Zhong Shanshan, China’s richest person, knows the value of a corporate reputation. He built Nongfu Spring, his bottled water company by arguing that he got his water direct from the source, making it better than his competitors. “The reputation of a company in the market economy is greater than its fixed assets,” he told Hong Kong television in 2015. “If the reputation is bad, nothing can be sold.”
Nongfu Spring is getting a lesson in that now, as the brand is targeted by nationalistic social media users in China accusing the bottled water company of being pro-Japan.
On Chinese social media platforms, users are filming themselves pouring Nongfu water into the toilet, or using it to clean the floor.
Nongfu’s crime? Allegedly using Japanese-style images on its bottles. Nongfu, for its part, says the design on its packaging are artistic creations based on the architecture of Chinese temples.
The recent death of Zong Qinghou, the founder of competing brand Wahaha, could also be fanning the social media frenzy. Some accuse Zhong of undermining his former partner, Zong. (Zhong used to be a sales agent for Wahaha.)
Two 7-Eleven stores in Jiangsu province said on Friday that they would pull Nongfu’s products from their shelves. Sales have fallen in the past two weeks, according to Bloomberg citing domestic media.
The social media furore over Nongfu Spring is helping its competitor Wahaha, as users sharing posts of them consuming Wahaha’s products with calls to support the brand over Nongfu.
Nationalist shoppers have previously attacked foreign brands for allegedly slighting China. Chinese users attacked Dolce & Gabbana in 2018 for an advertisement featuring a Chinese woman eating Italian food with chopsticks; the fashion brand is still dealing with the repercussions today.
Users also boycotted H&M in early 2021 following the fashion retailer’s decision to stop using cotton from Xinjiang.
More recently, Chinese internet users were furious over a photo on Apple’s website, featuring a customer service agent with a pigtail hairstyle, which users believed played into anti-Chinese stereotypes. Nationalist Chinese users accused Apple of trying to insult China—despite the fact that Apple used the photo globally. Apple later confirmed to Chinese media that the employee in question was Native American and based in California.
Chinese internet users also calling for boycotts of Japanese beauty products and other goods from the country to criticize Japan’s decision to release treated wastewater from the Fukushima nuclear power plant. Beijing also suspended imports of Japanese seafood following the release of the treated wastewater.
But the outcry over Nongfu Spring shows that domestic brands aren’t immune from nationalist criticism. Even Huawei, the country’s tech champion, faced social media questions as to why it named its homegrown smartphone processor “Kirin,” after the Japanese mythical creature, according to Nikkei Asia.
The controversy is taking a toll on Nongfu’s shares. The drinks company lost about 30 billion Hong Kong dollars ($3.8 billion) in market value over the past two weeks, though shares have recovered slightly since the weekend.
Who is Zhong Shanshan?
Zhong has a net worth of around $63 billion, according to estimates from Bloomberg, making him China’s richest person. (The second richest person in China, according to Bloomberg, is ByteDance founder Zhang Yiming with a fortune of $42.3 billion)
He got his start in journalism, working as a reporter in Chinese state-owned media in the 1980s. But he quickly pivoted to business, selling a variety of goods ranging from mushrooms to nutritional supplements.
Zhong turned his attention to water in 1996, launching Nongfu Spring in his hometown of Hangzhou. His capitalized on the poor drinking quality of China’s tap water to grow his business, positioning the brand as providing high-quality drinking water direct from the source.
In addition to bottled water, Nongfu Spring also sells other products like ready-to-drink tea, fruit juices, and coffee.