---
title: "After the Storm, Will Haitian Fall from Grace?"
description: "In October, a wave of food safety issues spread online, affecting everything from food and beverages to condiments. Haitian Weiye was repeatedly trending due to 'Hextech' and accusations of 'double standards.' Now that the truth is out and the heat is fading, this incident has undoubtedly dealt a heavy blow to Haitian. This article discusses what changes the condiment industry will face after this crisis and whether Haitian will fall from its pedestal."
author: "赵胜男"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2022-11-18"
language: "en"
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# After the Storm, Will Haitian Fall from Grace?

> In October, a wave of food safety issues spread online, affecting everything from food and beverages to condiments. Haitian Weiye was repeatedly trending due to 'Hextech' and accusations of 'double standards.' Now that the truth is out and the heat is fading, this incident has undoubtedly dealt a heavy blow to Haitian. This article discusses what changes the condiment industry will face after this crisis and whether Haitian will fall from its pedestal.

In October, a wave of food safety issues continued to ferment online, sparing no category from food and beverages to condiments.
Haitian Weiye was repeatedly pushed to the top of hot searches due to 'Hextech' and the 'double standard' criticism.
As things stand now, the truth about Haitian's double standards has been revealed, and the热度 is gradually dissipating, but this farce has undoubtedly dealt a heavy blow to Haitian.
What we want to discuss today is: after this crisis, what changes will the condiment industry face? Will Haitian fall from its pedestal?
**01**
This year's food safety issues have been endless, and the Haitian 'double standard' incident has undoubtedly dealt another heavy blow to already fragile consumers. If it were a small workshop, people's anger wouldn't be so high, but Haitian is a national big brand. In the past, the domestic consumer market experienced a period of commodity shortage, when quality was secondary; as long as products could be produced, they would sell, and it was common for consumers to buy defective products. Gradually, with economic development, the consumer market shifted from shortage to oversupply, making product quality a priority. Big brands that strictly controlled quality became increasingly favored, eliminating many enterprises with substandard products. For a long time, people chose big brands out of trust. When the bridge of trust between consumers and brands shows cracks, consumers' anger, boycotts, and denunciations are understandable. Although this time it was a false alarm, Haitian also publicly stated: 'Whether in the domestic or international market, the company (Haitian Weiye) has products of high, medium, and low grades, and sells both products with additives and products without additives.' It is clear that netizens were simply comparing Haitian's zero-additive soy sauce abroad with its regular soy sauce domestically, which is not a fair comparison. But from the netizens who didn't know the truth, it can be seen that Haitian itself did not place much importance on zero-additive products, not even doing adequate basic promotion. Moreover, when most consumers were unaware of the truth and just wanted an explanation, Haitian did not consider things from the consumers' perspective, nor did it even understand why consumers were angry. With two unsatisfactory announcements, it maximized public resentment.
Some may think it doesn't matter; this was just bad luck for Haitian, and once it explains clearly, people will forget in a while. Haitian has such a high market share in offline channels that when people go to the supermarket and only see Haitian soy sauce, won't they still choose Haitian? Besides, zero-additive is just a small piece of the condiment industry cake; even if it loses this small piece, it won't hurt the deeply rooted Haitian Weiye.
**02**
But is it really irrelevant? Let's first talk about the status of zero-additive. According to Tsingshan Capital's '2021 Annual Consumption Report,' by the end of 2021, China had 92 million people living alone. The main consumer force has gradually shifted from families to individuals. The trend of high-quality consumption and personalized consumption is intensifying. The FMCG industry has entered a critical period of reshuffling and the tipping point of consumption upgrade. National health awareness has begun to awaken. Whether there are quality issues is no longer the standard for judging a brand; quality without problems is the bottom line. Consumer demand has shifted from eating well to eating healthily. Take Qianhe Weiye, which focuses on zero-additive products: despite Haitian's extremely high market share, it seized the health trend and has grown rapidly in recent years. Last year, its operating revenue reached 1.925 billion yuan, more than doubling compared to its initial listing period. This time, due to the 'Haitian incident,' Qianhe soy sauce benefited, and the more Haitian's stock price fell, the more Qianhe's rose. It must be admitted that Qianhe Weiye is aggressively carving up the soy sauce market, and the zero-additive market has great potential. Now let's look at Haitian's proud offline market; it won't be stable forever. Why? **Today's transaction scenarios are highly fragmented. Offline is no longer the loyal choice for consumers. If they can't find the brand they want offline, they can buy through community group buying, Taobao, or live-streaming platforms...** This doesn't mean offline channels are no longer important, but brand owners need to change their mindset. The market environment is no longer one where occupying the offline market guarantees peace of mind. **Brand owners must maintain the bridge of trust with consumers. A crack can be repaired, but if there are too many cracks, the foundation will gradually shake, and the bridge of trust will eventually collapse.** There is no such thing as an unchanging business. For Haitian, as the company ages, its ability to洞察 consumers' new needs gradually weakens. This crisis is a wake-up call, signaling that it's time to make some changes. Any enterprise that fails to keep up with the pace of change will be abandoned, just a matter of time. In fact, the hidden crisis within Haitian has long been fermenting. Haitian Weiye's 2021 financial report showed that its revenue and net profit both fell to single digits, at 9.71% and 4.18% respectively, far below the 15% of the previous four years, and it was called the 'worst' annual report since listing. From the 2022 semi-annual report, Haitian Weiye still hasn't reversed its slowdown. Net profit attributable to the parent company grew at a 'snail's pace' of 1.21%, and gross margin fell 2.39% year-on-year to 38.05%, a new low since listing.
As a well-known enterprise that once achieved brilliant results, Haitian Weiye has been on a high after its listing in 2014, with its stock price continuously doubling. At its peak, its total market value approached 700 billion yuan, even surpassing many famous companies like Sinopec, SAIC Motor, and Midea Group. The current performance is indeed not optimistic.
**03**
With internal performance crisis and this reputational crisis, will Haitian fall from its pedestal? At present, no condiment company can compare with Haitian. Haitian's brand power and channel power are unmatched in the industry. In terms of channel power, as of the end of 2021, Haitian's network covered 31 provincial-level administrative regions, over 320 prefecture-level cities, and over 2,000 county-level markets. Its products are distributed in major supermarket chains, wholesale farmers' markets, urban and rural convenience stores, and retail shops nationwide, and exported to more than 80 countries and regions worldwide. Haitian's channel coverage is very successful; when you walk into any supermarket, as long as there is a condiment category, you are likely to see Haitian Weiye's products. In terms of brand power, Haitian's brand influence is strong. In 2018, Kantar's '2018 Global Brand Footprint Report' China list ranked Haitian Weiye 4th among Chinese FMCG brands with 520 million consumers and a 73.3% penetration rate, and it was the only condiment company in the top 10, maintaining its leading position in China's condiment FMCG market. In 2019, the Haitian brand was listed on the China Brand Power Gala Model 100 Brand List, with a brand value of 21.294 billion yuan. In Kantar Consumer Index's 2019 Asia Brand Footprint Report, Haitian Weiye ranked 4th among Chinese FMCG brands. In 2020, Chnbrand, an authoritative brand rating agency, released the 10th China Brand Power Index (C-BPI) brand ranking and analysis report, in which Haitian won 'four championships' in the condiment industry, respectively ranking first in soy sauce, oyster sauce, sauce, and vinegar in the 2020 C-BPI. These have gradually become Haitian's protective layers, stabilizing its business. Even if the current performance is not ideal, it's just a slowdown in growth, not a decline. As for this reputational crisis, there will certainly be short-term impacts, but it won't shake Haitian's foundation. So on the surface, Haitian is still the deified soy sauce company, but from within, it's not optimistic. If the hidden internal crises and the bridge of trust with consumers are not properly addressed, they will gradually erode the company from within, and it's only a matter of time before it goes downhill. Do you think Haitian will fall from its pedestal? Feel free to leave a comment in the comment section.


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