Zhong Shanshan, known as China’s “bottled water king” and chairman of Nongfu Spring, recently voiced strong criticism against some hefty players in China’s tech landscape.
Business Brawl: Nongfu Spring’s Zhong Takes on China’s Tech Giants
At a business conference in Ganzhou, Jiangxi, Zhong called out Pinduoduo, a major player in ecommerce China, for its pricing strategy that he claims is damaging to local brands and industries. “Pinduoduo’s pricing system is a huge harm to Chinese brands and Chinese industries,” he argued, spotlighting how such tactics can undercut traditional business values.
The Price War Impact
It’s clear that Pinduoduo’s low-cost approach has reshuffled the market dynamics, snatching significant market share from giants like Alibaba and JD.com. This aggressive pricing is not just a fight for market share; it’s sparking a broader price war, squeezing the profit margins across the board. Such strategies often challenge digital agencies in China that work to balance branding and profitability for their clients.
Next Day, Another Target
The very next day, Zhong shifted his focus to another tech behemoth – ByteDance. He expressed his disappointment with the lack of response from Zhang Yiming, ByteDance’s founder, regarding a smear campaign against Nongfu Spring orchestrated on platforms like Douyin and Toutiao—both owned by ByteDance. This incident highlights the pivotal role of social media in China in shaping public perception and brand reputation.
“I hope Mr. Zhang Yiming, Douyin, Toutiao, and all the media that have hurt me personally with rumors will apologize,” Zhong demanded, showing his frustration over the uncontrolled power of social media narratives.
Responding to a Tough Year
Zhong’s clash with tech giants caps off a rough year for both him and Nongfu Spring. Earlier, a wave of nationalism charged Nongfu for using imagery seen as too Japanese, igniting fierce backlash and boycotts on social media in China. The company’s market value plunged by about 30 billion Hong Kong dollars during this turmoil.
Additionally, a squabble with the Hong Kong Consumer Council over water safety standards later in the year further challenged the brand, though the council eventually aligned their standards more closely with those recognized by mainland China and international bodies.
The disputes and downturns of 2023 serve as a stark reminder of the volatile nature of operating in such a dynamic market. With the year nearing its close, industry watchers and consumers alike will be keen to see how Zhong and Nongfu Spring manage to navigate these choppy waters moving forward.
