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Chinese Richest Person Once, Zong Qinghou The Beverage Tycoon Dies At 79

Chinese Richest Person Once, Zong Qinghou The Beverage Tycoon Dies At 79

Zong Qinghou, the self-made billionaire who became China's richest man by wresting control of the country's top beverage brand from Danone, has died at 79.

The founder and chairman of Wahaha Group died of illness yesterday.

Born before the Communist Party took power, Zong's life paralleled China's transformation from a poor and mostly agrarian country into the world's factory floor and its second-largest economy. His wealth, which began with a US$22,000 family loan, grew into billions of dollars.

Zong, who never attended high school, was forced to live in a farming commune in 1964 during Mao Zedong's Cultural Revolution. He left in 1978, the year that Deng Xiaoping began introducing private business and foreign investment to China, freeing up a generation of entrepreneurs like Zong to dabble in capitalism. After working as a salesman for years, Zong took over a small shop in the eastern city of Hangzhou in 1987 where he created Wahaha.

Zong fell out with French giant Danone, as the two dissolved a decade-long partnership in lawsuits and government intervention.

In 1996, Zong formed several joint ventures in China with the Paris-based owner of Evian water, which included the transfer of the Wahaha brand, to the ventures that were 51 percent-owned by Danone.

That partnership grew to a sales peak of 1.1 billion euros (HK$9.32 billion), before Zong accused Danone in 2007 of trying to take over Wahaha, while Danone countered that Zong had violated their contract. The fight was who owned the Wahaha brand - Danone believed it did, while Zong asserted that the Chinese government had blocked the transfer, meaning he still controlled it.

Ultimately, Danone agreed to sell its stake to Zong in 2009. With 80 percent control of Wahaha, Zong became China's richest man by 2012 with a fortune of US$20.1 billion.

However, revenue started to fall as the company was slow to adapt to consumers' changing tastes. Efforts to acquire other companies by Zong's daughter and chosen successor, Zong Fuli "Kelly," fell mostly flat.

China's booming internet industry also propelled digital economy entrepreneurs.

As the mom-and-pop stores that stocked Wahaha's products lost business to online shopping, Zong, who was a member in the National People's Congress, advocated for policies that supported what he called the "real economy" versus the "internet economy."