BEIJING – Chinese beverage giant Nongfu Spring is the latest major brand to come under fire from the mainland’s online army of nationalist citizens, underscoring challenges for domestic firms navigating an increasingly patriotic environment. 

Netizens on local platforms are calling for a boycott of Nongfu Spring’s products after the founder of key rival Hangzhou Wahaha Group died on Feb 25, triggering a wave of unfavourable comparisons.

That is dragging on its stock, which has since dropped almost 6 per cent – making it one of the worst performers on the Hang Seng China Enterprises Index.

Users have jumped to criticise 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 Mr Zhong’s son holds a United States passport, angering netizens who question the family’s allegiance to China. 

Nongfu Spring executives did not immediately respond to Bloomberg’s e-mailed 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 pivot from major global brands to home-grown 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 per cent growth target for 2024.

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 post-earthquake nuclear leak.  

Steep drop 

Nongfu Spring’s sales have plunged, according to domestic media reports, wiping out about HK$30 billion (S$5.1 billion) in market cap in the past two weeks, even as Chinese stocks trading in the city had a small gain in the same period. 

Mr Zhong published a statement earlier in March defending the company and himself.

While acknowledging that Nongfu Spring and Wahaha had filed lawsuits against each other following the water debate, he said both he and his competitor’s late chairman, Mr Zong Qinghou, had later come to terms. 

His “respect for Mr Zong’s entrepreneurship has never wavered”, according to the statement, posted on Nongfu Spring’s verified Weibo account.

It was not enough to appease Internet users, who commented on the statement asking Mr 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 informal 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.

Mr Hu Xijin, former editor of Chinese state-backed Global Times newspaper, called for netizens to be more tolerant of private entrepreneurs and pay attention to their contributions to the nation’s economy.

In a March 11 social media post, he wrote that the incident around Nongfu Spring showed the pressure such figures face to be “saints” that fit the public imagination. BLOOMBERG