Wahaha goes against the grain with liquor venture

Moutai's unique, finite resources and the complex procedures involved in producing the liquor also convinced him to make the investment.

But the marketing and distribution of the new liquor will rely largely on traditional sales channels and large dealers, instead of Wahaha's own vertically integrated distribution network. The company's nationwide sales network, which reaches down to even small outlets, is the foundation of his beverage empire.

Wang Lusheng, a former government officer in Guizhou province, said that an alliance of small distillers and large companies such as Wahaha will combine the strengths of both, in terms of capital and products.

The Wahaha group has made several attempts to diversify over the past decade.

In 2002, Wahaha announced plans to offer children's apparel. In 2010, it created a baby formula brand that hasn't created much of a stir in the market.

In 2012, Zong launched a new retail venture that included the WAOW Plaza shopping center in Hangzhou, which has failed to live up to expectations.

"Nowadays, you cannot build anything from scratch," said Zong, who was once ranked as the country's richest man.

"The markets don't allow a company to do that any longer. You have to work with an experienced partner in a new area. I don't select sectors. Where there is a demand, there is an opportunity for me."