Worth $20 Billion but Spends $20 a Day

His amazing rise from poverty has caused him to be named one of the most outstanding businessmen in the industry, and has garnered him multiple awards for his entrepreneurial and management skills. He has been included in Forbes Magazine’s list of wealthiest people for years now, and is a recipient of numerous awards, such as the Special Contribution Award and the Award for National Model Worker.

As wealthy as Zong Qinghou is, it is quite interesting to find out that China’s richest person prefers to live the simple life; he spends around 20 dollars a day and wears plain clothes and sneakers wherever he goes. In an interview made with Zong Qinghou, he stated:

“People cannot tell if I were wearing clothes worth a thousand (US$160) or a hundred (US$16), so why would I want to spend money on them?”

Qinghou also prefers to eat simple foods, and has very little appetite for large banquets and expensive meals. According to him, it is this kind of lifestyle that keeps him humble and down to earth. And unlike many business owners or executives, Qinghou eats with his workers during lunch and spends a lot of time with them. He has such a great relationship with most of the workers in the company that they tend to call him “big brother” for his efforts in getting close to his people. In fact, Qinghou has never once fired an employee for the entire course of his career as the head of the Hangzhou Wahaha Group.

Zong Quinghou’s Story

What is more surprising about this Chinese billionaire tycoon is his amazing rise to fame and fortune. Coming from a very poor family who suffered during the failed ‘Great Leap Forward’ and ‘Cultural Revolution,’ Qinghou literally worked his way up through thick and thin by hard work and perseverance until he saw his dreams of having the good life come into fruition.

He states that being focused on doing one thing and doing it properly is both simple yet difficult, but it ensures that you will succeed and achieve your goal. His work ethics have kept him disciplined and have enabled him to succeed in areas where most others could not.

Qinghou’s view on philanthropic efforts is quite different from most of the people who engage in philanthropic work. He is not a great believer in simply giving away money or resources to the poor. He once told an interviewer, “If you give money to the poor they’ll just spend it.”

He promotes the importance of hard work, which he believes is the key to lifting the poor out of poverty. This is the very reason he works to establish good relationships with his employees—most of them come from the poor areas in society, which Qinghou chose because he wanted to help his fellow people.

Zong Qinghou was born in the Zhejiang province, China, after the formal close of the Second World War in September 1945. It was a very difficult time back then, as China was utterly devastated during the war. In addition to this, the communists took opportunity of the ensuing chaos by staging a civil war against the severely weakened Nationalist forces, which were at that time thinly spread, trying to maintain the peace in the various parts of war-torn China.

The land was also riddled with warlords who commanded their own armies, which only added to the tension—Qinghou’s grandfather worked for one of the regional warlords, which would later on affect his family’s reputation.

When the communists took over in 1949, they rounded up all the people connected to the Nationalist party and the regional warlords. Fortunately, Qinghou’s grandfather and his family were spared, but not without having their societal status diminished due to their connection to a local warlord. Because of this, the Zong family not only contended with the financial struggles, but also endured shame and discrimination brought upon them by the communists.

And yet, in spite the seemingly insurmountable odds that Qinghou’s family faced, his parents never once taught Qinghou to hate the government. They instead instilled in him the values of hard work and diligence, always reminding the young Qinghou to not let the discouraging voices weigh him down in dreaming for a better future.

Although Qinghou did not have a good scholastic background, this did not keep him from studying earnestly to achieve his dream of a chance to live a better life. And while Qinghou was described by his teachers as someone who had a fairly normal intellect, they did not deny the fact that he was among the most studious students they had. It was due to Qinghou’s diligence and perseverance in studying that he graduated from his secondary school with good marks.

Qinghou’s father was among the 700 million people who were forced into a state-controlled worker program that Chairman Mao Tse Tung dubbed the “Great Leap Forward” during the 1950s. In spite of the strong propaganda that Mao and his communist regime led to make the program successful, by the end of the fifties, the “Great Leap Forward” became a huge failure, and drew a devastating famine that hurled China into an era of darkness.

The famine killed over 40 million people, making it the deadliest famine in the history of the human race. Fortunately, Quinghou and his family survived this tragic ordeal, further igniting Qinghou’s desire to do something with his life to help his family.

Qinghou’s education was cut short in the mid-sixties when he was forced by the communists to join a farming commune in the Zhoushan salt farm along with hundreds of thousands of his fellow countrymen. This was a prelude to Chairman Mao’s second economic campaign, the “Cultural Revolution.” The aim of the program was to strengthen Chairman Mao’s hold over China by eliminating capitalism through the aggressive promotion of communist ideals.

Qinghou’s life on the farming commune was rough and difficult. In an interview made with him many years later, Qinghou recalled:

“For a long time, I couldn't even afford food and clothing. I climbed from the very bottom of the society.”

In spite of the sufferings and hardships that Qinghou faced in the salt farm, he held on to his hope that he could someday go back home, meet his family, and work something out that would improve their lives. Day and night he would ponder on his dreams and goals, which kept him from giving up in the difficult situation that he and his fellow young Chinese were in.

Eventually, Qinghou’s perseverance paid off upon the death of Chairman Mao in 1976. Mao’s successor, Chairman Deng, saw the failed results of the previous administration’s policies and worked to transition China into adopting more liberal policies for the betterment of the country.

Qinghou was eventually released from the farming commune and allowed to go back to his family in the Hangzhou province. Because Qinghou did not have a good educational background, the only work he could find back then was at a local school which many would describe as ‘menial.’ Eventually, through hard work and diligence, Qinghou was able to work as a salesman for consumer-goods companies, something that he found very favorable, since there was a great demand for goods, such as meat, bicycles, and television sets due to the shortage of these in the country.

Zong Quingou’s First Business Property

Qinghou gathered all the knowledge and experience he can during his years of being employed. In 1987, with the help of his two friends who were also retired teachers, Qinghou was able to loan around 22,000 dollars and take over a mini grocery where he used to work in. The store sold milk products and other beverages for the school children in the Shangcheng District.

The Wahaha Company

Upon acquiring the facility, Qinghou wasted no time and remodeled the store, making sure that he was not spending more than he foresaw he would earn. He bought a couple of chairs and tables, which he used to set up the embryonic stage of what would later on be called the Wahaha Company.

Qinghou’s initial business ventures were on the small scale, selling cheap items, such as soda, popsicles, exercise books, and papers—items that were mostly sold to students. Through a process of trial and error, Qinghou learned that if his company started manufacturing products for other companies, it would increase his earnings by more than a hundredfold. However, he also realized that without having its own line of products, the company would not survive for a long time.

As a result of careful planning, Qinghou finally decided to make its own name in the industry. In 1989, Qinghou formally established the Hangzhou Wahaha (which means “laughing children” in Chinese). They produced nutritious foods and nutritional drinks for children.

The Hangzhou Wahaha Group Corporation

His products became instant hit to the community, since there were very few competitors in the business. The company steadily grew throughout the following years, and in 1991, Qinghou was able to acquire an old state-run canned food factory which had 2,000 employees. This acquisition further boosted Wahaha’s income, turning out over 34 million dollars in output. That same year, Qinghou formed the Hangzhou Wahaha Group Corporation.

Qinghou began expanding to the rural areas under the principle that there were very few competitors there. In 1994, he acquired three companies that were affected by the construction of the Three Gorges Dam and established the very first branch in the Chongqing province as a result of the acquisition.

In 1996, the Wahaha Group took a step into the bottled water and dairy products making industry by entering into a venture with Groupe Danone, giving the partner company 51 percent of the shares. They made a trademark agreement which meant that the Wahaha Company had exclusive rights to the production, distribution and product sales of Groupe Danone. This proved to be a success, and by 2007, the collaboration between the two companies grew into 39 joint venture entities.

And while both companies enjoyed growth in every level, the complexity of the business arrangements also grew, which put a strain on the relationship between two companies. As both of their businesses expanded, the Groupe Danone started to make several attempts in taking stakes in Wahaha’s externals, only to be rebuffed by Qinghou himself.

Saying Goodbye to Danone

The relationship between the two companies became further strained when Qinghou backing out of several deals with Danone after finding out that his partner was planning to get more from what was originally agreed. Eventually, both companies called for an arbitrary and by the middle of 2007, reached a settlement and dissolved their partnership.

In spite of this disappointing experience, Qinghou did not allow the damage that was done to forever ruin his company. Through diligence and hard work, as well as the support of the thousands of employees that worked at Wahaha, the company was able to get back on track and do business as usual. In fact, Wahaha is currently the largest beverage company in China, and has gone on to produce numerous products under different brands.

Father of One and Only Daughter

Qinghou’s success is not only limited to his business career. His personal life has also been very fruitful, having learned from his experiences when he was still young. Qinghou met his wife Shi Youzhen after returning from the farming commune. They eventually fell in love and married each other sometime afterwards.

Youzhen bore Qinghou their one and only daughter, Kelly Zong, in 1982. As Kelly grew up, Qinghou trained her in the art of their business, to which she expressed innate interest in. Currently, Kelly heads the purchasing department at Wahaha.

In many interviews, Qinghou has often expressed his interest in making Kelly the next leader of the company once he retires. He also jokingly states that this may still be a long shot, as he has not yet come to the point where he is thinking of retiring from the company.

Worth $12.1 Billion According to Bloomberg

In the recent list of Bloomberg's Billionaires, Zong was estimated to have $12.1 billion worth of properties, making him number 85 in their list. That makes the frugal billionaire of China among the 100 Richest People on Earth. According to a Bloomberg article written in 2012, "Wahaha has benefited from decades of rapid economic growth in China. The company has about 60 factories in 29 provinces across the country, making soda, food and baby formula, as well as children’s apparel, its website shows." Source: Bloomberg.com)

Organizations and Programmes Supported

• The National People’s Congress

Awards and Achievements

• 1992: Won the State Spark Second Prize from the State Science Commission
• 1994: Named as a China Management Master
• 1995: Received the Award for National Model Worker from the Federation of Trade Unions
• 2010: Included in Forbes Magazine’s list of the 100 Richest People in the World
• Named as a National Excellent Entrepreneur
• Named as a National Excellent Manager
• Named as a Model of Patriotism to Support the Armed Forces
• Named as an Outstanding Builder of Socialism with Chinese Characteristics
• Won the First Chinese Entrepreneurs Entrepreneurship Prize
• Received the Special Contribution Award from the Chinese Enterprise Management