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Nongfu Spring founder Zhong Shanshan responded to cyber attacks: Let it go, the day will surely come

This is Xuebei Finance352Original articles

Zhong Shanshan is not the kind of entrepreneur who is keen on manipulating his own persona. His style of doing things is similar to that of most entrepreneurs in the Jiangsu and Zhejiang areas of China. He is low-key, pragmatic, and hates publicity. He will never put himself in the spotlight unless necessary.

However, if his bottom line is touched, his counterattack will be like thunder.

I first met the founder of Nongfu Spring in 2013, when a Beijing metropolitan newspaper published a series of reports on drinking natural water standards for nearly a month, questioning the product standards of Nongfu Spring. This angered Zhong Shanshan, and he finally decided to defend himself in an extremely fierce way: holding a press conference to confront the media face to face, and all media willing to pay attention to the matter could participate in it on the spot.

In the highly competitive food industry, any doubts about product quality could have a fatal impact on a company, because consumers would rather believe in food safety incidents than not. Faced with this "most fatal" crisis, Zhong Shanshan has no intention of compromising.

I remember that in a huge conference room like a square at the China World Hotel in Beijing, the 58-year-old, gray-haired Zhong Shanshan stood alone in front of a table for more than three hours, answering questions from nearly a hundred media reporters. He did not ask other executives of Nongfu Spring to answer questions for him, and answered all questions directly, without beating around the bush or playing Tai Chi, but directly to the point. For an entrepreneur, it was actually an unbearable and uncontrollable scene, because there was a quarrel for the microphone in the audience, and the scene was even in chaos at the beginning.

I sat in the front row at that meeting, and for the first time I intuitively felt how desperate an entrepreneur would be to protect the reputation of the company he founded. It is difficult for me to remember the content of the Q&A session, but one sentence Zhong Shanshan said still impressed me:

"Nongfu Spring's dignity is more important than money, and we will never bow to the violence of public opinion."

On that occasion, Zhong Shanshan believed that his opponent was a media outlet and the mastermind behind it. He regarded this as the "most deadly" threat to Nongfu Spring, so he had to take the most intense "response" approach.

If the public opinion storm 13 years ago was a meaningful debate, then the attacks and even personal attacks on Zhong Shanshan on Chinese social media sites 13 years later were completely unprovoked. The many reasons for attacking him and even the absurd rumors made people laugh and cry. For example, some netizens accused Nongfu Spring's red mineral water bottle cap of looking like a red sun, and the main element of the Japanese flag is a red sun. A large network of populists then attacked the company and its founder Zhong Shanshan for having a pro-Japanese complex.

Such a ridiculous cyber attack lasted for several weeks. The scale of the attack was worrying and caused real damage to the reputation of the company. In China, labeling an entrepreneur as disloyal to the nation is almost equivalent to destroying the reputation of an entrepreneur for life. And the entrepreneur cannot even make a strong defense against such an attack. Because this is a false accusation. In March 2024, Mr. Zhong's elderly mother even died suddenly because her son suffered such inexplicable cyber violence.

In fact, in addition to Zhong Shanshan, there are too many entrepreneurs, especially private entrepreneurs, who have suffered similar attacks. When short video traffic platforms prospered explosively, such low-intelligence and extreme speech was able to spread without limit. Many short video platforms were happy to see this happen, and even contributed to the proliferation of such speech. They allowed the algorithm to "lure" more users to post similar extreme speech through traffic distribution like a virus.

Most of the public has never had a complete and adequate understanding of the founder of Nongfu Spring, even though he is so popular, he is so low-key. In the past 13 years, he has hardly appeared in public opinion.

On the evening of August 10, 2024, Zhong Shanshan accepted an in-depth interview with CCTV's "Dialogue" program. He rarely expressed his values ​​and business philosophy as an entrepreneur in a relatively comprehensive manner. He also talked about Nongfu Spring and his own thoughts after being subjected to online violence in the past few months, about wealth and responsibility, the good and evil of traffic, the speed of doing business, and heirs. He said that if he had to label himself, he hoped that he would be "an idealist."

1. Wealth and Responsibility

Just two days ago, on August 9, Zhong Shanshan finally stopped being China’s richest man, replaced byPinduoduoFounder Huang Zheng. Regarding wealth, it is a topic that entrepreneurs in China avoid talking about, because in the eyes of public opinion, they are able to accumulate wealth because of "letting some people get rich first", so it is necessary to "let the rich lead the poor".

Zhong Shanshan agrees with this view. In fact, Zhong Shanshan is not born into a wealthy family. He dropped out of school at a young age and only attended primary school for 4 years. After that, he worked as a migrant worker for 17 years. He is the first generation of migrant workers in the true sense of the word in China. In order to support himself, he worked as a handyman and carpenter for a mason. After the college entrance examination was resumed, he took the exam twice and the results were not ideal. It was not until he was nearly 30 that he had a small turnaround in his fate and had the opportunity to work as a reporter reporting on rural areas at a local newspaper.

"My first job was as a stonemason in Qianshanyang, Huzhou. I didn't have rain boots, so I worked barefoot in the December water. Without my mother's constant encouragement, I might not have been able to persevere. The coldness that pierced my bones will be unforgettable for me." On Mother's Day, May 12, 2024, Zhong Shanshan posted a long article on WeChat Moments to mourn his mother. He said that it was his mother who taught him to endure hardships.

Starting from scratch, after decades of unimaginable hardships and risks, Zhong Shanshan was able to build a business empire with his diligence and opportunities given by the times. Nongfu Spring is now the company with the highest market share in China's drinking water industry, and as the company's largest shareholder, Zhong Shanshan has been able to accumulate some wealth.

In the "Dialogue" program, the host Chen Weihong told Zhong Shanshan, "Some people say that the richest man seems to be a high-risk word." Zhong Shanshan's response was:

"I am very confident about my outcome. First, I started from scratch, and every dollar I made is clean. Second, I pay taxes according to the law. Third, you can investigate the upstream and downstream suppliers (of Nongfu Spring) and find out how much profit Zhong Shanshan retains for them. Fourth, the welfare and treatment of employees. Of course, I still have room for improvement, but at my current level, I am satisfied with myself."

Regarding wealth itself, Zhong Shanshan also expressed his own view: wealth is a kind of praise from consumers or the market to an entrepreneur. He believes that China has leaped from agricultural civilization to industrial civilization in one step, and the three hundred or four hundred years in between have been shortened to thirty or forty years, which has led to the lack of sufficient interpretation of the enlightenment, understanding, meaning, responsibility, value and behavior of wealth in this process.

Zhong Shanshan believes that the wealth of entrepreneurs includes responsibility, and this responsibility should be concrete and executable altruism. "This is a must. When we evaluate the word 'wealth', it is a kind of society and a kind of good element. We should guide it, praise it, and encourage it to become a force for good."

Even though decades have passed since he changed his identity from a migrant worker to an entrepreneur, Zhong Shanshan still has a deep affection for farmers. He said, "My experience is that of a farmer. My experience makes me think more about farmers. I do what I can do within my knowledge. (America's richest man) Musk has done those earth-shattering things. I am not so earth-shattering, but I have also done some things that are suitable for me. I am a farmer myself, so I have a special feeling for farmers."

In Nongfu Spring's business, there is a business that has not made a profit for eight years, namely orange juice. The upstream of the orange juice business is the vast rural areas and farmers in southern Jiangxi. There are more than 70,000 orchards in Ganzhou alone, and 93% of the orchards are owned by small farmers.

In the "Dialogue" program, the host asked Zhong Shanshan, "Many people would find it hard to understand that you can make money in the water industry, but you chose to enter the agricultural field and enter an environment where you rely on the weather for your livelihood. What were the considerations behind your initial decision?"

In 2007, Zhong Shanshan went to Ganzhou, where a local county magistrate hoped that Nongfu Spring could set up an orange juice factory to help solve the sales problem of navel oranges grown by local farmers. However, when Nongfu Spring decided to invest, it soon encountered a life-and-death problem, which turned the investment into a hot potato. Zhong Shanshan found that these navel oranges were not suitable for juicing, because they had to be sterilized before storage, and the sterilization process would make the navel oranges have a cabbage-like odor.

In order to solve this problem, Zhong Shanshan personally traveled half the world to find a technical solution. From Spain, Portugal, the Netherlands, Brazil, and finally to Florida in the United States. "I have a requirement for myself, which is to do wrong things right. Even if this thing is wrong, if you decide to do it, you have to do it right. Since I have started this thing, I must have a period, and I will not stop at a comma." Zhong Shanshan said.

It took seven years to solve this problem. But soon, orange trees in southern Jiangxi were hit by the Huanglongbing disease. Huanglongbing is known as the "cancer of citrus". It is a serious disease that seriously harms citrus plants. Because of its strong infectiousness, the infected plants have no medicine to cure and can easily destroy the orchard. According to Zhong Shanshan, the navel orange planting industry in rural Ganzhou was in ruins at that time.

"You have to know that for an industry to develop over 1 million mu, the local government has spent an unknown amount of money. I know that in the poorest areas of Ganzhou's old revolutionary base, cadres took the lead. Each cadre contributed 30,000 to 50,000 yuan to plant 3 mu of land, and then the farmers followed suit. However, within three years, the orange fields were flattened due to Huanglongbing, and everything had to start from scratch."

In order to solve the problem that fruit farmers were not willing to grow navel oranges due to concerns about risks, Nongfu Spring signed 4,300 long-term contracts with fruit farmers at the time, with a minimum purchase price as a guarantee, raising the original purchase price of a few cents and a maximum of 1.5 yuan to 2.8 yuan to ensure the income of fruit farmers. The premise is that fruit farmers must follow Nongfu Spring's standardized planting method, and Nongfu Spring guarantees purchase. This also solves the problem of standardization and planting technology of orange planting.

Zhong Shanshan said, "Because I am a farmer myself, I know the farmers' hearts very well. Farmers are willing to share hardships with you. But after sharing hardships, can we share prosperity? In other words, after your industry develops, you start to lower prices when there is a good year, and start to raise prices when there is a bad year. The farmers are unhappy. Therefore, your industrial policy must have price guarantees and contracts. In fact, farmers are a group of people who abide by contracts."

17 years later, the planting area of ​​Nongfu Spring's cooperative orchards in Ganzhou has grown from 1.5 million mu to 2 million mu. The fruit farmers there have also transformed from agricultural farmers to agricultural workers, and the skills they have mastered are even comparable to those of experts at the Citrus Research Institute.

A data shows that before the establishment of the Nongfu Spring 17.5° brand in 2014, the annual income of many farmers in southern Jiangxi was still hovering at the level of just getting out of poverty. But by 2023, the average income of each farmer who cooperated with Nongfu Spring had increased to nearly 200,000 yuan.

Mutual support and interdependence with farmers and agriculture is not only in the orange juice business, but also in Nongfu Spring's main business of bottled water. In mid-June 2024, I visited Nongfu Spring's water source in Mount Emei, Sichuan. This is the most difficult and time-consuming location for Nongfu Spring among all the water sources in the country. In the factory at the foot of Mount Emei, the vast majority of workers employed by Nongfu Spring are farmers from villages near Mount Emei. They serve the factory to the best of their abilities and receive salaries above the local average.

Zhong Shanshan said in the program "Dialogue" that the reason why he chose to find a water source and build a factory in Mount Emei was after the Wenchuan earthquake in Sichuan. "Due to the 2008 earthquake, no company could divert water in because the roads were problematic. After the earthquake, we did two things. The first was to build a factory in the local area. Building a factory has two benefits. The first is to solve the poverty problem of local farmers, because the factory can bring jobs. As long as one farmer's family is employed in the factory, the problem is solved."

The water source of Mount Emei was found by Zhong Shanshan himself. He and another colleague climbed over mountains with a slope of 70 degrees and found the water source in the cracks of the rugged earthquake zone of Mount Emei. The most dangerous time was when they almost slid down the cliff. In fact, Zhong Shanshan had to check the outlet of every water source of Nongfu Spring himself. The water source in Guangxi is in a deep mountain canyon. The local county magistrate even strongly prevented him from entering because it was too dangerous. In order to find the water source in Jiaozi Snow Mountain in Yunnan, Zhong Shanshan rode a donkey and a horse.

2: The Good and Evil of Traffic

Because he does not participate in various entrepreneurial circles or public conferences and maintains a low-key and solitary style of doing things, Zhong Shanshan was described by the outside world as a "lone wolf" at an early age.

However, even if he keeps a low profile, Zhong Shanshan is not uncommon for controversies, from the "Water War of the Century" over purified water and natural water in 2000, to the "Standard Gate" incident in the summer of 2013 mentioned in this article, to the series of online violence he suffered in 2024, mainly based on rumors.

In the program "Dialogue", the host asked Zhong Shanshan, "Are you a controversial figure? Why are there always so many controversies surrounding you?" Zhong Shanshan's reply was, "If a person is one step ahead, he may be the best. If he is two steps ahead, he will be controversial. If he is three steps ahead, he will be criticized."

Because of his extremely low-key style, the word "traffic" seems to have nothing to do with Zhong Shanshan. However, after being named the "richest man", his every move will be forced into the spotlight at any time. Especially when short videos become the main form of communication. In the past few months, traffic has attracted some video bloggers, because any topic involving Zhong Shanshan or Nongfu Spring can attract traffic.

This time, the traffic was mixed with more evil than good. Zhong Shanshan, who was caught up in it, was also confused by this. He said that after experiencing this online storm, he would rethink:

"I really re-thought, what is the responsibility of the richest man? The richest man has responsibilities, because society's requirements for you are different, so for many things, for example, we used to do a lot of altruistic things, in my mind (I think) if you do good for the sake of being seen, then it is not true goodness. If you do good things for others to know, then it is not good, because you are hypocritical."

Now, he has changed his view. He believes that under traffic, if good deeds are misunderstood, traffic will become a force used by "evil". "If the word 'traffic' carries information without a responsible person, that is, traffic does not bear legal responsibility in the public opinion environment, then traffic must be a kind of evil."

Zhong Shanshan quoted the story of Li Bing and his son who controlled the floods at Dujiangyan, saying, "If this traffic allows some people to have private purposes, or to make money, and use technology to exploit the weaknesses of human nature, and deliberately create traffic potential and conduct large-scale disordered network, it will be like a water dragon, and to a certain extent it will be destructive." Among them, the water army and platform algorithms have shown a strong destructive power.

In the online violence against Zhong Shanshan and Nongfu Spring, the traffic controlled by the Internet trolls and platform algorithms showed more destructive power than good. Zhong Shanshan believes that when this destructive traffic prevents the truth from coming out in time, society will suffer tremendous pressure. "So in this process, the law needs to act quickly and not intervene later after the damage has been done." He gave an example, saying, "If Li Bing and his son waited until the Chengdu Plain was flooded before building the Dujiangyan, it would be too late."

Regarding the current public opinion that is held hostage by traffic, Zhong Shanshan chose to reconcile with himself. He is unwilling to pay attention to it and firmly believes that there will be an "idealistic" destination. He said:

"The stigma against me will never be washed away in my lifetime, I accept it calmly, doing my own thing is more important than washing away the stigma." "I do my thing, I have my own ideals in my heart, because in the end the day will definitely dawn, but it just dawns a little late, as long as I can hold on until dawn, because many people can't hold on until dawn, he jumped off the building, but I can do it."

3. Business Succession

Nongfu Spring has been established as a company for 28 years, and Zhong Shanshan will soon turn 70. He was born in 1954. Among Zhong Shanshan's family members, publicly available information shows that his son Zhong Shuzi joined Nongfu Spring in January 2014, served as a non-executive director in June 2017, and served as the general manager of the brand center of Yangshengtang, the largest shareholder of Nongfu Spring, in January 2020. In addition, Zhong Shuzi is also a member of the audit committee of Nongfu Spring.

However, Nongfu Spring once stated in an announcement that as a non-executive director, Zhong Shuzi "has not and will not participate in our daily operations" and that he only participates in the formulation of corporate and business strategies and the decision-making process of major events by attending board meetings.

In the "Dialogue" program, Zhong Shanshan talked about the topic of succession of this company for the first time. The host asked him, "Do you have someone in mind now?"

Zhong Shanshan's reply was: There are two types of successors for an enterprise. One is at the enterprise level, which is cultural inheritance, system inheritance, and value inheritance. About 20 years ago, we determined our values, namely "creating profits, educating people, and benefiting the world", and we attach great importance to system design. System inheritance must be placed before ownership inheritance. System inheritance and cultural inheritance are greater than ownership inheritance and are the most important.

When the host asked him, "There is a saying in the market that Nongfu Spring may be passed on to the second generation of American citizens, and it may not be a Chinese company in the future. Is this true?" Zhong Shanshan raised his voice and told the host word by word:

"I believe that Nongfu Spring will always be an excellent Chinese company. I repeat, Nongfu Spring will always belong to China. Therefore, the equity structure of Nongfu Spring is very simple. Nongfu Spring does not have any island companies, so its value chain is very short and its equity structure is very simple. I would not have failed to consider this matter at the beginning. I must have considered the most important ownership issue very clearly."

Unlike most listed companies in China, especially those listed on the Hong Kong Stock Exchange or overseas exchanges, Nongfu Spring registered its listing entity in mainland China, specifically in Zhejiang Province, rather than in the Cayman Islands or other offshore jurisdictions. From any legal perspective, it is a Chinese local company.

As for who will take charge of Nongfu Spring after Zhong Shanshan, at least for now, there is no conclusion. He said that who will take over will remain unclear. "Because this is a big company, all big companies want to keep it in a competitive stage forever, so they have to keep it secret, so that everyone thinks I have a chance."

"Until I think their abilities make me look like I can trust them and I can hand over the baton," Zhong Shanshan said. In his eyes, the most unacceptable quality of this successor is "hesitation", that is, "discussing but not deciding, and not being decisive."

He believes that the qualities of a successor include, first of all, being kind and smart; secondly, being altruistic; and finally, being innovative, not following the old ways and daring to break the rules.