China's Wealth Titans Lose Billions in Stunning Stock Selloffs

China’s largest consumer companies experienced significant stock selloffs, wiping out over $18 billion from the fortunes of the nation’s wealthiest individuals. Zhong Shanshan, China’s richest person and founder of Nongfu Spring Co., saw his wealth drop by about $4 billion as the beverage giant’s shares plunged up to 12.9% on Wednesday in Hong Kong, according to the Bloomberg Billionaires Index, reducing his net worth to $45.5 billion.

Similarly, on Monday, Colin Huang, founder of PDD Holdings Inc., saw his wealth drop by $14.1 billion—the largest single-day loss in the company’s history—after a revenue growth slowdown warning led shares to plummet. This dramatic decline moved Huang from the top spot to fourth on Bloomberg’s wealth ranking despite his brief hold on the number one position earlier this month.

The downward trend continued on Tuesday as shares of PDD’s subsidiary, Temu, fell another 4.1%, wiping out an additional $1.4 billion of Huang’s wealth. Tencent Holdings Ltd. co-founder Pony Ma now occupies the second position on Bloomberg’s wealth tracker.

China’s Companies Engage in Aggressive Price Competition

These sharp declines in wealth reflect growing doubts about the long-term stability of Chinese consumer markets, where many of the world’s leading companies are grappling with decreasing demand amid economic uncertainty. The fierce competition to attract increasingly price-conscious consumers has driven both foreign and domestic companies into price wars, exemplified by Nongfu’s introduction of a new purified water product priced at under 1 yuan ($0.14).

“China’s economy might be in worse shape than expected if consumer companies like Nongfu and PDD are struggling,” said Vey-Sern Ling, managing director at Union Bancaire Privee. “These firms represent sectors where demand is expected to remain strong—beverages and affordable products.”

Nongfu and PDD Public Relations Issues

Both companies have also faced a series of public relations challenges this year. Nongfu came under intense scrutiny on Chinese social media following the death of Zong Qinghou, founder of its key competitor Hangzhou Wahaha Group Co., with some users accusing Nongfu of employing questionable tactics to outmanoeuvre its rival. Later, a report from Hong Kong’s Consumer Council questioned the quality of Nongfu’s water, though the council later clarified its findings.

PDD has also faced criticism, with hundreds of merchants protesting outside its southern China offices last month, alleging unfair penalties imposed by the company. Additionally, the company’s e-commerce giant, Temu, is under increasing regulatory scrutiny as the European Union considers closing a tax loophole for cheap online goods. This move would significantly impact Chinese retailers.

Nongfu’s revenue from packaged drinking water products dropped by 18% in the first half of the year, with the segment’s share of total revenue falling to about 39%, down from around 48% last year. This decline has been attributed to negative public sentiment towards the company and Zhong since the end of February.

Nongfu and PDD have competitors aggressively targeting their market share. What’s clear is that these companies, once seen as leaders in their fields, are not immune to the intense competition seen in other industries, and investors are beginning to reassess the security of their positions.

Li Xuetong, fund manager at Shenzhen Enjoy Investment Management Co.