---
title: "Cross-border co-branding and e-commerce: Can Wahaha, moving closer to the youth, return to its peak?"
description: "Wahaha, once the leader in the food and beverage industry, has faced a rapid decline since its peak in 2013. After years of seeking a breakthrough, its recent moves, including a milk tea store and e-commerce platform, have sparked industry discussion. Can Wahaha succeed this time?"
author: "陈峰"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2020-05-26"
language: "en"
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# Cross-border co-branding and e-commerce: Can Wahaha, moving closer to the youth, return to its peak?

> Wahaha, once the leader in the food and beverage industry, has faced a rapid decline since its peak in 2013. After years of seeking a breakthrough, its recent moves, including a milk tea store and e-commerce platform, have sparked industry discussion. Can Wahaha succeed this time?

Wahaha, once the 'leader' in the food and beverage industry, experienced a rapid decline after its peak in 2013. For years, Wahaha has been seeking a way to break through and return to its peak. Recent moves have also sparked industry discussion. Can Wahaha succeed this time?

Recently, Wahaha's first milk tea store opened in Huai'an, Jiangsu. Most of the drinks in the store are made with AD calcium milk, and many netizens have expressed a desire to try them to see if they taste like childhood.

Not only entering the offline tea drink market, on May 15, Wahaha Group held a press conference for the launch of the 'Wahaha Kangyouli E-commerce Platform and Investment Promotion', announcing the launch of the 'Kangyouli E-commerce Platform', marking the official entry of this beverage giant into e-commerce.

Subsequently, on May 20, Wahaha and Pop Mart co-branded 'blind water' blind box series went on sale nationwide. The first 1,000 boxes were snapped up by blind box enthusiasts within five minutes. Coupled with the previous co-branded ice cream with Zhong Xuegao, Wahaha's cross-border collaborations have been continuously rising in popularity in a short period.

These actions have stirred up quite a stir online, but the industry is more focused on whether the e-commerce platform can keep up with the times and reverse Wahaha's decline. However, even if such a major move as the e-commerce platform succeeds, it won't produce results overnight. So today, I want to discuss the 'small moves' of cross-border marketing.

**-01-
### **Cross-border success cannot push Wahaha back to its peak**
For many born in the 80s and 90s, Wahaha AD calcium milk is an indelible memory. Later, Nutrition Express was also one of the most popular drinks, a trendy beverage, and Wahaha purified water was ubiquitous. So why don't you see people drinking Wahaha as often today? Some say they don't know why, but they feel the Wahaha brand is no longer 'cool', even a bit 'rustic'. This impression is considered in the industry as **Wahaha's lack of continuous innovation, which has prevented the brand from keeping up with the trends of the times.**

So, have Wahaha's offline milk tea stores, co-branded 'blind water', and ice cream succeeded? Can they change the 'rustic' impression of the Wahaha brand?

From the perspective of generating buzz and attracting young traffic, there is no doubt that Wahaha has achieved this. But can such success change consumers' impression of Wahaha as a 'rustic' brand and return to its peak? In my view, **even if these products follow young consumer trends, the core of the products has not changed qualitatively, and they cannot change the 'rustic' brand tone of Wahaha. As for the impact on the entire enterprise, at least for now, these 'small moves' cannot provide much momentum for Wahaha to return to its peak.**

Some say aren't these actions a signal of Wahaha's innovative transformation? Let's see what these moves have brought to Wahaha.

**First, the milk tea store.** Wahaha milk tea with AD calcium milk has special nostalgia for those born in the 90s or older 'kids'. Ordering a cup is good material for posting on social media, and maybe the taste isn't bad? What about the 00s and 10s? AD calcium milk? 'Heard of it, but haven't seen it much' might be the norm. Moreover, besides nostalgia, what is the difference between AD calcium milk tea and other milk tea products?

Look at the sold-out **Wahaha & Pop Mart 'blind water'**. Is it really the 'water' that people are grabbing? It is understood that the first batch of 1,000 boxes of Wahaha 'blind water' was priced at 66 yuan per box, containing 14 bottles of Wahaha soda water and a blind box, while a regular Pop Mart blind box sells for 59 yuan. Of course, the packaging of 'blind water' is also attractive, and random shipping fits the blind box feature. If you are a blind box enthusiast, would you buy it?

It seems to attract attention, and the target group is young. It is well known that Wahaha has been criticized for its 'rustic' brand and products in recent years. **These seemingly innovative cross-border marketing moves, however, do not have a single innovation that truly starts from the product.** Take the milk tea store, for example; Wangwang and White Rabbit have also tried it, and Wahaha itself has done too many similar 'innovations'. These are not enough to change the fundamental brand tone.

A friend of mine at a consulting firm also said that Wahaha's cross-border marketing is fine as a small tactic for brand communication, but it's not really innovation; the core of the product hasn't changed. It might have been okay for Wahaha ten or twenty years ago, but for today's Wahaha, such cross-border moves won't have much effect. Better to pay attention to their e-commerce platform actions.

**-02-
### **The 'chao' capability fails, and the decline from the altar: where is the problem?**
Wahaha's founder, Zong Qinghou, is a business legend. Starting from scratch with a children's nutritional liquid, he led Wahaha on the road to success.

After initial success, Wahaha continued to develop. **In the era when channels were king, Wahaha quickly expanded nationwide by setting up branches in various places to reduce channel costs with the 'production where you sell' model. By 2007, Wahaha had over 100 subsidiaries across the country.**

During the process of scale expansion, **Wahaha encountered another problem: the traditional 'credit sales' model of distributors.** This model forced the Wahaha team to spend a lot of energy 'collecting debts everywhere', with the most serious period seeing over 100 million yuan in overdue payments. **To solve this problem, Zong Qinghou proposed a new channel rule, the famous 'united sales body' model.**

With the support of these two models, Wahaha began to have the 'chao' capability: find a best-selling or potential benchmark product, then 'copy' it, and with strong channels and abundant funds, bombard both advertising and channels simultaneously. Often, the 'copied' product hadn't even become popular before it was replaced by Wahaha's 'same-style' product.

Through this model, Wahaha ranked first in the food and beverage industry for 29 consecutive years, with sales reaching 78.3 billion yuan in 2013, aiming for 100 billion. But in the following four years, Wahaha's performance declined sharply, with sales in 2017 only 45.6 billion yuan, a decrease of over 30 billion. Why did Wahaha's 'chao' capability fail? Where is the problem in its development dilemma?

What did Wahaha do wrong? Nothing. Zong Qinghou has been in business for decades with almost no major decision-making mistakes. So why has Wahaha's performance declined so severely? The times have changed.

In the era when channels were king, Wahaha's 'production where you sell' and 'united sales body' were invincible, even penetrating village convenience stores, something no other company could do at the time. But today, although channels are still extremely important, **with the rapid development of logistics and the internet, and fierce competition among major companies, Wahaha's channel advantage is no longer as obvious.**

**Moreover, during the dividend period of rapid e-commerce development, Wahaha shut it out, and only now has it thought of entering e-commerce.** Whether it will be useful or not, we won't discuss for now, but compared to ten years ago, Wahaha will inevitably spend more resources and energy, and the results may not be good. And a transformation with too big a step is also a considerable challenge for Wahaha.

**-03-
### **Despite the development dilemma, Wahaha will not fall**
Although development is not as smooth as at its peak, Wahaha is still a food and beverage giant. I do not agree with the remarks that Wahaha will quickly decline.

**Some say that in the internet age, Zong Qinghou opposes e-commerce, which goes against the trend.**

In fact, although Wahaha was late in e-commerce layout, Zong Qinghou is not simply opposed to e-commerce. His original words were: 'I was not interested in them (e-commerce) before because I was dissatisfied with burning money to buy traffic and selling counterfeit goods. I am not opposed to e-commerce, and I think e-commerce should go deep into rural areas to help farmers sell products, because farmers are relatively isolated from information and increase production without increasing income.'

Considering the basic attributes of Wahaha's drinking water products, which are heavy and low value-added, his previous caution towards e-commerce is understandable. Although the timing is now a bit late and innovation has been criticized, Wahaha's foundation has not been shaken.

Why do I think Wahaha will not fall (at least not quickly decline in the short term)? The source of confidence lies in **Wahaha's 'internal strength and external skills' are both intact.**

**Wahaha's 'external skills' are their brand power and channels. Wahaha's accumulated strength over the years is unquestionable.** Moreover, data shows that in 2018, Wahaha's revenue recovered to 46.89 billion yuan. Although the 2019 performance was not announced, Zong Qinghou himself said that Wahaha's sales in 2019 would increase by 50%. Based on this speculation, this year's sales may exceed 50 billion yuan.

In terms of consumer awareness and reputation, it is not weaker than other brands and companies. Its own scale is still among the giants in the industry. And more importantly, its **'internal strength' is abundant—strong cash flow.**

Take the current pandemic as an example. Many companies faced difficulties in capital turnover during the pandemic and had to cut salaries, lay off employees, and shrink their operations. In contrast, Wahaha? In February, when everything was shut down, Wahaha lost only 100 million yuan. But its bank account still had over 10 billion yuan in cash as usual.

Compared to companies that over-expanded and fell into debt crises, Wahaha is another 'extreme'. It has stuck to its main business of beverages, and since its early days, it has insisted on not borrowing a penny of external debt for over 30 years. For this reason, Wahaha was once questioned as 'conservative'.

But, fast is slow, and slow is fast. A company is like a person; sometimes it gets sick. How can it improve its immunity? From a business and financial perspective, developing to such a scale while insisting on not borrowing a penny for decades is overly 'conservative', but in times of crisis, this is the trump card that allows the company to withstand pressure and survive the winter. I believe everyone has felt this deeply during the pandemic.

Take the construction of the e-commerce platform and the subsidized loans to help young people start businesses as an example. They plan to invest billions, but they don't need a penny from investors or banks.

Such a Wahaha, you tell me it will fall? Not even in ten years. Wahaha, which is constantly seeking new paths, still has the confidence to return to its peak.


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