Recent discussions across forums, WeChat, and Weibo have been rife with anxious commentary over Wahaha's 7% sales decline, as if the company were on the brink of collapse overnight and Zong Qinghou were teetering on the edge of losing his legacy. But is it really that serious? 80 billion, 80 billion—have you ever achieved that? Leading enterprises move like leading stocks: the stronger the stock, the more volatile its swings; a washout is healthy. There is no stock that only rises and never falls, and likewise no company that grows every year. In the sluggish macroeconomic environment of 2014, Wahaha's sales dipped only 7%, which for a giant nearing 80 billion in scale is hardly significant. Moreover, the old man Zong rarely airs his own dirty laundry in public—this is both a pressure on the entire team and a driving force for his own transformation. From this perspective, I, Guo Chenglin, still have faith in Wahaha's future. There is no need to doubt whether Wahaha's business model has problems; achieving 80 billion is the best proof. As the old saying goes, "If you want to know the mountain path, ask those who have walked it." Without the process of steering a company from zero to 80 billion, do not casually dismiss Zong Qinghou and Wahaha's recipe for success. Let us revisit Wahaha's recipe for success and see whether it still holds value for today's enterprises and markets. 1. Does Wahaha not understand fan marketing? Some experts, scholars, and enterprises criticize Wahaha for not understanding consumer needs, not playing fan marketing, and being out of touch with the times. This argument is pure fallacy! What are fans? Fans are what we used to call loyal customers, or members. Do not confuse the issue by swapping in a new term. If we talk about fans, Wahaha has at least 500 million fans in China, supporting 80 billion in consumption. If any website's fan count breaks 2 million, they would be overjoyed and valued at a sky-high price. So what about Wahaha? To label it backward simply because it does not use trendy vocabulary is a stretch. I once emphasized at a Tsinghua University executive class: I do not oppose Internet thinking; I oppose Internet thinking that does not make money. In fact, if we look closely, we find that all so-called Internet companies make money from traditional enterprises—Alibaba does, JD.com does, and Baidu does too. On one hand, they preach that traditional enterprises are backward; on the other, they profit from them. That is the real "Internet thinking trap." Some might say fans are about stickiness, and Wahaha does not focus on stickiness. But ask yourself: if you had the ability to get every Chinese person to drink one bottle of your beverage, would you be happy, or would you be happy? Conversely, does Wahaha, with sales climbing year after year to 80 billion, show stickiness to consumers? So, do not casually say Wahaha does not understand consumer needs! Perhaps it is you who does not understand! 2. Does Wahaha not know how to play the big single product? A widely circulated criticism is that Wahaha does not understand big single products. That is also a big mistake! Wahaha was built on "big single products"! One big single product after another has made Wahaha what it is today! From the children's nutrition liquid at the start, to AD calcium milk, to purified water, to the Nutri-Express that now exceeds 10 billion in sales—which of these is not a big single product? Wahaha has long mastered this game! Remember, when Nutri-Express first hit the market, it did not sell well. An ordinary enterprise or expert might say, "Is there a strategy problem?" But Zong Qinghou was unmoved; he doubled the advertising budget, and it took off! At the time, a batch of distributors who did not see potential in Nutri-Express missed a golden opportunity to make big money. So, Wahaha is already adept at running big single products; in fact, it is a model for all Chinese FMCG companies to learn from, because you are far behind the era when Wahaha started playing big single products over 20 years ago! What is a big single product? Big creativity, big demand, big scale, mass appeal—it is a product that looks ordinary but sells extraordinarily well. Is Nutri-Express extraordinary? Is children's nutrition liquid extraordinary? Neither is extraordinary, but consumers universally need them. 3. Is Wahaha's channel theory outdated? Wahaha's achievement of 80 billion in sales owes much to its joint distribution system channel model, which has almost perfected the FMCG channel model. Its three-pronged approach—stock pressure, advance payment, and advertising blitz—may seem ordinary, but it is like a thousand-pound force hitting the Chinese market, stirring up waves and churning out 80 billion in sales. The greatest form has no shape, and the greatest sound is silent. These plain techniques are played to perfection by Wahaha, while less capable enterprises are forced to ponder marketing tactics that spend little but achieve little. What Wahaha needs now is not to abandon a channel model proven successful in the past, but to upgrade it, re-energize distributor channels, make channels "proactive" again, develop a "Joint Distribution 3.0 model," restore the capabilities of distributors that have been neglected, support distributor success, and reposition distributors. By upgrading the past "static joint distribution" to a "dynamic joint distribution," Wahaha's growth could double, and breaking 150 billion is entirely possible. Remember, history does not develop in cliffs; it is always continuous, from quantitative to qualitative change. Wahaha's channel model is still the most advanced in China and even the world; it is just that the knife has dulled from use and needs resharpening. When you walk on the street in summer, thirsty, you cannot go online to get a bottle; the small shop on the corner is still your most convenient choice, after all, a drink costs less than 5 yuan. So, traditional channels remain the mainstream for FMCG, accounting for 90% of total social retail sales. So, on what basis do you say Wahaha's channel model is outdated? 4. Has Wahaha's diversification really lost money? Wahaha has tried baijiu (liquor), and it is said to be unsuccessful. Is the reason that it did not achieve another 80 billion? If you knew how Wahaha's liquor was absorbed by the market, you might reconsider. Did you know? Wahaha distributes one case of liquor to each distributor at factory price for business entertainment purposes. Do you know how big a sales volume that is? Also, Wahaha's children's clothing and shopping malls may not look very successful, but they were never positioned by Zong Qinghou as core strategies; they were trial balloons! With Wahaha's corporate influence, the cost advantages in these two industries are beyond your imagination. In China, doing business is not just about sales volume; it also involves strategic considerations like cost and land! Everyone sees the 80 billion in sales, but they overlook the land assets of Wahaha's numerous branch factories and companies across China. Together, these assets amount to an astronomical figure. I think "too rich to need money" is the fundamental reason Wahaha has not gone public. If you consider Zong Qinghou's diversification from a capital operation perspective, you may find new insights and will not judge the success or failure of Wahaha's diversification with conventional thinking. 5. Does Wahaha really not understand Internet thinking? What is Internet thinking? Three words: "zero distance"! I tell you, Zong Qinghou has been running his business with "Internet thinking" for over 20 years. Do you believe me? Are you suspecting that I, Guo Chenglin, am talking nonsense? The essence of Internet thinking is "zero distance"—zero distance between the enterprise and consumers. To avoid confusion, let us replace "Internet thinking" with "zero-distance thinking," which is more appropriate and easier to understand the points I am about to make. Since starting his business, Zong Qinghou has had a habit: he spends up to 200 days a year on the market frontline, directly feeling the pulse of the market and understanding daily changes in consumer needs at the terminal. In that era, without email, Zong Qinghou used a van as his office and faxed market policy orders nationwide, achieving "real-time" response speed. This is true "zero distance"! It is precisely this "zero-distance thinking" and "zero-distance management style" that allows him to do without a deputy general manager, needing only about 20 secretaries! So, is Zong Qinghou using "Internet thinking" or not? Is there any difference from Xiaomi's Lei Jun, who frequents forums every day? The only difference is the tools of the times, but the essence is unchanged! So, do not say again that Wahaha and Zong Qinghou do not understand Internet thinking! Saying that is childish! 6. Does Wahaha really not understand product innovation? Wahaha has a strategy that Zong Qinghou euphemistically calls "striking after the enemy," which means it rarely initiates product innovation first, instead imitating competing brands. If you think Wahaha is good at copying and therefore say it does not innovate, I think you are too arbitrary, even nitpicking. Do you know? Microsoft's products are borrowed, Pepsi's products are borrowed, many IBM products are borrowed, and Apple's iPhone is the epitome of borrowism. There is no original creation in the world; only discovery and refinement. True innovation always belongs to the scientific community, and it is also about discovering what already exists in nature. According to global statistics on innovative products, the failure rate of innovative products is 85%! If you made Wahaha innovate every day, the company would have disappeared long ago! In business, there is no issue of face, only success or failure. Nongfu Spring is good at innovation, but it always serves as a model for Wahaha to test. Wahaha does not want the honor of innovation; it only wants to harvest market results. I think its distributor partners are happy with that! Wahaha understands product innovation very well, especially how to maximize the harvest of market innovation results, even if the result is not its own original, because the risk is lowest. According to rumors, one of Zong Qinghou's biggest regrets was missing the opportunity to follow up on herbal tea; otherwise, today's herbal tea market would not be left to JDB and Wanglaoji, who are busy with ridiculous lawsuits. I hope China has more Wahahas I want to emphasize that I, Guo Chenglin, have no cooperative relationship with Wahaha, nor is this article intentionally targeting anyone's views. Rather, I think it is fortunate that China has produced a Wahaha, and no one wants to see only joint ventures and foreign brands like Master Kong, Uni-President, and Wahaha on Chinese soil. I have great respect for Zong Qinghou himself! I have long followed Wahaha's marketing through various channels. Many of Zong Qinghou's and Wahaha's marketing concepts are very advanced and remain relevant today. The only thing needed is to keep pace with the times and continuously optimize and improve. I have seen many recent criticisms of Wahaha. Either they use new vocabulary and concepts that are actually old ideas Wahaha has practiced for over 20 years, or they misjudge Wahaha because they fail to analyze the underlying reasons. If such views are widely accepted by the business community, it would be very dangerous, because erroneous criticism would make traditional Chinese enterprises in transition even more confused. If even Wahaha with 80 billion is completely wrong, how should small and medium enterprises with a few hundred million survive? The times are changing, and Wahaha is also changing. Large enterprises react faster than small ones, especially Wahaha, which has grown through its own efforts and has a keen market sensitivity. From Zong Qinghou's speeches, we can see he mentioned paying attention to a small enterprise producing special forces coconut juice, which shows how much he respects the market and competitors. This attitude is worth learning for Chinese enterprises. I believe that even if Wahaha encounters setbacks in the future, its prospects remain bright, and China remains bright. 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