[News Inside] Who Is This Person Rising as Asia's Richest Amid Chinese Authorities' Crackdown on Ma Yun?

Chairman Zhong Sansan, Founder of Nongfu Spring Bottled Water Company

▲Jungsan San Chairman

[Asia Economy Reporter Kwon Jaehee] There is a person who surpassed Jack Ma, founder of Alibaba, and Ma Huateng, founder of Tencent, to become the richest person in China. It is Zhong Shanshan (66), chairman and founder of Nongfu Spring. Rising to the top wealth position not only in China but also in Asia through his bottled water business, he earned most of his fortune in the past year alone, boasting the fastest wealth growth rate in history.

According to the Bloomberg Billionaires Index on the 3rd, Chairman Zhong Shanshan's fortune was $78.2 billion (approximately 85 trillion KRW), ranking 11th in the world. Of this, $70.9 billion was gained during the year 2020. This was due to the successive listings of vaccine manufacturer Wantai Bio and Nongfu Spring.

After the listings, Wantai Bio's stock price rose about 20 times, and Nongfu Spring's stock price increased by 155%.

Bloomberg described Zhong Shanshan as "a case of accumulating wealth at the fastest speed in history."

Because of this background, he is often mentioned alongside Jack Ma, founder of Alibaba. While Jack Ma, who fell out of favor with the Chinese government last year, saw his fortune drastically reduced due to various regulations from Chinese authorities, Chairman Zhong rose to become China's richest person in 2020. Jack Ma's fortune plummeted from $61.7 billion in October to $50.6 billion as of January 3 this year.

Chairman Zhong was born in 1954 into a wealthy family in Hangzhou, Zhejiang Province. However, during the Cultural Revolution, his parents were purged, and he dropped out in the 5th grade of elementary school. After working various jobs including as a construction laborer, he returned to his studies and graduated from university with difficulty. After graduation, he worked as a reporter for a local newspaper and, believing there would be tremendous business opportunities in China, eventually quit journalism to start a business. This was in the 1990s when China was gradually embracing a market economy and opening its doors.

The first business he started after quitting journalism was a company producing health supplements. As if compensating for his difficult past, his first business was a great success. Having earned significant money from the start, he founded Nongfu Spring in 1996, which made him who he is today.

He established one ironclad rule when starting his bottled water company.

'Do not use tap water.'

There are more than 400,000 bottled water companies in China, but most sell distilled water filtered from ordinary water. He used the water from the nationally protected source at Qiandao Lake in Hangzhou, Zhejiang Province, known for its cleanliness, based on the perception that as China's economy develops, consumers will increasingly seek safe and clean water. Emphasizing this, Nongfu Spring uses the advertising slogan, "We do not make water. We only transport nature."

As he predicted, demand for safe and clean water exploded as China's economy developed, and Nongfu Spring truly took off on a growth trajectory.

Nongfu Spring's bottled water has equipment and distribution costs more than three times higher than other bottled water companies. However, Chairman Zhong did not break his rule of "not using tap water and providing high-quality natural water" and consistently invested in securing distribution networks and automation facilities. As a result, Nongfu Spring established a system capable of producing 81,000 bottles of premium bottled water per hour.

Thanks to Chairman Zhong's generous investment in distribution and facilities, as of 2019, operating profit margin and net profit margin reached 55% and 21%, respectively. In particular, the bottled water profit margin reached 60%. Nongfu Spring has also achieved the number one market share in China's bottled water market for eight consecutive years. The gap with the second-ranked company is more than double, making it an overwhelming leader.

Chairman Zhong did not stop there and expanded into the beverage business with fruit juice in 2003 and functional drinks in 2004. However, rather than sprawling expansion, he focused on "well-being" to preserve the company's identity. After firmly establishing another identity with sugar-free beverages, he built the corporate brand.

However, Chairman Zhong rarely engages in public activities, earning him the nickname "the mysterious tycoon." In China, connections are crucial for doing business, but he has never joined business associations or political groups.

Bloomberg introduced him as "a 'lone wolf' locally because his business is not entangled with other tycoons."