Nongfu Spring posts record sales amid escalating PR crisis

China’s biggest bottled water brand Nongfu Spring might be facing backlash from consumers, but its earnings never looked better.

The brand, run by China’s richest person Zhong Shanshan, generated 40 billion RMB (5.53 billion USD) in total revenue last year. This marks a new high for the Hangzhou-based company, which was founded by Zhong in 1996.

Breaking that down in more detail, the company’s full-year financial report released on March 26 highlights that revenue grew 28.4% year-on-year. Even more impressively, total profit attributable to shareholders stood at 12 billion RMB (1.66 billion USD) for the year, an increase of 42.2% from last year.

Master Kong, one of Nongfu Spring’s biggest competitors in the soft drinks arena, posted a higher revenue of 50 billion RMB, but Nongfu’s net profit was 10 times higher than Master Kong’s.  

The stellar financial results come amid a brewing PR crisis for the brand. Fiercely patriotic 7-Eleven employees in Jiangsu refused to sell Nongfu Spring products last month on the grounds its green tea packaging amounted to “flattery toward Japan”. The incident went viral on Chinese social media and many criticised 7-Eleven employees for the high-handed measure, which state media labelled “extreme”.

Although the internet ruled in favour of Nongfu Spring on this particular issue, the incident has roots in the public’s growing suspicion toward the company, particularly its founder and chairman Zhong Shanshan. The recent death of another beverage business mogul, Zong Qinghou, has unearthed some unfavourable comparisons. While the late Zong was known to be a fierce advocate for China on the international stage, Zhong, by comparison, has a US passport-holding son, indicating disloyalty toward China in the eyes of some.

While consumers seem to be actively looking for reasons to substantiate the claim that Zhong hates China and loves Japan, the businessman posted this withering rebuke on Weibo: “I never thought that after Mr. Zong passed away, there would be a lot of online slander against me and Nongfu Spring. This was definitely not what Mr Zong wanted to see.”


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