Networth of China’s Richest Man, Zhong Shanshan, Decreases by US$13 Billion, Threatening to Dethrone Him from Top 1 Spot

China’s wealthiest individual, Zhong Shanshan, is on the verge of losing his top spot after nearly three years, as his fortune diminishes the most among global billionaires. His bottled water company, Nongfu Spring, has been grappling with heightened competition and various setbacks.

As of July 22, 2024, Zhong Shanshan, Chairman of Hangzhou-based Nongfu Spring, has seen his net worth decrease by US$13 billion, leaving him with a fortune of US$54.8 billion. He remains narrowly ahead of Colin Huang, founder of online shopping platform PDD Holdings, whose net worth stands at US$47.3 billion.

This shift highlights the increasing complexity of China’s consumer economy, which is marked by slowing growth and intensified competition from emerging brands. Nongfu Spring, listed in Hong Kong, has faced a significant price war in its core bottled water market, coupled with rising nationalist sentiments and health concerns among Chinese consumers.

Since February 1, Nongfu’s share price has dropped nearly 20%, while PDD’s shares have risen by approximately 6%, thanks to its low-cost products and aggressive promotions.

According to Ada Li, a consumer analyst, issues such as product quality concerns raised by Hong Kong’s consumer watchdog, increased competition amid reduced consumer spending, and a boycott linked to business practices have all contributed to Nongfu’s challenges.

Zhong’s wealth primarily stems from his stakes in Nongfu Spring and Beijing Wantai Biological Pharmacy Enterprise. Earlier in 2024, both the company and Zhong faced criticism following the death of Zong Qinghou, the founder of the rival Hangzhou Wahaha Group. Public sympathy for Zong transformed into criticism of Nongfu, with some online users accusing Nongfu of unfair tactics and questioning Zhong’s family’s allegiance to China due to his son’s alleged US citizenship. Despite Nongfu’s legal actions against these accusations, many Chinese netizens remained unconvinced.

In a further blow, China Resources Beverage Holdings filed for a Hong Kong listing in April, bolstering its bottled water brand C’estbon, one of Nongfu’s main competitors. Nongfu responded by launching a new purified water product at a highly competitive price, selling for less than one yuan per 550ml bottle on Tmall, significantly undercutting its usual price.

Although Nongfu reported robust sales of ready-to-drink teas in 2023, the revenue share from bottled water fell to 47.5% from 54.9% in 2022, reflecting growing competition.

Recently, Nongfu’s water was found to contain the maximum limit of bromate by Hong Kong’s Consumer Council, which raised health concerns. Although the council later clarified its findings, stating that they were based on incorrect criteria, Nongfu’s shares initially plunged by 7.3% before partially recovering.

To regain investor confidence, Nongfu announced in July that Zhong plans to buy up to $0.26 billion of the company’s shares through his holding company, Yangshengtang. Regulatory filings show that Yangshengtang purchased about 3.5 million shares on July 9.

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