The “Bad Luck” Haunting China’s Richest Billionaire

Billionaire Zhong Shanshan, chairman of Nongfu Spring Co. based in Hangzhou, China, has had a challenging year, with his personal wealth dropping by $13 billion since the start of the year. His current net worth is approximately $54.8 billion, putting him in close proximity to billionaire Colin Huang, founder of PDD Holdings Inc., whose net worth stands at $47.3 billion. This situation puts Zhong’s position as the richest billionaire in China at risk.

The primary reasons for this decline are the pressures in the business sector and increasing competition, particularly in the bottled water market in China. Slower economic growth and consumer hesitance have negatively impacted Zhong’s company. Besides the fierce price competition, Nongfu faces challenges from a growing trend of domestic consumption, resulting in Nongfu’s stock—listed in Hong Kong—losing 20% of its value since February.

Earlier this year, after the death of Zong Qinghou, the founder of Hangzhou Wahaha Group Co., a competitor of Nongfu, a wave of criticism was directed at Nongfu. Consumers criticized the design of Nongfu’s bottles for resembling Japanese products and expressed doubts about the Zhong family’s loyalty to China, as Zhong’s son is reported to hold U.S. citizenship. Consequently, Wahaha’s sales surged, exerting significant pressure on Nongfu.

Additionally, in April, China Resources Beverage Holdings submitted an application to list its shares in Hong Kong to increase capital investment for its bottled water brand, C’estbon, a major competitor of Nongfu. In response, Nongfu launched a new bottled water product priced at less than 1 yuan per bottle, a move aimed at capturing market share but undermining profitability.

Last month, the Hong Kong Consumer Council reported that Nongfu’s bottled water contained bromate at the maximum permissible level. Although the council later apologized for misapplying standards, Nongfu’s stock continued to decline. In light of these challenges, Zhong has pledged to repurchase $256 million worth of company stock to restore investor confidence.