Article | New Distribution Team Xiaolong Since 2013, Wahaha's performance has been continuously declining. Suddenly, many friends in the industry are talking about Wahaha's fall, and some even boldly claim that Wahaha will die. Will Wahaha really die? Just like Metersbonwe and Li Ning, which were controversial in 2016, they may not fall so easily. They are temporarily asleep, but when they wake up, they are still lions! (Li Ning announced profitability in the first quarter of 2017) So what exactly has caused Wahaha's performance to decline for three consecutive years? Is it management? Marketing? Or brand strategy? 1 Product Failure Everyone knows the principle that "the core of a great brand is the product." Let's look at what problems Wahaha's products have:

  1. Products lack a reason to move consumers. Physical products: Whether it's product packaging or product variety, Wahaha has been basically stagnant for decades, but the consumer group is no longer the consumer of ten years ago. Coincidentally, the target consumers may not be that nostalgic. When others can bring the freshness that you cannot provide, the loyalty of the target consumer group is destined to greatly decrease. Content products: This term may be unfamiliar to everyone. Xiaolong adds another virtual existence to current products and calls it content products. This kind of product comes from fashionable product design, packaging design, and the copy content on the product. Looking at our Wahaha again, it seems difficult to jump out of the inertial thinking of "channel is king." It still examines and measures consumers from its own perspective, and they extremely lack content products built on physical products. Whether it's Nongfu Spring's Tea π or Uni-President's Xiao Ming Classmate, they have done very well in moving consumers. Exquisite product packaging, diverse product categories, or fictional characters are both talented and good-looking.
  2. New product development cannot satisfy consumers' "flash" curiosity. "Flash" curiosity: Based on the full guarantee of "safety needs," people are more willing to try new things and bravely satisfy their innate curiosity. When curiosity is satisfied, everyone tirelessly tries to find the next new thing. Xiaolong calls this existing consumer behavior "flash" curiosity. For example, the recently popular Mourning Tea was highly sought after based on curiosity and freshness as a conditioned reflex. When everyone's curiosity and freshness are satisfied, and when everyone gets used to it, attention to Mourning Tea will quickly shift. 2 The market is being segmented step by step, and then segmented again Standing in the supermarket beverage section, you will find that dozens or even hundreds of beverage categories have quietly appeared on the shelves. The biggest difference from yesterday is that consumers have more and more choices, and beverage categories are continuously segmented.
  3. The beverage market before 2013 Keyword 1: Few categories Compared to today's market where brands "contend," yesterday's market was basically dominated by three market leaders: Wahaha, Uni-President, and Master Kong. With complete channels and unique TV media communication, their advantageous position was difficult to shake. Keyword 2: Homogenization Thinking carefully, there was a particularly interesting point in the market at that time. Whether it was iced black tea or fresh orange juice, the three major brands were very similar in product packaging or taste. We can also see that they basically did not pay much attention to new product development, and Wahaha is still like this today. Keyword 3: Consumer safety At that time, our country was not so perfect in food safety. Consumers' safety needs were still the primary need, and for consumers, they trusted big brands more. What about today? Is the current market still like this? The answer is definitely yes, and there is no need to say more.
  4. Market followers springing up like bamboo shoots after rain a. With the maturity of e-commerce platforms, the importance of channels has been repeatedly weakened. Small brands and small enterprises have more possibilities for growth, while the advantages of big brands have been repeatedly reduced; b. With media explosion, small brands have more opportunities to speak out. As long as they are novel enough and can stimulate consumer resonance, you can stand out;
  5. The national environment of mass entrepreneurship and innovation has catalyzed the creation of many brands. They continuously segment the market, segmenting again and again. 3 Upgrade of Business Profit Logic
  6. Shortened return cycle The return cycle is based on the timeliness of brand voice. In the era of information explosion, countless pieces of information pass through our brains every day. The more information, the shallower the memory, and the shorter the timeliness of this voice. Teacher Luo from Logic Thinking once proposed the concept of Gross Domestic Time (GDT), and information overload is the same as information blank. Some smart small brands seize the opportunity of shortened return cycles, increase the frequency of voice, and add novel brand content. In terms of brand voice communication, they have gained an advantage over the traditional model of big brands. Catering to this shortened return cycle, they continuously increase the frequency of voice and gradually accumulate brand awareness.
  7. O2O and B2B transformation With the improvement of e-commerce and logistics, and the transformation and upgrading of the Internet, every transformation brings new business logic and new industry gameplay. The model of sticking to "channel is king" is incompatible with the new model of "content is king" and "marketing is king." For details, see the sharing by Teacher Zhao Bo of New Distribution. Facing the upgrade of business profit logic, Wahaha seems to have no major moves, and even continues to use the previous routines. 4 Replacement of Target Consumer Groups This is based on the rapid development of our country, which has crossed three levels of consumption concepts in less than twenty years. Each replacement of consumer groups brings great changes in business logic. They are: First generation replacement: being able to buy goods — buying safe goods Second generation replacement: being able to buy safe goods — buying quality goods (current state) Third generation replacement: being able to buy quality goods — buying goods that are both affordable and quality (Xiaolong's predicted future) 5 Brand Aging Problem More Severe Than Product Aging The problem of brand identity and the tone of "youth circle of friends" Human aesthetics tend to evolve with reference to the external environment. Looking at the fashion of the 1970s and 1980s with today's eyes, you may be very puzzled. Similarly, if Wahaha's brand identity was placed yesterday, we might feel it was okay, but let the post-90s or even post-00s evaluate their brand identity and the concepts conveyed to consumers. 80% of people will definitely respond "low, rustic!" Let's look at those brands that have been around for decades or even hundreds of years. They have continuously changed their brand identities to conform to the aesthetics of the times. For example, Coca-Cola, Pepsi, Audi... Their changes follow the replacement of consumer groups, and they even lead fashion and public aesthetics. In this regard, our Wahaha seems not very bold. Aging at the management level For the Wahaha Group, the main strategic decision-making power may be in the hands of the "elders." They have rich experience and knowledge. But in terms of courage and insight into young people's thinking, they obviously do not have an advantage. Xiaolong has a certain feeling that for an enterprise, strategy will become more and more important, and it will surpass its current status. The times belong to young people, and everyone must admit this point! Give young people more opportunities to show themselves; their thoughts must be at the forefront of the times. Whether you believe it or not, accept it or not, it is a fact! If you still haven't figured out why Wahaha's performance has been declining for three consecutive years, then it is recommended that you go back and read it again. If your brand happens to face such a problem, then it is recommended that you calm down and think carefully! Wahaha's biggest problem is "responding to all changes with constancy." Xiaolong does not think Wahaha will die. Because its brand power and brand assets are there, as long as it is willing to change and dares to change, it can recover again. -END-