Nongfu Spring need not suffer widespread criticism across the internet; in fact, the company has not become a completely innocent victim. In an era filled with vitality and challenges in the private economy, growth is not easy, and business development often comes with some aggressive competitive strategies. The public both expects companies to become pillars of the industry and criticizes those with flaws. From a business perspective, such criticism can actually be positive.
Since the death of Wahaha founder Zong Qinghou, the company has experienced explosive growth in popularity. Media data shows that the company’s official flagship store’s sales surged by 500%, and its Douyin account gained 1.63 million followers within a week. The official announcement urged consumers to stay rational. Meanwhile, Wahaha has become a symbol of wild consumption.
Contrarily, Nongfu Spring faces a more severe situation. The continuously declining stock price, significantly reduced market value, and the sharp decline in sales at the official flagship store—all these phenomena indicate that Nongfu Spring is facing serious challenges. Public scrutiny of Nongfu Spring fills the internet, digging up various rumors from the past.
Although Zhong Shanshan has attempted to explain the relationship with Wahaha, including the early sources of wealth and later reconciliation between the two sides on product disputes, this seems to have not quelled the public’s doubts. In the controversy, the biggest accusation is labelling him as a betrayer of Wahaha. However, Zhong Shanshan was not always employed by Wahaha; he was once a journalist who later turned to business, eventually connecting with Wahaha in the early ’90s.
It is worth noting that Zhong Shanshan first acted as a distributor for Wahaha’s nutritional oral liquids in the Guangxi and Hainan regions, not as a formal employee of the company. At the beginning of the Hainan Special Economic Zone, due to sluggish sales, Zhong turned his attention to Zhanjiang in Guangdong and decided to sell the products there in violation of regulations, an act later deemed as illicit “channel stuffing”.
In a recent public response, Zhong Shanshan denied involvement in a controversial past period. Despite the internet still having information on the past issues between Zhong Shanshan and Zong Qinghou, including rumors of their unpleasant relationship and relevant descriptions in some media reports, there is a lack of concrete evidence to show that Wahaha had cancelled its cooperation with Zhong Shanshan as a result of these issues.
For readers who have read the work “Blooming Flowers,” it’s not difficult to understand the scene of the rapid expansion of the market economy in the 1990s. As Zhong Shanshan explained, the management style at the beginning of the market economy was generally extensive, and at that time modern sales concepts such as channel management and channel stuffing were hardly popularized.
Zhong Shanshan is undoubtedly one of the representatives of the extensive style of the advertising industry of that era. His advertising ideas, though often criticized as overstated, nonetheless struck a chord with consumers and often achieved unexpected results. For example, in 1993, his “Yang Sheng Tang” successfully marketed the health product “Turtle and Tortoise Pills” for the middle-aged and elderly with the slogan “There’s no greater debt than parental kindness,” breaking sales of ten million. In the more well-known “Bottled Water Wars,” Nongfu Spring broke the market’s traditional pattern and created the iconic slogan: “We do not produce water; we are merely nature’s porters.”
In the late 1990s, the main competitors in the domestic bottled water market were Wahaha, endorsed by Wang Leehom, and Robust pitching its “27-stage purification” technology. Zhong Shan Shan innovatively strategized to earn a place for Nongfu Spring in this market. He introduced the concept of “natural water” to the market—unlike treated purified water, natural water comes from nature and is rich in minerals, making it healthier.
With this concept in play, Nongfu Spring’s task was to establish the image of natural water in consumers’ minds. Nongfu Spring not only announced it would cease production of purified water to switch to natural water production, but also promoted the benefits of natural water through various educational campaigns. In advertisements at the time, they even conducted a comparative experiment, claiming that daffodils grew more lushly in natural water than in purified water.
In response to this kind of publicity, Zong Qinghou expressed disdain, once bluntly stating, “Daffodils grow well even in feces water, does that mean feces water is superior to purified water?” During this period, 69 purified water producers, including Wahaha and Robust, united to issue a statement demanding Nongfu Spring stop its derogatory promotions against purified water. The two sides even sued each other, though in the end, Nongfu Spring was fined 200,000 yuan for unfair competition.
However, after a prolonged publicity blitz, views like “purified water is not suitable for long-term consumption in large amounts” gained many supporters. Nongfu Spring gradually secured a place in the market with this wave of media coverage, eventually becoming an industry leader. Although competition among bottled water brands never ceased, the challenges and competition Nongfu Spring faced continued. Master Kong’s introduction of “mineral water” with competitive advantages of low price and high-quality water sources is an issue that Nongfu Spring has to take seriously in subsequent market competitions.
Nongfu Spring actively participated in market competition, highlighting the uniqueness of its products, claiming a viewpoint contrary to conventional wisdom: “Alkaline water is more beneficial to health than acidic water.” Looking back at the development of the water product market, we can see various brands trying to judge the quality of water from different perspectives. In 2016, Jinmailang led a trend by launching the influential “cooled boiled water,” promoting that “cooked water” is superior to raw water. Then by 2022, Nongfu Spring also launched its own “boiled water.” Although seen as a trend-following move, it reaffirmed the idea that a simple concept of a product can demonstrate layers and differences through continuous deepening and refinement.
Wahaha once again became a hot topic in the industry in 2024, as its bottled water was chosen by laboratories for its high purity. The market’s enthusiasm and recognition resurfaced. However, the science popularization platform Dingxiangyuan pointed out that relying on the minerals in water to meet human needs is not realistic. As long as water meets physiological needs, in reality, drinking any water is the same.
Creating hot market products using concepts has become an unwritten contract among enterprises. In this brutal business competition world, being seen by the public is often the first step to success. The internet, this silent museum of history, records every moment of change; there are always people trying to piece together fragments of history, praising those hardworking and innovative pioneers.
Speaking of Nongfu Spring’s diversified product line, besides its well-known bottled water, there are also tea beverages, functional drinks, and juices, etc. For example, brands familiar to consumers such as Nongfu Orchard, Scream, and Water-Soluble C100. Among them, the highlight is undoubtedly Dongfang Shuye (Oriental Leaves)—the sugar-free tea drink launched by Nongfu Spring in 2011. At that time, the beverage market was full of sweet beverages, with consumers generally pursuing taste and coolness. Even though similar products like Unity Tea King and Coca-Cola’s original leaf series failed to impress the market, Zhong Suan remained optimistic about the sugar-free beverage market.
At a time when many similar products failed to gain a foothold in the market, Dongfang Shuye persisted and became popular as consumers’ health awareness increased. In 2016, Yuanqi Forest made a breakthrough in the sugar-free beverage market with the slogan “0 sugar, 0 fat, 0 calories.” However, as controversial studies on artificial sweeteners emerged, consumers began to turn to truly sugar-free drinks. In this trend shift, Dongfang Shuye, which had been waiting, seized the opportunity. Since its launch, Dongfang Shuye has become a leader in the industry over ten years.
Since 2018, Dongfang Shuye’s sales have grown steadily, taking the lead in the sugar-free tea market in 2019. Nongfu Spring’s tea beverage income reached 2.182 billion and 3.307 billion yuan in 2021 and 2022, respectively. Astonishingly, in just the first half of 2023, its income surged to 5.286 billion yuan, with a growth rate of 59.8%, nearly equal to the total income of the previous two years.
Dongfang Shuye keenly sensed the changes in market demand, and in recent years, it has successively launched a variety of new flavors such as green tangerine Puer, brown rice tea, and osmanthus oolong, which have been well-received by many consumers.
The degree to which consumers welcome it can be seen from some customers buying it by the case, drinking it daily, young people using it to make low-calorie beverages, and middle-aged people considering it a health tea. Once this so-called “Oriental Magic” craze exploded, it became unstoppable. Its success is no accident; Dongfang Shuye had a profound market layout since its inception.
In terms of product positioning, it adopted a pure concept of “zero sugar, zero fat, zero calories, zero artificial flavors, zero preservatives,” which greatly enhanced the production technology requirements. To ensure this, in 2011, Nongfu Spring Group invested a huge sum to introduce the first domestic Log6 grade aseptic cold filling production line and applied for over 20 patents related to “aseptic technology,” ensuring the stability of the color and flavor of tea.
In the fierce market competition, where other sugar-free tea brands choose opaque packaging to conceal the color changes resulting from tea oxidation, Eastern Leaves confidently presents its clear tea color directly to consumers.
As for brand naming, there is also considerable strategy involved. The name “Eastern Leaves” not only conveys that the drink is made from real tea leaves rather than tea powder but also promotes the story of Chinese tea culture going global through packaging and advertising. This narrative grasp of modern consumer interest is just right.
In the industry, Nongfu Spring is recognized for its consistent spirit of innovation. Despite past competition and discord with other brands, it never lacked mutual respect in the industry. For instance, when Nongfu Spring’s products were involved in a quality controversy due to an erroneous test in 2009, Zong Qinghou, from rival Wahaha Group, publicly expressed support.
Faced with challenges, traditional beverage companies have no choice but to compete with emerging consumer brands like Yuan Qi Forest, Heytea, and Nayuki. In recent years, as raw material costs have risen, beverages priced below 5 yuan have become scarce in the market, posing new pressures and challenges for both traditional and emerging beverage companies.
In the ruthless battlefield of business, no company can stay on top forever. Back in the day, Wahaha’s AD Calcium Milk seized the great opportunity in the children’s nutrition market, creating the memorable slogan “Drinking Wahaha makes meals more delicious,” capturing the hearts of countless children and parents. The classic and unchanging taste has brought Eastern Leaves back into the public eye, regaining consumer favor. Nowadays, even milk tea products clearly label their ingredient lists, catering to increasingly discerning consumer tastes.
It’s worth noting that in the recent public opinion storm, the situation of Nongfu Spring should neither be considered complete injustice nor should it suffer universal disdain. After all, product innovation and marketing strategies were crucial for the growth and development of a company in that competitive era. Today, consumer expectations towards corporate products and behavior have significantly changed, not only wanting companies to be industry pillars and driving forces of the market economy but also desiring to see the growth stories and maturity behind their success.
In an era where advertising skills are increasingly sophisticated, Nongfu Spring, which once rose to fame through advertising, is more prone to consumer scrutiny as if through a magnifying glass. In fact, whether it’s Wahaha or Nongfu Spring, they have their own business strategies and brand philosophies, and there’s no need to overly idolize or vilify them. Even Mr. Zong Qinghou, the founder of Wahaha, admitted before his death that the company lacked in innovation. The unchanging truth is that for consumers, the quality of the product is always the most crucial factor.
Mr. Zong Qinghou stated in an interview in March 2023, “Product hype is not very meaningful; the most fundamental is still dependable product quality.” Similarly, a year later, Mr. Zhong Shaoshan wrote in response to related public opinions, “Whether it’s Wahaha or Nongfu Spring, we always insist on producing high-quality products for the common people.”
It is noteworthy that the Japanese unsweetened tea brand Suntory faced a market boycott due to the 2023 Japanese radioactive wastewater discharge incident, leading many consumers to turn to support the local brand Oriental Leaves, indicating a shift in consumer awareness and the rise of domestic brands.
In the final chapter of the business battle, the pursuit should not be solely for the moral high ground. After all, any brand that is elevated to the pinnacle could potentially lose its halo in the near future. The destiny of the business world is an endless cycle of rises and falls.
