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China’s Growing e-Commerce Graveyard: These Companies Already Failed in 2017

“When there’s enough wind, even a pig can fly” (当风来了, 猪也会飞起来) does not hold true for all online businesses.

Manya Koetse

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China’s e-commerce market is a dog-eat-dog world, with new companies popping up every day, while older ones are throwing in the towel. How (not) to make it in China’s crazy world of e-commerce has become a hot topic of discussion on Chinese social media. What’s on Weibo takes a look at 3 big – once successful – Chinese online companies, and why they failed in 2017.

It is still early in the year, but already some big online companies have exited China’s chaotic world of e-commerce. The release of an ‘e-commerce dead list’ (#2017电商死亡名单#) became top trending on Chinese social media on February 22, and triggered discussions on the status-quo of the market.

“One by one they collapse, one by one they pop up,” one netizen (@逛吃秦皇岛) says. With an ever-growing Chinese online population and the world’s largest e-commerce market, more companies seek to join, hoping to find a goldmine. Instead, many of them soon end up on the e-commerce graveyard. The popular idea about China’s e-market that “when there’s enough wind, even a pig can fly” (当风来了, 猪也会飞起来) does not seem to hold true for all online businesses.

Their collapse does not necessarily mean the end – for many, it is just a new beginning. “This whole business is like gambling,” one Weibo commenter responds. Another micro-blogger says: “E-commerce companies all soon become like conventional businesses. The large online companies are just too strong. It is easy to join [the market], but hard to survive.”

Let’s take a look at 3 big companies that have already collapsed this year, and what experts say goes wrong in their approach to the Chinese online market.

 
“China’s 2017 e-Commerce Dead List”

Along with other Chinese media, China’s influential online e-commerce magazine Ebrun.com recently released a list of big companies that have closed their doors this year. We have selected the 3 biggest ones.

 

1. Dingfangbao 订房宝

Business: Online Hotel Bookings

With the slogan “You only sleep ten hours, why would you spend all your money for the day on it?” (只睡十小时,为何要花整天的钱), Dingfangbao was an up-and-coming online hotel booking site (app + website) selling high-class hotel rooms at low prices, focused at offering clients a luxurious room for the night.

The company started in late 2014 with its own formula that allowed customers to search for available hotel rooms after 6 pm. Through the Dingfangbao app and site, four and five-star hotels in big cities such as Beijing, Shanghai, Guangzhou, and Shenzhen could offer their rooms at competitive prices if they were not occupied or reserved by 6 pm. A win-win situation: Dingfangbao users could get a top room for a cheap price, and hotels wouldn’t be left with empty hotel rooms.

The Dingfangbao service (Dingfangbao literally meaning ‘booking treasure’) was especially aimed at business travelers who won’t arrive at their hotels until the evenings due to late meetings and leave again early in the morning.

With Japanese nude model/(adult) film actress Sola Aoi (苍井空) as their company ambassador, it seemed that Dingfangbao was also aiming at luring customers to luxurious hotels at nighttime for other purposes – similar to the ‘love hotels’ in Japan.

Japanese sexy actress Sola Aoi was Dingfangbao’s spokesperson.

Dingfangbao had a promising take-off in 2014, with various fundings and an initial angel investment of 6 million RMB (±870K$), followed by second- and third-round funding of a total of 13 million RMB (±1.9M$) in 2015 and 2016.

But on 27 January 2017, Dingfangbao announced that it would be stopping its services. CEO Sun Jianrong (孙建荣) told the media that although there certainly is a market for the Dingbaofang formula, the frequency with which its clients used these services was too low and not enough to cover their operational costs.

On Weibo, the company still has around 19000 followers. Sola Aoi, who has a staggering 17 million fans on her Weibo page, announced on February 8 that she would step down as the company’s spokesperson. A day later, the company officially closed its doors, although its website is still live at the time of writing.

 

2. Greenbox 绿盒子

Business: O2O Children’s Clothing

Online trendy children’s clothing brand Greenbox (绿盒子) was a success story when it first entered China’s O2O (online-to-offline) retail market in 2010. The company was already established by businesswoman Wu Fangfang (吴芳芳) years before, but it made a conscious shift from offline to e-commerce when Wu realized the potential of middle-class moms spending more time shopping for their kids on the internet.

In 2010, Greenbox received two rounds of funding from Trust Bridge Partners (TBP) of 20 million RMB (3M$), and of 100 million (14.5M$) from DCM. Children clothing brands such as Miss de Mode, M.I.L. Boy, Jenny Bear, and a special Disney brand all belonged to Greenbox, which soon was named one of China’s top 10 e-retailers.

Greenbox tapped into the children’s clothing at the right time, as this retail segment has become especially booming business over the past few years. Together with the surge in other children-related products, there has been a shift to bigger sales of these ‘non-traditional products’ that show that China’s ‘Mummy Economy’ (妈妈经济) has become increasingly more relevant.

Wu Fangfang, the founder of Greenbox.

Soon after the brand was established, it became one of the most popular children’s clothing brands (ranking no.1 for three years in a row) on Alibaba’s online malls Tmall and Taobao. But Greenbox was not solely sold through Alibaba; it was also available through other online shopping platforms such as JD.com and Dangdang. The brand also had its own shop on WeChat.

In 2015, Greenbox started opening up physical stores besides its online ones. It had around 100 (flagship) stores in China’s first-tier cities, solely focused on online sales for the second- and third-tier cities. Was the company taking on more than it could? According to some Chinese media, the brand was “blindly expanding” and growing too fast, too soon, which led to recurring financial difficulties throughout the years. Their financial problems severely worsened in 2016, as the children’s clothing became increasingly competitive. In January 2017, the brand finally announced its bankruptcy.

On Weibo the brand still has 76000 fans, but it has been inactive for months. Some netizens are surprised that the well-known brand has quit, and wonder what this means for the future of other successful ‘Taobao brands.’

 

3. An Home 安个家

Business: Online Real Estate

An Home (安个家) was established in April of 2015. Headquartered in Shanghai, it was independently funded (10 million RMB, 1.5M$) by CEO Liang Weiping (梁伟平). Its business offered online real estate services with a focus on its mobile app, attempting to rival with traditional real estate services.

Different from offline realtors, An Home aimed to be an online (mobile) platform where its home-seekers, homeowners, and consultants could connect with each other, making the process of buying and selling a house less time-consuming and more efficient.

An Home was a promising start-up for which Liang Weiping gathered a team coming from prosperous companies such as Tencent and Alibaba.

But by late December of 2016, Liang admitted to Chinese media that the company was facing financial hardships, and that they had not succeeded in finding the right way to compete with their offline rivals through online channels. As booming as all corners of China’s e-commerce market might seem, people might not be ready for O2O when it comes to real estate.

One of the reasons for its failure was that eventually, no matter online or offline, access to a large number of houses is the key to winning over the real estate market – and it was precisely this issue where the company feel behind compared to the more traditional channels.

Late 2016, CEO Liang sent out a letter to all of its staff that An Home had to halt operations due to financial difficulties. The company has now closed its doors.

What Can We Learn from the Graveyard Companies?

The aforementioned online companies are not the only ones who did not make it this year. Bollain Home Textile (帛澜家纺天猫店), founded in 2012 and selling bedding and home textiles through over 50 online stores in China, has collapsed after running behind approximately 16 million RMB (2.3M$) in its payments to suppliers and staff.

Online recruitment company Job Tong (周伯通招聘), established in 2013 as a major social recruitment platform and even receiving a 28 million RMB investment from NetEase, also went down earlier this year – its online competitors, including lagou.com, liepin.com, and zhipin.com, simply grew too strong.

 

“Even the most clever housewife cannot cook without rice”

 

And then we have not even mentioned foreign brands such as Lotte and others that closed their doors this doors in the highly competitive Chinese e-market.

So what is the lesson to be learned from these start-up failures? Of course, there is not one answer.

But Chinese e-commerce guru Wang Yongjun (王勇军), who has over 2,5 million fans on his Weibo account (@老高电商圈子), thinks he knows what China’s e-commerce start-ups need.

Wang runs a large networking group called the ‘Laogao Club’ for online entrepreneurs in China that are active on Taobao, Tmall, JD.com, etc, and in response to the ‘2017 failing e-commerce list’, published a blog on February 22 in which he gives some main points on how to succeed in this dog-eat-dog e-commerce world.

Mr. Wang, founder of the Laogao Club, explains how businesses can become successful on platforms such as Taobao or JD.com.

According to Wang’s article (in Chinese), which received many views on Weibo on February 22, building up an online community is key for any e-commerce business in China.

“Even the most clever housewife cannot cook without rice”, Wang argues, seeing an online following as the key ingredient to any online-based business. Drawing in communal media followers costs time and energy – haste makes waste.

The ‘guru’ says that online businesses can’t just gather their following by simply arranging a KOL (Key Opinion Leader) or online celebrity (see the first Dingfangbao example) for their brand; it is something a brand has to do themself, since they are the core that needs to attract fans.

 

“No matter how good you are, or how good your product is, it is worth nothing without an online community.”

 

“No matter how good you are, or how good your product is, it is worth nothing without an online community,” Wang writes. In a time when netizens are drowning in the information that is presented to them, it is essential that brands and companies are precise in targeting their relevant audiences and shooting their arrows in the right place.

Wang strongly advises companies to set up the right online environment that suits their target audience, and to pick the right timing to market their messages. Sometimes brands are lucky when their campaign goes viral, but mostly it is about smart strategy.

Before converting your assets into cash, it is important to continue to be valuable to followers and give them a reason to stay. Wang stresses that it is never a good idea to start the money-making machine too soon – you first need to make sure you have a steady and loyal group of online followers that is attached to your brand/company.

 

“Don’t drown the pond to get at the fish.”

 

“Don’t be overhasty, don’t drain the pond to get to the fish” (不能操之过急、竭泽而渔), is one of the messages of the Laogao Club for their online entrepreneurs. You can only transform your brand and starting making money once your ‘fans’ trust your brand/company enough and feel connected to its ‘flavor.’

Keeping up the quality of your services and products, and always making sure it brings more than just a ‘bargain’, it is therefore key to survive in the fiercely competitive Chinese e-commerce market.

Reading from the Laogao Club’s road to e-success, we could draw the conclusion that Dingfangbao had not worked enough on creating its own communal following of trusting and loyal fans before attempting to converting its assets into cash. An Home jumped into the pond before there were any fish at all, and Greenbox went ahead of itself and became too hasty to expand.

“If you enter the pit, be cautious”, some netizens respond on Weibo: “It is risky business.”

“There are too many people who don’t understand and think they are already running an e-business simply because they openened an online company. It looks good on paper, but in reality, it’s nothing,” another person writes.

– By Manya Koetse

©2017 Whatsonweibo. All rights reserved. Do not reproduce our content without permission – you can contact us at info@whatsonweibo.com.

Manya Koetse is the founder and editor-in-chief of whatsonweibo.com. She is a writer, public speaker, and researcher (Sinologist, MPhil) on social trends, digital developments, and new media in an ever-changing China, with a focus on Chinese society, pop culture, and gender issues. She shares her love for hotpot on hotpotambassador.com. Contact at manya@whatsonweibo.com, or follow on Twitter.

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China Brands, Marketing & Consumers

More than Malatang: Tianshui’s Recipe for Success

Zibo had its BBQ moment. Now, it’s Tianshui’s turn to shine with its special take on malatang. Tourism marketing in China will never be the same again.

Manya Koetse

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Since the early post-pandemic days, Chinese cities have stepped up their game to attract more tourists. The dynamics of Chinese social media make it possible for smaller, lesser-known destinations to gain overnight fame as a ‘celebrity city.’ Now, it’s Tianshui’s turn to shine.

During this Qingming Festival holiday, there is one Chinese city that will definitely welcome more visitors than usual. Tianshui, the second largest city in Gansu Province, has emerged as the latest travel hotspot among domestic tourists following its recent surge in popularity online.

Situated approximately halfway along the Lanzhou-Xi’an rail line, this ancient city wasn’t previously a top destination for tourists. Most travelers would typically pass through the industrial city to see the Maiji Shan Grottoes, the fourth largest Buddhist cave complex in China, renowned for its famous rock carvings along the Silk Road.

But now, there is another reason to visit Tianshui: malatang.

 
Gansu-Style Malatang
 

Málàtàng (麻辣烫), which literally means ‘numb spicy hot,’ is a popular Chinese street food dish featuring a diverse array of ingredients cooked in a soup base infused with Sichuan pepper and dried chili pepper. There are multiple ways to enjoy malatang.

When dining at smaller street stalls, it’s common to find a selection of skewered foods—ranging from meats to quail eggs and vegetables—simmering in a large vat of flavorful spicy broth. This communal dining experience is affordable and convenient for solo diners or smaller groups seeking a hotpot-style meal.

In malatang restaurants, patrons can usually choose from a selection of self-serve skewered ingredients. You have them weighed, pay, and then have it prepared and served in a bowl with a preferred soup base, often with the option to choose the level of spiciness, from super hot to mild.

Although malatang originated in Sichuan, it is now common all over China. What makes Tianshui malatang stand out is its “Gansu-style” take, with a special focus on hand-pulled noodles, potato, and spicy oil.

An important ingredient for the soup base is the somewhat sweet and fragrant Gangu chili, produced in Tianshui’s Gangu County, known as “the hometown of peppers.”

Another ingredient is Maiji peppercorns (used in the sauce), and there are more locally produced ingredients, such as the black fungi from Qingshui County.

One restaurant that made Tianshui’s malatang particularly famous is Haiying Malatang (海英麻辣烫) in the city’s Qinzhou District. On February 13, the tiny restaurant, which has been around for three decades, welcomed an online influencer (@一杯梁白开) who posted about her visit.

The vlogger was so enthusiastic about her taste of “Gansu-style malatang,” that she urged her followers to try it out. It was the start of something much bigger than she could have imagined.

 
Replicating Zibo
 

Tianshui isn’t the first city to capture the spotlight on Chinese social media. Cities such as Zibo and Harbin have previously surged in popularity, becoming overnight sensations on platforms like Weibo, Xiaohongshu, and Douyin.

This phenomenon of Chinese cities transforming into hot travel destinations due to social media frenzy became particularly noteworthy in early 2023.

During the Covid years, various factors sparked a friendly competition among Chinese cities, each competing to attract the most visitors and to promote their city in the best way possible.

The Covid pandemic had diverse impacts on the Chinese domestic tourism industry. On one hand, domestic tourism flourished due to the pandemic, as Chinese travelers opted for destinations closer to home amid travel restrictions. On the other hand, the zero-Covid policy, with its lockdowns and the absence of foreign visitors, posed significant challenges to the tourism sector.

Following the abolition of the zero-Covid policy, tourism and marketing departments across China swung into action to revitalize their local economy. China’s social media platforms became battlegrounds to capture the attention of Chinese netizens. Local government officials dressed up in traditional outfits and created original videos to convince tourists to visit their hometowns.

Zibo was the first city to become an absolute social media sensation in the post-Covid era. The old industrial and mining city was not exactly known as a trendy tourist destination, but saw its hotel bookings going up 800% in 2023 compared to pre-Covid year 2019. Among others factors contributing to its success, the city’s online marketing campaign and how it turned its local BBQ culture into a unique selling point were both critical.

Zibo crowds, image via 163.com.

Since 2023, multiple cities have tried to replicate the success of Zibo. Although not all have achieved similar results, Harbin has done very well by becoming a meme-worthy tourist attraction earlier in 2024, emphasizing its snow spectacle and friendly local culture.

By promoting its distinctive take on malatang, Tianshui has emerged as the next city to captivate online audiences, leading to a surge in visitor numbers.

Like with Zibo and Harbin, one particular important strategy used by these tourist offices is to swiftly respond to content created by travel bloggers or food vloggers about their cities, boosting the online attention and immediately seizing the opportunity to turn online success into offline visits.

 
A Timeline
 

What does it take to become a Chinese ‘celebrity city’? Since late February and early March of this year, various Douyin accounts started posting about Tianshui and its malatang.

They initially were the main reason driving tourists to the city to try out malatang, but they were not the only reason – city marketing and state media coverage also played a role in how the success of Tianshui played out.

Here’s a timeline of how its (online) frenzy unfolded:

  • July 25, 2023: First video on Douyin about Tianshui’s malatang, after which 45 more videos by various accounts followed in the following six months.
  •  Feb 5, 2024: Douyin account ‘Chuanshuo Zhong de Bozi’ (传说中的波仔) posts a video about malatang streetfood in Gansu
  • Feb 13, 2024: Douyin account ‘Yibei Liangbaikai’ (一杯梁白开) posts a video suggesting the “nationwide popularization of Gansu-style malatang.” This video is an important breakthrough moment in the success of Tianshui as a malatang city.
  • Feb – March ~, 2024: The Tianshui Culture & Tourism Bureau is visiting sites, conducting research, and organizing meetings with different departments to establish the “Tianshui city + malatang” brand (文旅+天水麻辣烫”品牌) as the city’s new “business card.”
  • March 11, 2024: Tianshui city launches a dedicated ‘spicy and hot’ bus line to cater to visitors who want to quickly reach the city’s renowned malatang spots.
  • March 13-14, 2024: China’s Baidu search engine witnesses exponential growth in online searches for Tianshui malatang.
  • March 14-15, 2024: The boss of Tianshui’s popular Haiying restaurant goes viral after videos show him overwhelmed and worried he can’t keep up. His facial expression becomes a meme, with netizens dubbing it the “can’t keep up-expression” (“烫不完表情”).

The worried and stressed expression of this malatang diner boss went viral overnight.

  • March 17, 2024: Chinese media report about free ‘Tianshui malatang’ wifi being offered to visitors as a special service while they’re standing in line at malatang restaurants.
  • March 18, 2024: Tianshui opens its first ‘Malatang Street’ where about 40 stalls sell malatang.
  • March 18, 2024: Chinese local media report that one Tianshui hair salon (Tony) has changed its shop into a malatang shop overnight, showing just how big the hype has become.
  • March 21, 2024: A dedicated ‘Tianshui malatang’ train started riding from Lanzhou West Station to Tianshui (#天水麻辣烫专列开行#).
  • March 21, 2024: Chinese actor Jia Nailiang (贾乃亮) makes a video about having Tianshui malatang, further adding to its online success.
  • March 30, 2024: A rare occurrence: as the main attraction near Tianshui, the Maiji Mountain Scenic Area announces that they’ve reached the maximum number of visitors and don’t have the capacity to welcome any more visitors, suspending all ticket sales for the day.
  • April 1, 2024: Chinese presenter Zhang Dada was spotted making malatang in a local Tianshui restaurant, drawing in even more crowds.

 
A New Moment to Shine
 

Fame attracts criticism, and that also holds true for China’s ‘celebrity cities.’

Some argue that Tianshui’s malatang is overrated, considering the richness of Gansu cuisine, which offers much more than just malatang alone.

When Zibo reached hype status, it also faced scrutiny, with some commenters suggesting that the popularity of Zibo BBQ was a symptom of a society that’s all about consumerism and “empty social spectacle.”

There is a lot to say about the downsides of suddenly becoming a ‘celebrity city’ and the superficiality and fleetingness that comes with these kinds of trends. But for many locals, it is seen as an important moment as they see their businesses and cities thrive.

Even after the hype fades, local businesses can maintain their success by branding themselves as previously viral restaurants. When I visited Zibo a few months after its initial buzz, many once-popular spots marketed themselves as ‘wanghong’ (网红) or viral celebrity restaurants.

For the city itself, being in the spotlight holds its own value in the long run. Even after the hype has peaked and subsided, the gained national recognition ensures that these “trendy” places will continue to attract visitors in the future.

According to data from Ctrip, Tianshui experienced a 40% increase in tourism spending since March (specifically from March 1st to March 16th). State media reports claim that the city saw 2.3 million visitors in the first three weeks of March, with total tourism revenue reaching nearly 1.4 billion yuan ($193.7 million).

There are more ripple effects of Tianshui’s success: Maiji Shan Grottoes are witnessing a surge in visitors, and local e-commerce companies are experiencing a spike in orders from outside the city. Even when they’re not in Tianshui, people still want a piece of Tianshui.

By now, it’s clear that tourism marketing in China will never be the same again. Zibo, Harbin, and Tianshui exemplify a new era of destination hype, requiring a unique selling point, social media success, strong city marketing, and a friendly and fair business culture at the grassroots level.

While Zibo’s success was largely organic, Harbin’s was more orchestrated, and Tianshui learned from both. Now, other potential ‘celebrity’ cities are preparing to go viral, learning from the successes and failures of their predecessors to shine when their time comes.

By Manya Koetse

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China Brands, Marketing & Consumers

In Hot Water: The Nongfu Spring Controversy Explained

Nongfu and nationalists: how the praise for one Chinese domestic water bottle brand sparked online animosity toward another.

Manya Koetse

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The big battle over bottled water has taken over Chinese social media recently. The support for the Chinese Wahaha brand has morphed into an anti-Nongfu Spring campaign, led by online nationalists.

Recently, China’s number one water brand, Nongfu Spring (农夫山泉) has found itself in the midst of an online nationalist storm.

The controversy started with the passing of Zong Qinghou (宗庆后), the founder and chairman of Wahaha Group (娃哈哈集团), the largest beverage producer in China. News of his passing made headlines on February 25, 2024, with one Weibo hashtag announcing his death receiving over 900 million views (#宗庆后逝世#).

The death of the businessman led to an outpouring of emotions on Weibo, where netizens praised his work ethic, dedication, and unwavering commitment to his principles.

Zong Qinghou, image via Weibo.

Born in 1945, Zong established Wahaha in Hangzhou in 1987, starting from scratch alongside two others. Despite humble beginnings, Zong, who came from a poor background, initially sold ice cream and soft drinks from his tricycle. However, by the second year, the company achieved success by concentrating on selling nutritional drinks to children, a strategy that resonated with Chinese single-child families (Tsui et al., 2017, p. 295).

The company experienced explosive growth and, boasting over 150 products ranging from milk drinks to fruit juices and soda pops, emerged as a dominant force in China’s beverage industry and the largest domestic bottled-water company.

Big bottle of Wahaha (meaning “laughing child”) water.

The admiration for Zong Qinghou and his company relates to multiple factors. Zong was loved for his inspirational rags-to-riches story under China’s economic reform, not unlike the self-made Tao Huabi and her Laoganma brand.

He was also loved for establishing a top Chinese national brand and refusing to be bought out. A decade after Wahaha partnered with the France-based multinational Danone in 1996, the two companies clashed when Zong accused Danone of trying to take over the Wahaha brand, which turned into a high-profile legal battle that was eventually settled in 2009, when Danone eventually sold all its stakes.

It is one of the reasons why Zong was known as a “patriotic private entrepreneur” (爱国民营企业家) who remained devoted to China and his roots.

Netizens also admire the Chinese tycoon’s modesty and humility despite his immense wealth. He would often wear simple cloth shoes and, apparently not caring much about the elite social stratum, allegedly declined invitations to dine with Bill Gates and the Queen of England. He had a people-centric business approach. He prioritized the welfare of Wahaha employees, ensuring the protection of pensions for retired workers, establishing an employee stock ownership plan, and refused to terminate employees older than 45.

A post praising Zong and his daughter for staying humble despite their wealth: wearing simple shoes and not looking at their phones.

Zong and his daughter stand out due to their simple shoes.

As a tribute to Zong following his passing in late February, people not only started buying Wahaha bottled water, they also initiated criticism against its major competitor, Nongfu Spring (农夫山泉). Posts across various Chinese social media platforms, from Douyin to Weibo, started to advocate for boycotting Nongfu as a means to “protect” Wahaha as a national, proudly made-in-China brand.

 
From Love for Wahaha to Hate for Nongfu
 

With the death of Zong Qinghou, it seems that the decades-long rivalry between Nongfu and Wahaha has suddenly taken center stage in the public opinion arena, and it’s clear who people are rooting for.

The founder and chairman of Nongfu Spring is Chinese entrepreneur Zhong Shanshan (钟睒睒), and he is perhaps less likeable than Zong Qinghou, in part because he is not considered as patriotic as him.

Born in 1954, Zhong Shanshan is a former journalist who started working for Wahaha in the early 1990s. He established his own company and started focusing on bottled water in 1996. He would become China’s richest man.

His wealth was not just accumulated because of his Nongfu Spring water, which would become a leader in China’s bottled water market. Zhong also became the largest shareholder of Wantai Biological Pharmacy Enterprise, which experienced significant growth following its IPO. Cecolin, a vaccine against human papillomavirus (HPV), is manufactured by Innovax, a wholly owned subsidiary of Wantai.

Zhong Shanshan, image via Sohu.

The fact that Zhong Shanshan previously worked for Zong Qinghou and later ventured out on his own does not cast him in a positive light, especially in the context of netizens mourning Zong. Many people perceive Zhong Shanshan as a profit-driven businessman who lacks humility and national spirit compared to his former boss. Some even label him as ‘ungrateful.’

By now, the support for Wahaha water has snowballed into an anti-Nongfu campaign, resulting in intense scrutiny and criticism directed at the brand and its owner. This has led to a significant boycott and a sharp decline in sales.

Netizens are finding multiple reasons to attack Nongfu Spring and its owner. Apart from accusing Zhong Shanshan of being ungrateful, one of the Nongfu brand’s product packaging designs has also sparked controversy. The packaging of its Oriental Leaf Green Tea has been alleged to show Japanese elements, leading to claims of Zhong being “pro-Japan.”

Chinese social media users claim the packaging of this green tea is based on Japanese architecture instead of Chinese buildings.

Another point of ongoing contention is the fact that Zhong’s son (his heir, Zhong Shuzi 钟墅子) holds American citizenship. This has sparked anger among netizens who question Zhong’s allegiance to China. Concerned that the future of Nongfu might be in the US instead of China, they accuse Zhong and his business of betraying the Chinese people and being unpatriotic.

But what also plays a role in this, is how Zhong and the Nongfu Spring PR team have responded to the ongoing criticism. Some bloggers (link, link) argue their approach lacks emotional connection and comes off as too business-like.

On March 3rd, Zhong himself issued a statement addressing the personal attacks he faced following the passing of Zong Qinghou. In his article (我与宗老二三事), he aimed to ‘set the record straight.’ Although he expressed admiration for Zong Qinghou, many found his piece to be impersonal and more focused on safeguarding his own image.

The same criticism goes for the company’s response to the “pro-Japan” issue. On March 7, they refuted ongoing accusations and stated that the architecture depicted on the controversial beverage packaging was inspired by Chinese temples, not Japanese ones, and that a text on the bottle is about Japanese tea culture originating from China.

 
Calls for Calmer Water
 

Although Weibo and other social media platforms in China have recently seen a surge in nationalism, not everybody agrees with the way Nongfu Spring is being attacked. Some say that netizens are taking it too far and that a vocal minority is controlling the trending narrative.

Posts or videos from people pouring out Nongfu water in their sink are countered by others from people saying that they are now buying the brand to show solidarity in the midst of the social media storm.

Online photo of netizen buying Nongfu Spring water: “I support Nongfu Spring, I support private entrepreneurs, I support the recovery of China’s economy. I firmly opposo populism running wild.”

While more people are speaking out against the recent waves of nationalism, news came in on March 13 that the 95-year-old mother of Zhong Shanshan had passed away. According to an obituary published in the Qianjiang Evening News newspaper, Guo Jin (郭瑾) passed away on March 11.

The obituary.

A screenshot of a WeChat post alleged to be written by Zhong Shanshan made its rounds, in which Zhong blamed the online hate he received, and the ensuing stress, for his mother’s death.

Wechat post, allegedly posted by Zhong himself, blaming the recent Nongfu Spring controversy and cyberbullying for the death of the 95-year-old Guo Jin.

While criticism of Zhong resurfaced for attributing the old lady’s death to “indescribable cyberbullying” (“莫名网暴”), some saw this moment as an opportunity to bring an end to the attacks on Nongfu. As the controversy continued to brew, the Sina Weibo platform seemingly attempted to divert attention by removing some hashtags related to the issue (e.g., “Zhong Shanshan’s Mother Guo Jin Passed Away” #钟睒睒之母郭瑾离世#).

The well-known Chinese commentator Hu Xijin (胡锡进) also spoke out in support of Nongfu Spring and called for rationality, arguing that Chinese private entrepreneurs are facing excessive scrutiny. He suggested that China’s netizens should stop nitpicking over their private matters and instead focus more on their contributions to the country’s economy.

Others are also calling for an end to the waves of attacks towards Nongfu and Zhong Shanshan. Chinese entrepreneur Li Guoqing (李国庆), co-founder of the e-commerce company Dangdang (once hailed as the ‘Amazon of China’), posted a video about the issue on March 12. He said: “These two [Nongfu Spring and Wahaha brands] have come a long way to get to where they are today. The fact that they are competitors is a good thing. If old Zong [Qinghou] were still alive today and saw this division, he would surely step forward and tell people to get back to business and rational competition.”

Li Guoqing in his video (since deleted).

Li also suggested that Zong’s heir, his daughter Kelly Zong, should come out, broaden her perspective, and settle the matter. She should thank netizens for their support, he argued, and tell them that it is completely unnecessary to exacerbate the rift with Nongfu Spring in showing their support.

But those mingling in the matter soon discover themselves how easy it is to get your fingers burned on this hot topic. Li Guoqing might have meant well, but he also faced attacks after his video. Not only because people feel he is putting Kelly Zong in an awkward position, but also because his own son. like Zhong Shuzi, allegedly holds American citizenship. Perhaps unwilling to find himself in hot water as well, Li Guoqing has since deleted his video. The Nongfu storm may be one that should blow over by itself.

By Manya Koetse

With contributions by Miranda Barnes

References

Tsui, Anne S., Yingying Zhang, Xiao-Ping Chen. 2017. “Chinese Companies Need Strong and Open-minded Leaders. Interview with Wahaha Group Founder, Chairman and CEO, Qinghou Zong.” In Leadership of Chinese Private Enterprises
Insights and Interviews, Palgrave MacMillan.

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