"To people in central and western China, because Future Cola is the first in the market, it is perceived as an authentic cola product," said a report in the Economic Observer. "On average, the cost of a bottle of Future Cola is 0.5 yuan (US$0.06) lower than the two other colas, giving it great market advantage."
Growing competition
But the competition is about to stiffen as Coke expands into rural markets and Future Cola goes after urban ones. Wahaha has stepped up advertising in big cities while Coke has distributed refrigerators with its logo and promoted a bottle refund program in rural areas.
Coca-Cola did not respond to several requests for comment.
Zong said he does not intend to advertise in the US or actively promote Future Cola. He will leave that to its distributor, tiny Manpolo International Trading Co, a small import/export firm based in New York's Chinatown. More than 14,000 cases of Future Cola will initially be sold in New York and Los Angeles and, using the patriotic appeal, target the overseas Chinese population.
Like many of China's large enterprises, Wahaha's ownership structure is murky. The company calls itself a "mixed ownership" company, part joint venture, part joint-stock, part state-owned. In 1996, French food giant Danone invested in five joint-ventures with Wahaha, injecting more than US$70 million into the company. Wahaha was able to upgrade its equipment and expand production.
Now 59, Zong's official title is general manager and chairman of the board, but everyone knows he's the only boss who counts. He tastes every new product and works 16-hour days.
In the face of ever fiercer competition, Wahaha is undertaking its first restructuring in 17 years to re-tool its employee incentive system.
Qu said the Chinese cola market is not yet saturated, but there is not much more room for it to grow. He described cola as being at a stage of "stable development" rather than "explosive development." Fruit drinks and dairy drinks will grow much faster, at a rate of about 30 percent annually, he said.
"Fruit and dairy drinks are comprising a larger and larger portion in the overall food structure in daily life," he said. "That's the trend in big and developed cities."
Fruit king
Coke has a juice drink called "Coo," but so far, no nationwide brand of fruit drink has emerged. Qu said it's possible for Wahaha, already the No. 2 seller of bottled water in China, to take that role.
Zong, who has only a junior high school education, admires Bill Gates, a Harvard dropout, and Li Ka-shing (
"Experts have done analysis and found that highly educated people aren't fit to be entrepreneurs," he said. "If you know too much, you might hesitate and not take a chance.
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