With the death of Zong Qinghou, a generation of Zhejiang businessmen and the founder of Wahaha, there is one less self-made business legend in our era.
The Wahaha Group founded by Zong Qinghou is a household name, known to women and children, but for so many years, Wahaha has always insisted that the company is not listed, not only not listed, but also does not engage in financing, which makes many people feel incredible. So, what are the strategic considerations and deep logic behind this?
Zong Qinghou's family was very poor when he was a child, and in order to reduce the burden on his family, he chose to drop out of school and go home after graduating from junior high school, and worked the farm for 15 years.
In 1979, Zong Qinghou returned to his hometown of Hangzhou and found a job in a school-run factory. In 1987, Zong Qinghou started his business, mainly selling soda.
In 1989, Zong Qinghou found experts to develop a "Wahaha Children's Nutrition Solution" and established Hangzhou Wahaha Nutritional Food Factory.
This nutrient solution is made of longan, red dates, hawthorn and lotus seeds, etc., and plays the advertising slogan "Drink Wahaha, eat is fragrant", and once it was launched on the market, it became popular all over the country.
By 1991, Wahaha's annual sales reached 400 million yuan, and its net profit reached more than 70 million yuan.
In 1996, Zong Qinghou aimed at the bottled water market and launched Wahaha pure water.
Under the leadership of Zong Qinghou, Wahaha has rapidly grown from a small food factory to a 100 billion business empire, creating a miracle in China's modern business history.
According to the official website of Wahaha Group, over the past 35 years, Wahaha has accumulated sales of 860.1 billion yuan, profits and taxes of 174 billion yuan, and taxes of 74.2 billion yuan.
And Zong Qinghou himself became the richest man in China by Forbes in 2012 with a net worth of $10 billion.
Looking back on Wahaha's growth path, it is not difficult to find that the reason why this company has not chosen to go public for financing for many years, but it has been able to stand firm in the fierce market competition is inseparable from the business philosophy and values of its founder Zong Qinghou.
In Zong Qinghou's own words: "Listing is responsible for shareholders. If it falls in the end, so that the people lose a lot of money, I don't think it is appropriate. Zong Qinghou's insistence is an important reason why this company has not been listed for more than 30 years.
In addition, Zong Qinghou runs the company, adopts a steady development strategy, coupled with his accurate grasp of the market, so that Wahaha can still maintain a strong growth momentum without the need for external capital injection.
When the company needs capital for expansion and coping with external market risks, Wahaha does not need to solve the problem through external financing, because its cash flow is sufficient, and there are tens of billions of cash lying on its account all year round, which is enough to cope with the turbulence of the market.
Wahaha's non-listing is also related to its family-style management model. He knows that once Wahaha is listed, the company's shareholding structure will undergo fundamental changes, which may lead to the management's decision-making being influenced by external shareholders, which is not conducive to the long-term development of the company.
Finally, Wahaha's emphasis on brand value is also a factor in its non-listing. Perhaps, in the view of founder Zong Qinghou, the listing of the company may impact Wahaha's brand image, which in turn will affect consumers' awareness and loyalty to the Wahaha brand.
In any case, Wahaha has not been listed for more than 30 years, but it has not affected the development and growth of the company at all, which can be regarded as an example worth pondering for Chinese enterprises.
In addition to Wahaha, there are only a handful of industry giants in China that have insisted on not being listed for many years, and all you can think of may be Huawei, Fangtai and Lao Gan Ma. Zong Qinghou died