Zong Qinghou should rethink Wahaha management style; Hangzhou Wahaha Group — China’s leading beverage maker — operates like a “one-person company” and has never had a deputy CEO, with Zong Qinghou, the company’s founder, chairman and CEO handling every decision
September 24, 2013 Leave a comment
Zong Qinghou should rethink Wahaha management style: insider
Staff Reporter
2013-09-23
Hangzhou Wahaha Group — China’s leading beverage maker — operates like a “one-person company” and has never had a deputy CEO, with Zong Qinghou, the company’s founder, chairman and CEO handling every decision. However, following reports that Zong was a victim of a knife attack, observers have begun to question whether the group would be able to continue operating smoothly if Zong were to stepped down, reports the Guangzhou-based Southern Metropolis Daily. The Chinese tycoon — the country’s second-richest man — was attacked near his home in Hangzhou in eastern China’s Zhejiang province on Sept. 13, sustaining minor wounds to his left hands. Local police later confirmed that Zong was attacked by a migrant worker surnamed Yang who was angry when Zong declined to offer him a job at his company.The incident has attracted wide media attention as it is related to not only Zong’s personal safety, but also the future of the business group. Wahaha is reportedly facing a series of problems, including the operations of its problem-plagued Wahaha Commercial Shareholding — the group’s independently run commercial company. Zong’s foray into retail trade has hit a snag as Wahaha Commercial Shareholding is undergoing a personnel reshuffle and is teetering on the brink of collapse, an insider said.
The commercial unit was established last year with the aim of launching shopping malls, chain stores, boutique stores and convenience stores in Chinese cities with the highest growth potential. Meanwhile, Zong said that he planned to venture into retail by opening 5-10 shopping centers by 2014 and 100 of them over the next 3-5 years.
However, the first European boutique shopping mall introduced by Wahaha — Waow Plaza — launched in Hangzhou in November last year has posted weak revenues. Insiders cite Wahaha’s lack of experience in the retail sector as the main reason for the poor performance.
Zong is looking to foray into the retail sector due to the increasingly slim profits made by Wahaha’s main business in the beverage manufacturing sector, prompting Zong to diversify to increase profits, an insider said. For the company to continue to diversify and expand, Zong will also have to rethink his “one-person” management style, he added.
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