Zong Fuli, standing at the center of the storm, has chosen to take an unconventional path. Recently, a document from Wahaha to its distributors revealed that starting in 2026, the company will launch an entirely new brand called "Waxiaozong." The document states that due to complex historical issues that cannot be effectively resolved in the near term, the company's operations remain exposed to related legal risks, making this an unavoidable choice.

In February 2024, Wahaha founder Zong Qinghou passed away. To commemorate this "canvas shoe billionaire," consumers spontaneously purchased Wahaha products, causing the company's performance to surge last year with revenue approaching 80 billion yuan, a nearly 50% year-over-year increase. Many distributors also benefited from this wave of "overwhelming fortune."

However, traffic is a boomerang. As Wahaha has been embroiled in "inheritance disputes" and other controversies this year, online opinions about Wahaha and Zong Fuli have become increasingly polarized. The Wahaha brand's reputation has suffered, and distributors' businesses have been impacted. Under these circumstances, can "Waxiaozong" starting fresh replicate the sales miracle?

**A Sudden "Trump Card"?**

"Several brands haven't succeeded before, and new brands aren't that easy to build," said a food and beverage FMCG industry insider upon learning of Zong Fuli's decision to use the new brand "Waxiaozong" for the 2026 sales year.

According to Interface News, a document titled "Notice on Carrying Out Communication Work with Distributors for the 2026 Sales Year" recently circulated online, stating that since Wahaha Group founder Zong Qinghou's death, many complex historical legacy issues cannot be effectively resolved in the near term, leaving the company's operations constantly exposed to legal risks. Particularly under the current shareholding structure, the use of the "Wahaha" trademark requires unanimous consent from all Wahaha Group shareholders; otherwise, no party has the right to use it.

To maintain compliance in "Wahaha" brand usage, the company decided to switch to the new brand "Waxiaozong" for the new 2026 sales year.

Multiple Wahaha distributors and retail store operators expressed concerns about the prospects of the new brand "Waxiaozong," believing that under pressure from competitors like Nongfu Spring and C'estbon, and amid the impact of Wahaha family dispute controversies, rashly using a new brand seems somewhat "willful."

Brand evaluation agency GYBrand valued the "Wahaha" brand at 91.2 billion yuan in its 2024 China's Most Valuable Brands 500 list. Abandoning the national brand "Wahaha" to start fresh appears to be a double-edged sword.

On one hand, consumer mindshare and channel trust will inevitably be impacted. After all, Leehom Wang's song "Loving You Equals Loving Myself" once embedded the Wahaha brand deep in consumers' hearts. On the other hand, the protracted internal family disputes are clearly difficult to resolve effectively in the short term. At this point, cutting through the mess decisively might avoid shareholding and trademark disputes while accelerating the creation of a more independent brand system.

This aligns with Zong Fuli's consistently decisive style and strategy of continuously expanding the "Hongsheng system." Although some distributors are not optimistic about "Waxiaozong," this clearly cannot shake Zong Fuli's determination.

Since 2025, under Zong Fuli's leadership, Wahaha has implemented a cleanup policy targeting small distributors with annual sales below 3 million yuan.

Zheng Wei (pseudonym), a market manager at a mid-tier dairy company, explained that for his company, distributors with annual sales below 500,000 yuan are considered small distributors, while for major brands like Wahaha, distributors with annual sales below 3 million yuan are also considered small distributors, possibly only county-level distributors at most.

A food and beverage wholesale business person calculated that with 3 million yuan in annual sales, profits might be less than 200,000 yuan, barely enough to employ several staff members. Small distributors have greater performance volatility and are more likely to cause mutual undercutting in small regional areas, creating internal brand conflicts.

On August 11, Wahaha responded publicly that this year, the number of new distributors far exceeded terminations, and changes in the distributor system are based on market strategy and cooperation willingness, representing normal dynamic optimization rather than targeting specific-scale customers.

Perhaps large distributors can better cooperate with the "Waxiaozong" brand renewal, but whether successful market breakthrough can be achieved depends on the new brand's product strength and internal supervision.

"Large distributors also need small distributors to cover capillary regions. The key is maintaining balance. Even large distributors can have price-breaking issues, requiring good inspection and supervision," Zheng Wei said.

**How Will Zong Fuli Break the Deadlock?**

Beyond using a new brand, Zong Fuli has more firmly chosen to "be herself" after taking over, continuously promoting de-"Wahaha-ization." Especially since the Wahaha inheritance battle began, news of Zong Fuli canceling Wahaha subsidiary companies has frequently emerged.

In August alone, Zhejiang Wahaha Health Management Co., Ltd. and Jiangshan Wahaha Hongzhen Drinking Water Co., Ltd. published simple cancellation announcements. According to Qichacha, both companies are wholly-owned subsidiaries of Wahaha Commercial Co., Ltd.

In September, Hulin Wahaha Beverage Co., Ltd. underwent business registration changes, renamed to Hulin Hongsheng Beverage Co., Ltd. Previously, there have been multiple cases of the "Hongsheng system" "absorbing" Wahaha, with Wahaha Changsheng Beverage companies in Shanxi and Nanyang successively undergoing business registration changes, joining the Hongsheng Group territory.

Hongsheng's actual controller is Zong Fuli, who indirectly holds 100% of Hongsheng Group shares through the British Virgin Islands offshore company Hengfeng Trading Co., Ltd.

Although these moves are viewed as "pointless tinkering" by "family members" like uncle Zong Zehou, Zong Fuli continues to be herself. In an August interview with Caijing, Zong Fuli stated: "The 'anchor' is persisting in being myself. I am the same as before and remain unchanged, not altering direction due to turmoil. Regardless of external noise, enterprises must go far by being down-to-earth, not by emotional fluctuations. For me, the only way is steady progress, not being swayed by external voices."

However, can a national brand worth over 90 billion yuan built over decades really be abandoned so easily? Although Zong Fuli heads Wahaha, she is not the company's largest shareholder. According to Qichacha, Hangzhou Shangcheng District Cultural, Commercial and Tourism Investment Holding Group Co., Ltd. is currently Wahaha's largest shareholder with a 46% stake; Zong Fuli holds only 29.4%, with the remaining 24.6% held by Hangzhou Wahaha Group Co., Ltd. Grassroots Labor Union Federation Committee (employee shareholding association).

If the "Wahaha" brand is abandoned and assets and production capacity transferred to the Hongsheng system, losses for state-owned assets and employee shareholders would be greater than Zong Fuli's.

Zong Fuli's desperate gambit aligns with her consistently decisive style and might become a variable that breaks the deadlock. After Zong Qinghou's death, some shareholders questioned the reasonableness of Zong Fuli's management of Wahaha Group. In July 2024, citing inability to continue duties, Zong Fuli suddenly announced her resignation from vice chairman and general manager positions at Wahaha Group, no longer participating in its business management.

Due to the sudden nature of events, just as outsiders speculated whether Zong Fuli had been ousted through "palace intrigue," facing a leaderless situation, she staged a "return to power" drama several days later, being "invited back" to continue leading, successfully advancing by retreating.

Supporting "Waxiaozong" is another form of burning bridges. Since using the Wahaha trademark requires unanimous shareholder consent, if Zong Fuli, as the legitimate successor and second-largest shareholder, cannot use it, others wanting to continue using it might also be vetoed by Zong Fuli. When the situation falls into deadlock again, perhaps another change is brewing.

**What to Compete with Zhong Shanshan?**

Although Wahaha faces brand image aging issues, it can still attract many post-80s, post-90s, and even Gen Z consumers through nostalgic IPs like AD Calcium Milk and Future Cola. "Second-generation entrepreneur" Zong Fuli has always wanted to rejuvenate Wahaha's brand image, including replacing 20-year spokesperson Leehom Wang, viewed as attempts to break tradition.

Before "Waxiaozong," Zong Fuli had independently created new young brands like KellyOne, but based on market feedback, they didn't sell well, and the brand is now rarely seen in supermarkets.

Conversely, as the "one wife, one daughter, one pair of canvas shoes" persona collapsed after Zong Qinghou's death, Wahaha, which had benefited from this persona dividend, has now been hit by traffic's boomerang.

Chanmama data shows that in early March 2024, Wahaha's Douyin flagship store livestream daily sales surged from around 20,000 yuan to nearly 5 million yuan. However, by 2025, the livestream's daily average sales were less than 50,000 yuan, about one-fifth of last year's average.

In contrast, after Zong Qinghou's death, Nongfu Spring founder Zhong Shanshan faced "cyberbullying" due to historical disputes with Wahaha. Despite dual pressures on performance and public opinion causing Nongfu Spring's stock price to plummet, it ultimately stabilized through a solid product line.

In multiple supermarket stores, Nongfu Spring's beverage coolers are most prevalent, displaying Nongfu Spring, Oriental Leaves, Water-Soluble C, Nongfu Orchard, Scream, Vitamin Water, and soda water hits that cover almost all frequently purchased daily drinking water products.

Besides Nongfu Spring, brands like Genki Forest, Coca-Cola, and Master Kong are also engaged in "cooler wars," leaving limited space for Wahaha. Distributors' preferences for sourcing primarily depend on sales and profits, indirectly reflecting Wahaha's market position.

A report by Yubo Intelligence titled "2022-2027 China Bottled Water Industry Supply and Demand Analysis and Development Prospects Research Report" shows Nongfu Spring holds the top position in the bottled water market with 26.5% market share, while Wahaha ranks fourth with 9.9%.

Facing "internal troubles and external threats," Zong Fuli has been accelerating "self-reliance." According to Xi'an Evening News, Xi'an Hengfeng Beverage Co., Ltd.'s Hongsheng Xi'an beverage new base project was approved in August, with total investment reaching 1 billion yuan, mainly producing purified water, tea beverages, coffee, fruit juices, and dairy drinks.

While external attention remains focused on Wahaha's palace intrigue drama, shifting focus away from family lawsuits to concentrate on strengthening Hongsheng system capabilities might be Zong Fuli's optimal solution for now. However, successfully replicating Wahaha's glory requires market and time validation.