KUALA LUMPUR: China's richest man, Zhong Shanshan, is at risk of losing his top spot due to challenges plaguing his bottled water giant, Nongfu Spring, according to a Bloomberg report.
His wealth has decreased by US$13 billion in 2024, reducing his net worth to US$54.8 billion.
Zhong is now only slightly ahead of Colin Huang, founder of PDD Holdings Inc., whose fortune stands at US$47.3 billion.
Zhong's company, Nongfu Spring Co., faces several challenges, including a price war in the bottled water market and negative public sentiment.
These issues have led to a nearly 20 per cent drop in Nongfu's share price since February.
In contrast, PDD Holdings has seen a six per cent increase in its share price, attributed to its low-priced products and aggressive deals.
Nongfu Spring has also been criticised for its product quality and faced a boycott earlier this year.
Additionally, the company encountered trouble when the Hong Kong Consumer Council reported high levels of bromate in its water, although this was later clarified as a misunderstanding.
Despite these setbacks, Nongfu had strong earnings report last year due to robust sales of its ready-to-drink teas.
However, revenue from bottled water has decreased from 54.9 per cent in 2022 to 47.5 per cent this year, reflecting increased competition.
In response to these challenges, Zhong has announced plans to purchase up to US$256 million worth of Nongfu shares through his holding company, Yangshengtang Co.
This move is intended to reassure investors and stabilise the company's stock.