The Chinese beverage giant Nongfu Spring Co is the latest major brand to come under fire from an online army of nationalist citizens, underscoring the challenges for domestic companies navigating an increasingly patriotic environment.
Netizens on local platforms are calling for a boycott of Nongfu Spring products after the founder of rival Hangzhou Wahaha Group died on Feb 25, triggering a wave of unfavourable comparisons. That has dragging on its stock, which has since dropped almost 6% — making it one of the worst performers on the Hang Seng China Enterprises Index.
Users have been criticising everything from Nongfu Spring’s packaging, which some argue has elements that can be associated with Japan, to the business tactics of founder Zhong Shanshan — China’s richest person — including a decades-old debate over the superior quality of its water compared to Wahaha and other brands.
Some have also alleged Zhong’s son holds a US passport, angering netizens who question the family’s allegiance to China.
Nongfu Spring executives did not immediately respond to Bloomberg’s emailed requests for comment. A call to the company went unanswered.
Some Chinese companies have benefitted in recent years from nationalist sentiment that has led shoppers to switch from major global brands to homegrown products. But the online furore around Nongfu Spring highlights the pitfalls that can befall even domestic giants as they navigate growing nationalistic pressure.
It also poses a challenge for the government as it works to restore the mainland’s faltering private sector — after years of regulatory crackdowns and a shaky economy hurt entrepreneurs’ confidence — to help meet an ambitious 5% growth target for this year.
Nongfu Spring has weathered online blowback from patriotic users before. In 2021 it was criticised on Weibo over a promotional campaign for one of its new beverages that mentioned peaches from Fukushima, the Japanese prefecture that endured a nuclear leak after the catastrophic 2011 earthquake.
Steep sales drop
Nongfu Spring’s sales have plunged, according to domestic media reports, wiping out about HK$30 billion (US$3.8 billion) in market capitalisation in the past two weeks, even as Chinese stocks trading in the city had a small gain in the same period.
Founder Zhong published a statement earlier this month defending the company and himself. While acknowledging that Nongfu Spring and Wahaha had filed lawsuits against each other following the water debate, he said that both he and his competitor’s late chairman, Zong Qinghou, had later come to terms.
His “respect for Mr Zong’s entrepreneurship has never wavered”, according to the statement, posted on the Nongfu Spring Weibo account.
It wasn’t enough to appease internet users, who commented on the statement asking Zhong to clarify his son’s citizenship and complaining about the taste and quality of Nongfu Spring’s water.
“Does your son really hold US citizenship? How about the whole family of yours? I’m not going to buy your products any more,” one Weibo user wrote.
Nongfu Spring’s online woes jar with Chinese government pledges to protect private entrepreneurs from hate speech. The government tends to rein in nationalist sentiment online to minimise the risk of such campaigns posing a bigger political problem.
The Supreme People’s Court in recent days vowed to crack down on “malicious attacks” against entrepreneurs, pledging to punish “extreme language and acts” as part of efforts to create an environment conducive to the development of private economy.