Venture Capital in November 2023. Perhaps, Zong Qinghou's physical condition at that time could no longer allow him to insist on high-intensity work.
In addition to Zong Qinghou's strong mark in venture capital, as early as more than ten years ago, Wahaha under the leadership of Zong Qinghou has been involved in the venture capital circle as an LP, indirectly participating in venture capital, and connecting project financing needs by setting up branches.
In 2010, he became the LP of Zhejiang Red Soil Venture Capital, which can be regarded as Wahaha's first exploration in the venture capital circle.
Tianyancha data shows that Zhejiang Red Earth Venture Capital belongs to Shenzhen Venture Capital Group, which was established in 2010 with a registered capital of 1100 million yuan, shareholders include Shenzhen Venture Capital, Hengdian Group, Xizi United Holdings, Zhejiang Zhehua Investment, Tongfang Investment, Zhejiang Red Earth Venture Capital Management, Galaxy Investment, and China Jianxin Holding Group, of which Shenzhen Capital holds about 29% of the shares.
Wahaha Hongzhen Investment, which withdrew from the ranks of shareholders in November 2023, is an investment company 100% owned by Zong Qinghou and a member of Hangzhou Wahaha Group. In December 2010, Wahaha Hongzhen Investment participated in the investment of Zhejiang Laterite Venture Capital as an LP, and the latest public disclosure data shows that Wahaha Hongzhen Investment holds more than 12% of the shares, with a subscription amount of about 13.5 million yuan.
Also in 2010, Hongzhen Investment also invested in the establishment of Zhejiang Wahaha Venture Capital, which is the main company of "Wahaha Venture Capital", of which Hongzhen Investment holds 90% of the shares, and Zong Qinghou's wife Shi Youzhen holds 10% of the shares.
Founded in 2010, Wahaha Venture Capital has been a venture capital institution since 2016 and has become an LP of Yaojin Capital (a joint venture between Sinopharm Group and CICC Capital), Hillhouse Capital, and Fengchuan Capital.
Figure Wahaha Venture Capital's list of foreign investments.
In addition, Hongzhen Investment also invested in a member of Wahaha Group called "Lishui Wahaha Private Equity ** Partnership (Limited Partnership)" in 2022, with a registered capital of 500 million yuan, and its business scope includes equity investment, investment management, asset management and other activities with private equity**.
Soon after its establishment, Lishui Wahaha Private Equity reached an LP and GP relationship with Gaocheng Capital, which was established by Hong Jing, a former partner of Hillhouse Capital. Up to now, Lishui Wahaha Private Equity has only invested in the "Gao Cheng Hong to (Beijing) Equity Investment Partnership (Limited Partnership)".
Interestingly, in this ** LP list, there are also well-known domestic companies such as Yonyou Network and Taikang Life Insurance. According to the announcement information disclosed by Yonyou Network in 2022, the total subscribed capital contribution of 8 partners, including Yonyou Network and Lishui Wahaha Private Equity, is 76.1 billion yuan, of which Lishui Wahaha Private Equity and Taikang Life Insurance invested 200 million yuan each, and Yonyou Network invested 100 million yuan. At the same time, in September 2023, the registered capital of Gaocheng Capital will be increased from the original 7$6.1 billion changed to $8$500 million.
However, from this ** to the relatively conservative shot, from 2022 to the present, ** has only directly invested in 1 project in July 2022, namely Yingmi**, which is an innovative financial technology company that deeply uses Internet technology and deeply cultivates the pan-asset management industry, but in layman's terms, this is an "independent ** sales agency".
In addition to participating in the primary market as an LP, Wahaha is also doing GP.
In 2020, Wahaha Ventures' business scope added "private equity investment, venture capital, management services and other activities", and after a year, Zong Qinghou obtained the first practice qualification, and Wahaha Venture Capital completed the registration of the manager.
Even the Lishui Wahaha private placement that invested in Gaocheng Capital, the largest investor behind it is Zheshang Jinhui Trust subscribed capital 3Jingning Hongzhen Enterprise Management Partnership established for 9.6 billion yuan. However, the executive partner of this ** is still Zhejiang Wahaha Management Consulting, a member of Wahaha Group. In other words, Wahaha not only invests in the participation, but also manages it itself. It's just that the ** has been established for a year, and there is no record of direct investment projects.
But whether it is an LP or a GP, Wahaha has been involved in the primary market as a participant in recent years. In other words, Wahaha has long been dissatisfied with "selling AD calcium milk", and wants to do a big job in the venture capital circle in addition to the main beverage business.
03 Wahaha doesn't want to only sell "AD calcium milk".
However, investment is not a good medicine, at least for Wahaha, which is clearly lagging behind.
Founded in 1987, Wahaha was once China's largest and the world's fifth-largest food and beverage manufacturer, and its founder, Zong Qinghou, was once China's richest man three times between 2010 and 2013. However, Wahaha, the "Chinese beverage aircraft carrier", hit the "ceiling" of its own development in 2013.
In 2013, this year Wahaha ended with 782With an operating income of 800 million yuan, Wahaha became the second largest private non-listed enterprise in China after Huawei, but the good times did not last long, and its performance began to decline after 2013, and Wahaha's operating income remained below 50 billion yuan in the following years.
Although in 2021, the operating income returned to more than 50 billion yuan, reaching 5191.5 billion yuan, but in 2022, the operating income will drop slightly to 51.2 billion yuan, and the data for 2023 has not yet been disclosed, but according to Wahaha's official statement, its annual revenue will remain above 50 billion yuan in 2023. Today's revenue scale is still far from its peak ten years ago.
In order to return to the "peak", Wahaha has been involved in a lot of business over the years. In addition to entering the investment industry, Wahaha also crossed borders and set foot in liquor, milk powder, toothpaste, milk tea, children's clothing and other businesses.
However, judging from market feedback, cross-border operations have not made actual progress, and even most businesses have not caused much repercussions in the market from project approval to promotion. Among them, "Wahaha milk tea" can be said to be the most popular with the boom of new tea drinks, although Wahaha has said that the milk tea project is not a direct project of Wahaha, but a project authorized to partners to operate, but from the equity penetration chart, Wahaha holds 25% of the company's equity.
Back in 2019, in May of this year, Wahaha milk tea began to prepare, and in December of the same year, a nationwide investment promotion was launched. In July 2020, Wahaha Milk Tea opened its first directly-operated store in Guangzhou, and released a bold statement of "opening 10,000 stores in 10 years". Even on the opening day, Zong Qinghou deliberately went to Guangzhou to stand on the platform in person. At that time, Wahaha Milk Tea described the opening scene of the day, "At the opening site, Chairman Zong Qinghou expressed strong confidence and support for the tea industry, and spoke highly of the company. ”
It's a pity that after 3 years of tossing and turning on the road of tea drinking, Wahaha milk tea finally ended in failure and hastily. In July 2023, the original main company of the Wahaha milk tea brand, "Guangzhou Chamei Beverage***", updated a bankruptcy liquidation information, which was involved in dozens of franchise contract disputes, with a total amount of millions of yuan.
Behind the successive obstructions of diversified exploration, in fact, there is Wahaha in the anxiety of "mid-life crisis".
Although Zong Qinghou once asserted, "The beverage industry will never go out of style and will always be a sunrise industry." Even at the moment, Zong Qinghou still believes that this view is not outdated, and it is true that "the beverage industry is an eternal sunrise industry", but it is precisely because of this that the beverage industry has become a battleground. In the past 40 years, the ups and downs of the business sea are as strong as Wahaha, and they can also clearly perceive that the beverage rivers and lakes are no longer what they were back then.
With the intensification of market competition and the continuous change of consumer demand, Wahaha is no longer the "first brother" in the beverage industry. At present, China's beverage industry has entered an era of comprehensive competition, from the initial soda beverage to the current bottled water, carbonated drinks, fruit juice drinks, tea drinks, functional drinks, milk drinks several categories of fierce competition.
In addition, with the increasing health awareness, consumers are paying more and more attention to the quality and nutritional value of products. The sugar-free and low-sugar drinks launched by emerging brands such as the "disruptor" Yuanqi Forest have gained high attention in the market, promoting the popularity of the "sugar-free" concept in the beverage industry. Against this backdrop, Wahaha's traditional beverage and food product lines lack innovation and differentiation, making it difficult to meet the increasingly diverse needs of consumers. In addition, Wahaha is gradually outdated in terms of brand image and marketing strategy, and cannot effectively attract young consumers.
Whether it is investment or cross-border operation, it has failed to soothe Wahaha's anxiety. In the future, Wahaha still needs to explore more new development opportunities to "return to the top", and all this has nothing to do with Zong Qinghou in the future.
But as Zong Qinghou said, "The richest man can't represent any meaning, but Wahaha standing there means that my life is not wasted, and the evidence of my life in this world is standing there, and no one can shake it." ”
The legend of Zong Qinghou is irreplaceable, and Zong Fuli will continue to write the legend of Wahaha.