Wahaha heiress Kelly Zong Fuli quits Chinese drinks giant 5 months after founder’s death

In the letter seen by the Post, Zong said Hangzhou’s Shangcheng district government and some of Wahaha’s shareholders had questioned her legitimacy as the company’s leader, leaving her unable to perform her duties of managing Wahaha and its subsidiaries.

“I have already tendered the resignation letter to Hangzhou Wahaha Group and all the shareholders and urged related parties to take responsibility of hiring a new general manager,” she said in the letter, dated Monday.

Calls to an official in Wahaha’s public relations department went unanswered. Two sources with knowledge of the matter said it was still uncertain whether the company’s board or the local state-owned assets watchdog had accepted Zong’s resignation.

The shake-up adds to the tumult at Wahaha, which was once China’s biggest drinks maker but has lost market share as a lack of products catering to younger customers collides with increased competition from the likes of Nongfu Spring.

An investment arm under the Hangzhou Shangcheng district government is the biggest shareholder in Wahaha, with a 46 per cent share. Zong’s family has a 29.4 per cent interest, followed by a stockholding party representing Wahaha’s employees with 24.6 per cent.

Wahaha, which means “laughing child” in Chinese, posted a 35 per cent year-on-year decline in sales to 51.2 billion yuan (US$7.1 billion) in 2022, the latest annual figure available, according to the All-China Federation of Industry and Commerce.

Rival Nongfu Spring’s revenue increased almost 30 per cent to 42.7 billion yuan in 2023, and its founder Zhong Shanshan is now ranked as China’s wealthiest businessman with net assets worth US$53.4 billion, according to Bloomberg data.

The younger Zong, 42, has been working to win back market share since taking the helm. She picked a new brand ambassador, spent more on TV commercials and expanded online sales through live-streaming commerce.

An only child, she graduated with a degree in international business from Pepperdine University in the US and then started her career at one of Wahaha’s factories to learn how to manage production. She was named as vice-chair and general manager in December 2021, paving the way for her to take over the business empire her father created.

The family was ranked 31st on China’s rich list in 2023 with wealth of US$13.1 billion, according to the Hurun Research Institute. It was the richest family in the nation in 2010 and 2012.

Zong also owns Hongsheng Group, a drink and packaging-service company she has been in charge of since 2007, where she launched her own brand of tea drinks, KellyOne.

The elder Zong founded Wahaha in 1987 after transforming it from a school grocery. He built the empire by launching nutritious milk drinks and bottled water. Wahaha grabbed headlines in the early 2000s for a tussle with French multinational Danone over control of local joint ventures. The elder Zong resolved the dispute by paying an estimated US$500 million to the French partner.