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Zong Qinghou, the self-made billionaire who became China\u2019s richest man by wresting control of the country\u2019s top beverage brand from Danone<\/a>, has died. He was 79.<\/p>\n The founder and chairman of Wahaha Group died of illness at a hospital at 10:30 a.m. on Sunday, according to a\u00a0statement<\/a>\u00a0that doesn\u2019t provide further details on the cause of death or the location of the medical facility. The company said on Feb. 22 that Zong was hospitalized for treatment and was in stable condition.\u00a0<\/p>\n Born before the Communist Party took power, Zong\u2019s life paralleled China\u2019s transformation from a poor and mostly-agrarian country into the world\u2019s factory floor and its second-largest economy.\u00a0His wealth<\/a>, which began with a $22,000 family loan, grew into billions of dollars as Chinese people became ever more voracious consumers.<\/p>\n Zong, who never attended high school, was forced to live on a farming commune in 1964 during Mao Zedong\u2019s Cultural Revolution. He left in 1978, the year that Deng Xiaoping \u2014 having consolidated power as China\u2019s paramount leader \u2014 began introducing private business and foreign investment to China, freeing up a generation of entrepreneurs like Zong to dabble in capitalism.<\/p>\n After working as a consumer goods salesman for several years, Zong took over a small shop at a grade school in the eastern city of Hangzhou in 1987. There, he created Wahaha, the beverage brand that would make him one of China\u2019s richest men.<\/p>\n Zong was propelled onto the global stage when he fell out with French food giant Danone, as the two dissolved a decade-long partnership in a flurry of lawsuits and government intervention.<\/p>\n The saga started in 1996, when Zong formed several joint ventures in China with the Paris-based owner of Evian water. The terms of their agreement included the transfer of the Wahaha brand, which means laughing child in Chinese, to the ventures that were 51% owned by Danone.<\/p>\n That partnership grew to a sales peak of 1.1 billion euros ($1.2 billion) in China, before Zong accused Danone in 2007 of trying to take over Wahaha at an unreasonably low price. Danone countered that Zong had violated their contract by setting up Wahaha-brand companies on the side. At the heart of the fight was who owned the Wahaha brand \u2014 Danone believed it did as per the terms of the original agreement, while Zong asserted that the Chinese government had blocked the brand transfer application, meaning he still controlled it.<\/p>\n Ultimately, Danone capitulated, agreeing to sell its stake to Zong in late 2009 in a deal brokered by the Chinese and French governments. With 80% control of Wahaha, Zong became China\u2019s richest man by 2012 with a personal fortune of $20.1 billion.<\/p>\n Wahaha\u2019s good fortune didn\u2019t last. Revenue started to\u00a0fall<\/a>\u00a0as the company was slow to adapt to Chinese consumers\u2019 changing tastes away from sodas to healthier offerings like juices and yogurt. Savvier rivals like Inner Mongolia Yili Industrial Group and China Mengniu Dairy Co. overtook Wahaha with celebrity ambassadors and product placements in Hollywood movies, while efforts to acquire other companies by Zong\u2019s daughter and chosen successor, Zong Fuli \u201cKelly,\u201d fell mostly flat.<\/p>\n China\u2019s booming Internet industry also soon propelled digital economy entrepreneurs like Alibaba Group Holdings Ltd.\u2019s Jack Ma, Tencent Holdings<\/a> Ltd.\u2019s Pony Ma and JD.com<\/a> Inc.\u2019s Richard Liu to fortunes that dwarfed Zong\u2019s.<\/p>\n As the mom-and-pop stores that stocked Wahaha\u2019s drinks and snacks lost business to online shopping, Zong became a critic of the e-commerce industry, accusing it of\u00a0suffocating<\/a>\u00a0brick-and-mortar retailers and of destroying more jobs than they created. He used his membership in China\u2019s legislature, the National People\u2019s Congress, to advocate for more government policies that supported what he called the \u201creal economy\u201d versus the \u201cInternet economy.\u201d<\/p>\n For all his wealth and stature, Zong lived frugally. He dressed simply, and wouldn\u2019t buy new shoes until the pair he was wearing had worn out. Longtime Wahaha spokesman Shan Qining liked to tell a story of sales people at a yacht exhibition ignoring Zong, and being told only afterward that they had snubbed one of China\u2019s richest men.<\/p>\n What few hints there were of his fortune included a taste for Davidoff cigarettes and a $48,000 Vacheron Constantin watch he bought to replace a Rolex \u2014 because he had heard that Rolexes were favored by the \u201cnewly rich.\u201d He didn\u2019t consider himself one of them, as his fortune was made \u201cone yuan at time,\u201d he said in a 2012 Bloomberg interview.<\/p>\n \u201cFor a long time, I couldn\u2019t even afford food and clothing,\u201d Zong said. \u201cI climbed from the very bottom of the society.\u201d<\/p>\n<\/div>\n\nSubscribe to the CEO Daily newsletter to get the CEO perspective on the biggest headlines in business. Sign up<\/a> for free.<\/div>\n