Click to read the original article for details. Author: A Mu Source: Zan Tan Pin Pai Jia (ID: zantanlife) The news that Wahaha is going public is rampant. Founder Zong Qinghou, as the strong leader of Wahaha, once made the bold statement that "Wahaha will never go public." It was not until recently that Zong Qinghou's daughter, Zong Fuli, who serves as the head of the Public Relations Department of Wahaha Group, finally responded in a media interview: "Wahaha's IPO is a normal move," signaling to the outside world that it is preparing to go public. The time-honored brand Wahaha holds a variety of star products that are popular nationwide, such as Nutri-Express and AD Calcium Milk. It also once defeated Coca-Cola with its "Future Cola," becoming a marketing legend. According to public data, Wahaha's sales reached 78.3 billion yuan in 2013, but then began to decline. From 2014 to 2017, the company's revenue was 72.8 billion, 67.7 billion, 52.9 billion, and 45.6 billion yuan respectively, shrinking by more than 30 billion yuan in five years. Despite this, Wahaha sells more than 30 billion bottles of various beverages a year, equivalent to 21 bottles per Chinese person, and remains China's largest beverage company. What is the secret behind its sales? Channel Innovation: The Joint Distribution Model When it comes to Wahaha, one cannot avoid mentioning the "joint distribution model" that Zong Qinghou pioneered in the market channel in the 1990s. Generally, consumer goods go from the brand to the consumer through a process: headquarters - branches - first-level wholesalers - second-level wholesalers - third-level wholesalers - ... - consumers. If a brand encounters unreliable distributors, they often ignore agreements, delay payments, delay shipments, or disappear, leading to a long cycle for the brand to recover funds. Zong Qinghou proposed the joint distribution model, which overturned the original cooperation model: First, distributors were required to pay a deposit annually, with payment before delivery, but at the same time, it was promised that the deposit would earn interest higher than that of banks. This operation built a community of interests among "brand + special first-level wholesalers + special second-level wholesalers," and later even included lower-level distributors, with a reasonable price system for profit distribution, giving each level of distributor appropriate profit margins. In this way, Wahaha established a new market contract relationship with distributors. On the one hand, it eliminated profit-driven distributors; on the other hand, because distributors paid first, they were greatly motivated to sell after taking goods, accelerating Wahaha's national expansion. Creating a Sense of Scarcity Brands that have come through the 1990s experienced the golden age of media centralization, where advertising on TV and in newspapers was the most common marketing method. For Wahaha, the joint distribution model ensured sufficient liquidity, so it was generous in advertising. The overwhelming TV ads, print ads, and outdoor ads were not only for consumers but also for distributors. However, since the sales of new products were difficult to estimate, local distributors were inevitably passive and hesitant to take goods. When local sugar and wine companies showed no interest in new products, Zong Qinghou and his colleagues would go to a small local hotel, flip through the local phone book, and call shopping malls and sales companies one by one. The purpose was simple: to ask "Do you have Wahaha nutrition liquid for sale?" creating an atmosphere that consumers were looking forward to it and the market was scarce. It is said that after a round of "fake hunger marketing," the sugar and wine companies would come to discuss cooperation within a few days. Making Promotions the City's Hot Spot In 1991, Wahaha was about to launch a new fruit-flavored milk drink. Hangzhou was Wahaha's home base and the first market to conquer for the new product, but free tasting promotions had little effect. Wahaha placed an advertisement in the newspaper with the largest circulation in Hangzhou. What was special was that it also released a discount signal: consumers could exchange the newspaper ad clipping for a bottle of fruit-flavored milk. Buying a newspaper cost only half the price of the milk, equivalent to a half-price coupon. The key was that free products inevitably make people defensive, but products bought at half price make consumers feel they got a great deal. By cleverly tapping into consumers' penny-pinching psychology, the gimmick of buying a newspaper and getting a drink was novel enough in the 1990s, and the activity received a strong market response. The newspaper immediately printed an additional 700,000 copies, and the shopping malls and squares participating in the exchange were packed, with consumers clamoring to exchange for the milk. Counters were even knocked over, and police had to be called to maintain order. It was this activity that allowed Wahaha to open up the market for fruit-flavored milk. College Students "Voluntarily" Promote the Brand by Word of Mouth For the beverage market and even the FMCG industry, college campuses have always been a battleground for businesses. At some point, Wahaha began to enter campuses to hold marketing practice competitions, hoping to mobilize the flexible and innovative minds of college students to contribute ideas for the brand. In simple terms, by sponsoring campus club events, students form teams, participate in developing different marketing strategies to promote and sell products on campus, and finally compete based on criteria such as creativity and sales volume. Image source: Internet From the perspective of college students, participating in such competitions allows them to practice, exercise their thinking, and enrich their personal experience. From the brand's perspective, it not only successfully refreshes its presence among college students but, more importantly, lets the participating students help sell products, using creativity and personal connections to boost buzz and sales, achieving promotional goals. After a round of competition, these energetic college students also develop a special memory and affection for the brand. To this day, Wahaha continues to hold marketing practice competitions at various universities. Catchy Copy Invades Consumer Minds Many people don't know that Wahaha has launched more than 300 products, but a glance at the advertising slogans can probably tell you they are from Wahaha:

Wahaha: Drink Wahaha, eat with a good appetite

AD Calcium Milk: Sweet and sour, nutritious and tasty, drink it every day, truly happy.

Future Cola: Happy events, of course, Future Cola

Nutri-Express: Drink a bottle in the morning, energetic all morning

Shuangwaiwai: Eat well, intestines comfortable

Nutri Fruit Granules: Nutrition plus fruit granules, healthy! Love beauty! The style of Wahaha's advertising slogans almost always has these characteristics: strong taste hints, straightforward functional/emotional appeals, and colloquial direct statements. Most of these slogans originated from founder Zong Qinghou. This kind of direct, catchy copy is almost magical, and with the effect of bombarding advertising, it unconsciously enters consumers' minds and forms memories. Conclusion Wahaha once relied on excellent marketing methods to consolidate the foundation of its beverage empire and has weathered more than 30 years of storms. Unfortunately, in recent years, it has been deeply trapped in the whirlpool of brand aging. Its beverages have been labeled as "rustic." The flagship product Nutri-Express tried to keep up with the times by changing its packaging, but consumers complained it was "like drinking paint." Not long ago, the classic product AD Calcium Milk launched nostalgic bottles to evoke consumer sentiment, but it fell into a vulgarity controversy due to its copy. "In high school, someone said that drinking AD Calcium Milk could change from A to D, and then a trend started, and all the girls in the class began drinking AD Calcium Milk." In terms of product innovation, Wahaha's years of follow-the-trend operations have also been criticized by the market. Brands lacking innovation and personality find it difficult to impress the younger generation of consumers. Image source: Zhihu @Daxueshenghuo Zahuopu Wahaha has also sought diversified transformation: in 2002, it opened a clothing company to sell children's clothing; in 2010, it announced entry into the infant formula field, OEM-producing "Edison Milk Powder"; in 2012, it suddenly ventured into commercial real estate, opening the Waou Mall; in 2013, it high-profile entered the liquor industry, launching Lingguo Guojiu; in April last year, it launched the Tianyan Jingjing series and started "WeChat business selling"... but all with little success, and blind expansion has caused the company to take many detours. Can the beverage empire Wahaha successfully overcome its mid-life crisis and go public as desired?