OVERVIEW

Hangzhou Wahaha Group: Founded in 1987 in Zhejiang province, Wahaha (the sound of laughter in Chinese) is China’s largest beverage company. The company has over 150 subsidiaries in 29 provinces, with total assets of 30 billion yuan [US$4.83 billion] and 30,000 employees (as of early 2013). The company produces milk drinks, carbonated soft drinks, juice drinks, tea drinks, health-care foods, canned foods and bottled drinking water (Wahaha products). Zong Qinghou is the founder, Chairman and CEO of the company.

TIMELINE

1987: The sales department of school-run business of Shangcheng District of Hangzhou, the predecessor of Wahaha, was set up. Mr. Zong Qinghou, the founder of Wahaha, together with other two retired teachers started business from selling frozen sucker with a loan of 140,000 yuan.

1989: Wahaha Nutritional Food Factory was founded to produce “Wahaha Oral Liquid for Children”, a type of natural beverage product with medicinal properties.

1991: Hangzhou Wahaha Group Corporation was formed when the Wahaha Nutritional Food Factory (with the support of the Hangzhou government) merged with the Hangzhou Canning Food Factory.

1994: Wahaha merged with three insolvent companies in Fuling, Sichuan province, to set up its first factory in Chongqing. The location provided Wahaha with a manufacturing base in western China, enabling the company to reduce distribution costs.

1996: Wahaha joined with France’s Groupe Danone SA to form five new subsidiaries, of which Danone owns 51% and Wahaha the remaining 49%. The partnership turned sour and resulted in Wahaha winning a series of bitter lawsuits with Danone over control of the Wahaha name. Danone and Wahaha have since reached a settlement and dissolved their partnership.

May 1998: After a 2-year research and development period, Wahaha launched China’s own cola, “Wahaha Future Cola,” challenging Coca Cola and Pepsi Cola. The flavor of Future Cola was tailored to the Chinese palate and targeted for the rural market.

2002: Wahaha entered the children’s clothing sector as its first step towards product diversification.

November 2012: Wahaha enters the retail market and opens WAOW Plaza in Hangzhou, a high-end department store covering European boutique furniture, watches and clocks, jewelry, branded clothes, children’s products and food.

Sources: China Business Review 2004, China Daily Jan 2013 and Morning Whistle Nov 2012

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