---
title: "Jinmailang and Baixiang: Once Equally Matched, Why the Huge Gap Today?"
description: "Once evenly matched rivals in China's instant noodle market, Jinmailang and Baixiang have diverged dramatically over the past decade due to different strategic choices by their founders. While Baixiang faltered after a failed premium positioning and internal turmoil, Jinmailang thrived through disciplined execution, innovative channel management, and a focus on core markets."
author: "澄韵"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2019-06-09"
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# Jinmailang and Baixiang: Once Equally Matched, Why the Huge Gap Today?

> Once evenly matched rivals in China's instant noodle market, Jinmailang and Baixiang have diverged dramatically over the past decade due to different strategic choices by their founders. While Baixiang faltered after a failed premium positioning and internal turmoil, Jinmailang thrived through disciplined execution, innovative channel management, and a focus on core markets.

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**The biggest fish always grow in the biggest river.**
In 2018, out of 103.6 billion servings of instant noodles consumed globally, Chinese consumers ate 40.25 billion, accounting for 38.9%. In this biggest river, the world's largest school of fish grew: Master Kong, Uni-President, Hualong, and Baixiang.
When recounting these brands that survived to dominate, most people forget or never knew that the king of the instant noodle market in the 1980s was Huafeng Instant Noodles.
The stories of today's four major instant noodle brands in the mainland market all began in the 1990s.
In January 1992, Uni-President Group invested in its first instant noodle enterprise in Xinjiang; in August, Wei Yingzhou, who had faced setbacks in Taiwan, produced the first pack of Master Kong instant noodles in Tianjin.
**In 1994, in Xifan Village, Longyao County, Hebei Province, 34-year-old Fan Xianguo scraped together a few tens of thousands of yuan and cautiously founded Hualong.**
**Three years later, 35-year-old Yao Zhongliang gave up his official career to become the general manager of a small state-owned factory on the verge of bankruptcy, starting his entrepreneurial journey pedaling a tricycle. This was the future Baixiang Food.**
**The urban market was mainly a competition between Master Kong and Uni-President, known in the industry as "good classmates"; the rural market was mainly a confrontation between Hualong and Baixiang, known as the "Dragon-Elephant Struggle."**
Fan Xianguo and Yao Zhongliang, similar in age and era, even had very close market positioning and product prices. The two companies they led, Hualong and Baixiang, seemed like twin stars, always compared with each other.
These twin stars started at the same point and even developed at the same pace for many years, but due to the different founders, they gradually took different trajectories and fates over the past decade.
**One Dragon, One Elephant: The Brilliantly Rising "Twin Stars"**
In 1994, Fan Xianguo, who was doing well in the rock sugar industry, wanted to make instant noodles but was opposed by shareholders. He decisively started a new venture and founded "Hualong," launching the 0.55 yuan Hualong Xiaozi the same year, breaking into the rural market with low prices.
In 1997, Yao Zhongliang, who took over the "mess" of Baixiang, only asked the superior grain department for one condition: "autonomous employment rights."
Yao Zhongliang's first action was to let a group of old employees "take paid long leave"; the second was to recruit salespeople from society, with only one requirement: "willing to obey and able to endure hardship." He himself rode a broken tricycle, sweeping the streets with his salespeople, promoting Baixiang at street-side shops and vegetable markets.
Inside Baixiang, there has always been a marketing spirit called "Four Thousand and Four Ten-Thousands," originating from Yao Zhongliang, which means "travel thousands of mountains and rivers, think of thousands of ways, say thousands of words, sell to thousands of households."
**Hualong, breaking out from rural areas, developed rapidly. In 2001, Hualong's total assets reached 3 billion yuan, with annual sales exceeding 1.5 billion yuan. In the same year, Yao Zhongliang led a sales team armed with the "Four Thousand and Four Ten-Thousands" ideology, pushing Baixiang's sales past 1 billion yuan, multiplying dozens of times in four years.**
**"Dragon-Elephant Transformation": Baixiang Wins the First Round**
After 2000, Hualong and Baixiang successively faced transformation pressures, but the pressures they faced were quite different.
Fan Xianguo's main pressure was to move products from low-end to high-end, the pressure of "entering the city." Yao Zhongliang faced the constraints of the system, the pressure that how Baixiang developed was not solely his decision.
In 2002, Yao Zhongliang initiated a five-year restructuring of Baixiang. Although it eventually succeeded, many development opportunities were missed. Yao Zhongliang once said, "If it hadn't been for the five years of turmoil, 'Baixiang' would have far exceeded its current scale."
Also in 2002, to break into the city, Fan Xianguo showed great boldness. He decisively abandoned the well-established Hualong brand and created a new brand, "Jinmailang."
With the "Jinmailang" pure wheat noodles, characterized by "elasticity," "resistant to cooking, resistant to soaking, and tough," Fan Xianguo advanced into the city, declaring war on Master Kong in the mid-to-high-end market.
To enter the city, in 2004 Hualong formed a joint venture with Japan's Nissin to improve product technology and set the goal of becoming the number one domestic instant noodle brand.
During the same period, "Jinmailang" invested heavily in sports marketing, sponsoring the Antarctic expedition team and cooperating with the World University Games. In 2006, Jinmailang partnered with Uni-President to enter the beverage industry.
While Jinmailang was at its peak, focusing all efforts on attacking the city, it neglected its original low-end market. The low-key Baixiang seized this opportunity and attacked Hualong's rear.
In 2004, Baixiang launched Dabone (Big Bone) noodles. Dabone took a unique approach, not promoting the process or the noodles themselves, but instead promoting "bone collagen" from the soup base perspective. In 2005, Baixiang Dabone's single product sales reached 570 million yuan, exploding at a growth rate fifty times the industry average.
The success of Dabone brought Baixiang unexpected benefits: successfully breaking into the first-tier market, shedding the low-end image of the Baixiang brand, and joining the ranks of first-tier brands. With a single product to pry open the first-tier market, Baixiang Dabone created a miracle.
Jinmailang, busy fighting Master Kong, gave up the 1 yuan price band in the low-end market. Baixiang seized the opportunity to reduce the weight of Dabone noodles and successfully entered the 1 yuan price band, taking away most of Jinmailang's low-end market share.
**By 2011, Baixiang had captured nearly 18% of the national instant noodle market share. Jinmailang, unable to shake Master Kong in the city and facing turmoil in the low-end market, was in an awkward position.**
**Two Positioning Disciples: One Wins, One Loses**
After 2010, China's instant noodle market entered a period of stagnation, with volumes declining from a peak of 50 billion servings. Master Kong and Uni-President launched destructive price wars year after year.
When the leader doesn't upgrade and relies on scale for price wars, the followers naturally find it harder. Around 2013, Hualong and Baixiang both placed their hopes on "positioning" theory, becoming disciples of positioning.
Both were positioning disciples, but Yao Zhongliang and Fan Xianguo hired different teachers. Yao Zhongliang hired Deng Delong of Trout & Partners China, while Fan Xianguo hired Zhang Yun of Ries China as external consultants.
For nearly 10 million yuan, Deng Delong prescribed Baixiang the positioning of "Dabone Expert." In the three years after 2014, Baixiang strongly promoted the upgraded 2.5 yuan Dabone noodles in the market. The method was also Trout & Partners' suggestion: invest all company resources, called "blanket" promotion.
**"At that time, investment exceeded 500 million yuan. Putting all the profits from Baixiang's basic business into promoting Dabone, bleeding one side to transfuse the other, was the most important factor leading to Baixiang's rapid decline."** A former senior executive of Baixiang told New Distribution.
When the leader Master Kong sealed the entire price band around 2 yuan, the follower Baixiang tried to force an upgrade to 2.5 yuan, and the result was destined to be tragic.
Facing objections from senior executives, Yao Zhongliang overruled them all, choosing to continue insisting on the "Dabone Expert" positioning and continue investing. Going down the wrong path for a full three years, Dabone suffered a disastrous defeat, losing both sales and profits miserably.
Baixiang, severely weakened, never again made achievements in products or brands, and the Dabone category it created failed to flourish.
**Fan Xianguo hired Zhang Yun of Ries China and took a completely opposite path from Baixiang.**
Zhang Yun believed that Jinmailang's most competitive product at the time was still the most popular low-end instant noodles, and it should be restored to the number one position in that market, establishing advantages in that segment before considering other directions.
Accepting Zhang Yun's advice, Fan Xianguo returned to the most familiar market, focusing entirely on the retail 1.5 yuan Dajinye. Dajinye increased the previous "Jinye" noodle block to 100 grams, emphasizing large quantity and value. Dajinye began to explode in volume from 2014, becoming Jinmailang's most competitive product at the time.
**In 2016, Jinmailang followed up with "One and a Half Bucket" and "One and a Half Bag" products, first breaking through in the value-conscious Northeast market, then moving south to save many previously defeated markets, completely surpassing Baixiang.**
**The Difference Between "Ambition" and "Dream"**
For entrepreneurs, it's hard to distinguish between "ambition" and "dream." This is an arena that doesn't care about origin or background; opportunities always belong to those who dare to pursue.
Fan Xianguo and Yao Zhongliang share many similar traits: adventurous, decisive, and persistent. However, business is ultimately a game of restraint; any desire beyond one's capabilities will lead to terrible consequences.
Fan Xianguo is extremely enterprising and more open-minded, which is why he could cooperate with Nissin and Uni-President successively. To enter the city, Fan Xianguo invested heavily and was determined in Jinmailang. Even when setbacks occurred, Fan Xianguo didn't get discouraged; if it didn't work this time, he'd try again next time.
"The world changes through passion and impulse, but is maintained through calm and reason." Fan Xianguo's words well illustrate his transformation from an adventurer to a strategist.
In recent years, under the guidance of Ries China, Jinmailang has made many breakthroughs in products, successively launching star products like Dad's Kitchen series, Liangbaikai (cool boiled water), and Manton Town. At the same time, Jinmailang has become much more low-key. Without the previous overwhelming celebrity advertisements, these products are promoted steadily around target consumer groups.
Yao Zhongliang also made many other attempts: planning to go public, making beverages, Fuxi Noodle Workshop, etc., but the results were poor. Although the direct financial losses were not significant for Baixiang, the lost time and the distraction from the main business were immeasurable.
In 2012, Yao Zhongliang quietly rebranded Baixiang, abandoning the original logo featuring a cute, honest white elephant holding a bowl of noodles, replacing it with a cloud-shaped logo. The rebranding reflected the boss's mindset.
In 2009, Baixiang moved its headquarters to Beijing, losing a group of elites; in 2014, after a failed IPO, Baixiang moved back to Zhengzhou, losing more talent. Baixiang, once hailed as the "Whampoa Military Academy" of instant noodles, suffered greatly from a declining main business, unsuccessful Dabone, low morale, and constant upheaval.
**Fan Xianguo's Secret Weapon**
In the eyes of Jinmailang employees, Fan Xianguo is extremely strict and hardworking. At monthly marketing meetings, all directors and department heads must report directly to him. Under pressure, marketing cadres are trembling, especially those ranked on the "bear list" for poor performance; they definitely can't sleep the night before reporting.
Fan Xianguo personally reviews team management and cadre weekly plans, and often organizes online meetings with distributors and salespeople. He also personally participates in distributor management, terminal personnel management, monthly and quarterly incentive plans, never being sloppy.
In contrast, Yao Zhongliang delegates management more, pushing it to senior managers, and generally only listens to operational analysis reports.
Fan Xianguo believes that high rewards produce brave men; while setting high goals, he often accompanies them with high rewards, whereas Yao Zhongliang is relatively stingy. The salaries at Hualong and Baixiang are similar, but when it comes to year-end bonuses, the difference between the two companies is huge.
Besides accurate market predictions and high demands and rewards for talent, **Fan Xianguo also has a "secret weapon" that is little known to the outside world: the "Four-in-One," which he has set as Jinmailang's marketing strategy unchanged for ten years.** It is actually an organizational innovation and upgrade based on deep distribution. It's no exaggeration to say that **without the "Four-in-One," there might not be the successful Jinmailang of today!**
**The Four-in-One includes: vehicles, personnel, regional contracting, and terminal machines.**
**Without vehicles, there are no outlets; without outlets, there is no sales volume.** Controlling outlets allows sales to land. To help distributors improve their control over outlets and achieve stable sales growth, Fan Xianguo proposed as early as 2011 that the Four-in-One would become the company's highest-level decision as a prerequisite for Jinmailang's cooperative relationship with distributors.
**Vehicles alone are not enough; effective visits by personnel are needed to lock in sales:** Personnel management refers to relying on fair and truthful incentive measures to implement each salesperson's combat effectiveness at terminal outlets.
**Regional contracting solves the problem of managing scattered delivery workers in the FMCG industry. Jinmailang encourages distributors to establish win-win cooperative relationships with delivery workers:** By allowing delivery workers to contract, especially contracting the distributor's delivery vehicles, delivery workers become partners, essentially forming initiative in sales work.
**Terminal machines: another powerful management weapon.** Fan Xianguo praises the terminal machine as the strongest operational tool in the industry. The uniqueness of Jinmailang's terminal machine lies in: **it can quantify and standardize all work content of personnel working in the market, and establish a complete incentive and evaluation system around consumer purchases, truly achieving process management for frontline employees.**
Since 2012, Fan Xianguo has insisted on implementing the "Four-in-One" management reform in channels, and its subsequent power has become apparent: **distributors implementing the Four-in-One saw average sales profit increase by 127%, and a large number of instant noodle sales tycoons with annual profits exceeding one million yuan emerged.**
According to internal data from Jinmailang provided by insiders, **in 2016, while China's instant noodle market was shrinking, Jinmailang achieved counter-trend sales growth of 6.4%.** From January to November 2018, Jinmailang's beverage business grew 39%, and noodle products grew 31%. According to AC Nielsen data, **in the first three quarters of 2018, Jinmailang's beverage growth rate reached 37%.**
**Wenshi Comment: Finding the Answer to Why a Company Grows**
For a long time, the "Dragon-Elephant Struggle" in instant noodles has been a wonderful sight in the industry. Their unremitting efforts and explorations have provided marketers with extremely important marketing experience and models.
Marketing expert Liu Chunxiong said, "Growth changes destiny." Everyone values growth, but the perspective from which you view growth is important. Most of the time, the growth we value refers to the result. The execution level naturally pursues results, but if the strategic level focuses too much on results, companies often fall into confusion.
Bodhisattvas focus on causes, mortals on results. Finding the cause of growth is more important than the result of growth. Among all causes of growth, two are most important: the first is people, the second is time.
First, the founder's boundary is the company's boundary; the founder's limitation is the company's limitation. In the development of Baixiang and Hualong, it was precisely because of the differences between Fan Xianguo and Yao Zhongliang that they made different decisions at various historical junctures, determining the different fates of their companies.
Second is talent. Baixiang achieved success because of its abundant talent and the "Four Thousand and Four Ten-Thousands" marketing spirit, but also declined due to the loss and gap of a large number of marketing talents. Fan Xianguo understands human nature, rewards and punishes clearly, effectively stimulates the team's wolf-like spirit, and implements the effective "Four-in-One" tactic, allowing sustained growth for many years even when the industry declined.
The second important cause of growth is time. In today's era where the "explosive product theory" prevails, talking about leaving growth to time is quite unpopular. But the facts we see are: Jinmailang's "Four-in-One" tactic has been persisted for 7 years; "Tang Daren" (Soup Master), which supports half of Uni-President's profits, was launched in 2008; "Jiang Xiaobai," which was popular in 2018, began operations in 2012.
Hualong and Baixiang are two excellent companies. The greatest inspiration they give us is that **in the pursuit of corporate growth, we often need to forget about growth, find the right cause, the right method, and then give a little patience.**


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