When Zong Qinghou travels abroad, he likes to visit local supermarkets.
The 74-year-old founder of China’s largest privately held beverage company Hangzhou Wahaha Group isn’t shopping for himself, but doing a little first-hand market research. For example, when Zong visited Singapore in October, he bought boxes of fruit-flavoured beer. Staffback in China then study these samples to see if they could be imported into China, or adapted to local tastes.
“Every new product can be used as a reference,” says Zong in an exclusive interview with Forbes Asia on the sidelines of the Forbes Global CEO conference in Singapore. Zong, who is chairman of Wahaha, is now under pressure to come up with fresh product ideas to rekindle consumer interest in his company, that he’s spent more than three decades running.
The tycoon, who was China’s richest man in 2010, 2012 and 2013, saw Wahaha’s sales slide from 78 billion yuan ($11 billion) in 2013 to 46 billion yuan in 2017 before rebounding slightly to 47 billion yuan last year. His ownership of the company still gives him a fortune of $8.2 billion, but he is no longer No 1, ranking instead as China’s 31st richest person.
One of the main reasons for the decline, say analysts, is that Wahaha hasn’t kept pace with changing consumer tastes in China. Unlike their parents’ generation who grew up drinking Wahaha’s cheap but tasty products such as bottled water and milk drinks costing less than 2 yuan, shoppers today want to spend more for something innovative and new. “Wahaha is still very price-focussed, and hasn’t captured the trading-up trend as well as it could have,” says Mark Tanner, founder of Shanghaibased consultancy China Skinny.
This story is from the February 28, 2020 edition of Forbes India.
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This story is from the February 28, 2020 edition of Forbes India.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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