The Hangzhou Wahaha Group is a relative newcomer in the beverage industry. Founded in 1987, the company started by producing nutritional drinks for youth in Chinese schools. Holding contracts to supply schools gave the company a solid network of distribution on which to build its base. Wahaha children’s tonic became the company’s top-selling beverage and continued to make record profits year after year.
At a critical time in the Chinese governmental policy reform, the company made an aggressive expansion by acquiring a large, state-run factory that allowed the company to expand from 100 to 2,000 workers, significantly increasing its production capacity. Much of the company’s success derives from its fortuitous expansion into China’s southwestern regions. The Three Gorges area was impoverished and lacking industry, and the arrival of Wahaha brought 13,000 jobs, as well as the opportunity for the company to directly supply its product to the region.
In 1996, Wahaha partnered with French giant Danone to improve products and inject technology into the company’s production line. In less than five years, Danone recuperated their initial investment, and the Wahaha partnership became their most profitable global venture. However, their partnership grew tenuous due to ties to the Chinese Party, and after several years of disputes, the companies settled in 2009, ending their joint venture. The company’s current production exceeds 120 billion yuan (roughly US$17 billion) through its 70 subsidiary companies.
- Family name: Zong family
- Sector: Consumer Products & Retail
- Founded: 1987
- Founder: Zong Qinghou
- Country: China
- Company headquarters: Hangzhou, China
- Revenue: 7.6
- Employees: 45,000
- Website: wahaha.com.cn
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