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No last laugh for Wahaha founder as mall struggles

By Wang Zhuoqiong (China Daily) Updated: 2014-06-10 07:26

WAOW Plaza in Hangzhou a rare misfire for China's 2nd-richest man

The first luxury shopping mall from the nation's second-richest man, Zong Qinghou, has been finding it tough to turn a profit in the two years since its grand opening.

No last laugh for Wahaha founder as mall struggles
WAOW Plaza in Hangzhou, China's version of London's Harrods or Paris'Galeries Lafayette, is said to be ending contracts with developers after suffering from extended losses since its opening in 2012. Dong Xuming / For China Daily

China's version of London's Harrods or Paris' Galeries Lafayette, WAOW Plaza in Hangzhou, Zhejiang province, is said to be ending contracts with developers after suffering from extended losses, according to China Real Estate website.

Wahaha spokesman Ren Weifeng said on Monday that he couldn't comment on the latest moves at the mall as the person in charge was on a business trip.

WAOW was created to sell European luxury brands - well-designed but largely unknown by Chinese customers.

Zong, board chairman of Hangzhou Wahaha Group Co Ltd, also planned to sell some brands from the United States and the United Kingdom. "They are good at innovation and update their product lines quickly," he said.

Recently, the shopping mall began hosting the Wahaha Education Center for children in a new direction for the beverage empire. In March, Wahaha set up Wahaha Sanjie Investment Co Ltd to operate Wahaha Future City.

The news came as no surprise to one former executive of WAOW who declined to be named. "It is heartbreaking to hear it," said the source. "We all learned a lesson. Without the right professionals and clear direction, it is hard to make the ship sail."

The source said the shopping mall launched its business in only four months. "The opening was done in such a hurry. Other commercial properties will invest two to three years in research, marketing and operating. But WAOW opened despite its ill-preparedness."

Retail experts worried that the facility's simple layout, scarcity of visitors and the fact that Zong had moved out of his comfort zone, where the business return was much faster, did not bode well.

No last laugh for Wahaha founder as mall struggles

No last laugh for Wahaha founder as mall struggles

Wahaha set to expand production Wahaha Group to boost shopping center business

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