---
title: "Lou Xiangpeng: Wahaha's Anxiety and the Great Transformation of the Consumer Market"
description: "Innovation is the passport of disruptors, while conservatism is the epitaph of leaders. In today's rapidly changing era, even giants like Wahaha face unprecedented anxiety and confusion amid declining sales. Any enterprise, regardless of past glory, must continuously monitor consumption changes and maintain reverence for consumers—this is the only path to growth and development."
author: "娄向鹏"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2017-07-08"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/lou-xiangpeng-wahaha-s-anxiety-and-the-great-transformation-of-the-consu-abb3e199/"
markdown: "https://xinjignxiao.com/en/articles/lou-xiangpeng-wahaha-s-anxiety-and-the-great-transformation-of-the-consu-abb3e199.md"
original_source: "https://mp.weixin.qq.com/s/qOBNABvrId1Df5pQ1V07lg"
translation: "https://xinjignxiao.com/zh/articles/%E5%A8%84%E5%90%91%E9%B9%8F-%E5%A8%83%E5%93%88%E5%93%88%E7%9A%84%E7%84%A6%E8%99%91%E4%B8%8E%E6%B6%88%E8%B4%B9%E5%B8%82%E5%9C%BA%E7%9A%84%E5%A4%A7%E5%8F%98%E5%B1%80-abb3e199.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/lou-xiangpeng-wahaha-s-anxiety-and-the-great-transformation-of-the-consu-abb3e199/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# Lou Xiangpeng: Wahaha's Anxiety and the Great Transformation of the Consumer Market

> Innovation is the passport of disruptors, while conservatism is the epitaph of leaders. In today's rapidly changing era, even giants like Wahaha face unprecedented anxiety and confusion amid declining sales. Any enterprise, regardless of past glory, must continuously monitor consumption changes and maintain reverence for consumers—this is the only path to growth and development.

Click image for details
**Introduction: Innovation is the passport of disruptors, while conservatism is the epitaph of leaders. In today's rapidly changing era, even giants like Wahaha face unprecedented anxiety and confusion amid declining sales. Any enterprise, regardless of past glory, must continuously monitor consumption changes and maintain reverence for consumers—this is the only path to growth and development.**
By Lou Xiangpeng
Recently, Wahaha, once the benchmark of the food industry and an empire of food and beverages, has become the focus of financial media, even a target of criticism. It's no wonder: Wahaha's annual sales plummeted from a peak of nearly 80 billion yuan in 2013 to 50 billion yuan in 2016, like a roller coaster. Although the post-decline figure is still unattainable for countless companies, for Wahaha, a decline of nearly 40% is astonishing. We can also intuitively see that Wahaha products are now rarely seen on mainstream shelves in many large cities.
Media reports that Zong Qinghou, who had always dismissed e-commerce, secretly met with Liu Qiangdong, indirectly indicating that Wahaha's traditional competitive advantages are gradually eroding. On June 25, Wahaha signed an agreement with Shenlan Technology to deploy 100,000 TakeGo unmanned stores over 10 years, with 10,000 units in the first 3 years.
At the "2017 China Healthy Juice Summit & Shan Guo Yin Xiang 100% Cold-Pressed Juice" press conference held on July 4, Lou Xiangpeng, Chief Advisor of Shennong Island, Chairman of Fula Brand Marketing Consulting, and Head of the Brand Agriculture Research Group at Renmin University of China, was invited to attend and delivered a keynote speech titled "Being a New Four-Possession Person: The Beverage Business in the New Consumption Era." He astutely analyzed that Wahaha's anxiety partly stems from itself, but also from the industry's reshuffling and restructuring. Competitors in every niche are challenging, encroaching upon, and even disrupting the former giants, and the future beverage market is bound to undergo major changes.
## From Channel Domination to Content Exclusivity: China's Consumer Market Has Changed
China's food and beverage market has changed; it has shifted from channel domination to content exclusivity. In this new consumption era, almost all traditional enterprises have suffered setbacks. As the most representative successful enterprise of the channel-domination era, Wahaha faces greater impacts than others. The new consumption era has arrived, and all enterprises should recognize this and make changes.
Mr. Lou Xiangpeng pointed out that in recent years, with the continuous upgrading of mass consumption demands and concepts, as well as the rise of the post-90s and post-00s generations, the inherent competitive landscape of China's beverage market has been gradually broken, and industry structural changes and restructuring have begun.
The first to bear the brunt is the beverage leader Wahaha, whose annual sales dropped from nearly 80 billion yuan in 2013 to 50 billion yuan in 2016. Its main business has shown a rapid decline, and correspondingly, Wahaha products are now rarely seen on mainstream shelves in many large cities. Recent news that Zong Qinghou secretly met with Liu Qiangdong also indirectly indicates that Wahaha's traditional competitive advantages are gradually being lost. Wahaha's anxiety partly stems from itself, but in niche areas, competitors' direct challenges, encroachment, and even disruption are more direct causes.
In fact, looking at the global market, examples similar to Wahaha are not uncommon.
The emergence of the iPhone challenged and disrupted the former dominators Motorola and Nokia, and the latter are now rarely seen in today's market. Now Huawei and Xiaomi have begun the same disruptive path as Apple did, which has also led to Apple's declining market share in China in recent years.
Similarly, Tesla's emergence is catching up with and even beginning to disrupt traditional automakers BMW and Mercedes-Benz, while mobile payments brought by Alipay and WeChat have profoundly changed Chinese people's travel and consumption habits, putting pressure on the four major state-owned banks like ICBC, which have had to follow suit and change.
Shuke toothpaste, with annual sales exceeding 3 billion yuan, has successfully shaken the leading positions of Colgate and P&G in the toothpaste market in local markets and channels, while Baijia雀羚 has also achieved significant gains in fighting foreign brands, even dominating in some niche areas.
Returning to the beverage market, we can see that Six Walnuts has reached a value of over 10 billion yuan, completely disrupting the pioneer brand Dazhai in walnut milk; Special Forces has benchmarked against the old coconut milk brand Coconut Palm in the coconut juice sector; and even more, Monster and Dongpeng Special Drink have seized the gap in the energy functional drink market, benchmarking against the dominant Red Bull. The most exemplary case, arguably the biggest disruption in the industry, is Nongfu Spring, which has faced and disrupted six major food and beverage giants: Wahaha, Master Kong, Uni-President, Coca-Cola, PepsiCo, and Nestlé.
Does Nongfu Spring's successful disruption of giant brands indicate that only large enterprises of similar size can achieve this? The answer is no; many small and medium-sized enterprises also have opportunities.
The little-known Inner Mongolia Xueyuan Dairy innovatively launched a Mongolian-style yogurt called Lan Gege, which became a hit in Beijing and then gradually expanded to East and South China markets. This innovative brand and product, appearing out of nowhere, made Mengniu and Yili feel a crisis. In the subsequent market, we can see the two dairy giants following Lan Gege: Mengniu launched a flavored yogurt under the Telunsu name, and Yili launched a cooked yogurt with Inner Mongolian flavor (which Lan Gege was the first to make), and they immediately launched discount promotions, seemingly intending to suppress it. It is reported that Xueyuan Dairy is recently adding production lines, and the market operation of the Lan Gege brand is gaining momentum, with its unique product advantages becoming a strong force to disrupt industry inertia.
## Three Sins of Traditional Enterprises Give Opportunities to Latecomers
**The rise of these new brands further proves the three sins of traditional industries (enterprises):**
**First Sin: The Masses Are Dissatisfied**
Large enterprises focus more on economies of scale and neglect consumer needs. With years of unchanged product features, consumers have to make do.
**Second Sin: No Leader in the Industry**
In many fields, there is no leading enterprise to guide, resulting in a fragmented market where counterfeit, chaotic, and poor-quality products frequently appear.
**Third Sin: The Leader Does Nothing**
In some areas where leading enterprises hold absolute advantages, such as Coconut Palm, Red Bull, and Weiwei Soy Milk, they lack initiative and change, leading to frequent disruptors.
Let's look at consumer attitudes. A media interview with a young Hangzhou consumer who grew up drinking Wahaha explicitly stated, "Wahaha is really too rustic." "There's no particular reason; I just don't drink it anymore. It probably doesn't look very middle-class."
**Through these vivid cases, we can discern the market logic behind the changes in the beverage industry:**
**1. Trends Over Advantages**
In the new consumption environment, many traditional advantages can easily be defeated. The scary thing is that many traditional enterprises do not notice or ignore changes, which becomes an opportunity for new brands to rise rapidly and even disrupt categories.
**2. Consumer Decision-Making Mechanisms Have Changed**
The traditional mainstream consumption concept was "good quality and low price," but now the decision-making mechanism has shifted to value based on quality and health.
**3. In the Next 10 Years, 50% of Existing Brands Will Be Eroded or Replaced**
In the future, emerging and innovative enterprises will bring their own traffic and vitality, and their late-mover advantages will become increasingly evident. For existing brands, failing to keep pace with the times will inevitably lead to being eroded and disrupted by new forces.
**4. The Comprehensive Rise of Chinese Brands**
Currently, it is common for Chinese brands to benchmark against foreign brands, including Nongfu Spring and Baijia雀羚. With the growing national strength and confidence, the comprehensive rise of Chinese brands is unstoppable.
**5. A Large Number of New High-Quality Products Are Widely Welcomed**
Emerging excellent products and brands, including newer experiences, word-of-mouth, quality, and value propositions, will gain more consumer attention and thus seize more market opportunities.
## Five Characteristics of the New Consumption Era
**Characteristic 1: Diversification – Consumption Culture with Chinese Characteristics**
China is a country that exceptionally seeks novelty and difference, with prominent diversity in consumption. Product categories, specifications, flavors, and concepts emerge endlessly. In developed countries like the US and Japan, the product categories on beverage shelves are relatively simple, usually just plain water, tea, juice, coffee, cola, and other conventional types, and even juice varieties are only pure juice, far less diverse than what is seen in the Chinese market. Therefore, due to the survival of the fittest brought about by diversified demands, it has become the norm for different products to lead for a while. Only by closely following or leading the demand trends and continuously adjusting development can enterprises thrive.
**Characteristic 2: Personalization – No Personality, No Consumption**
Personalization is a universal business logic, but in the Chinese market, it is more extreme. Especially with the rapid rise of the new force in beverage consumption—the post-90s and post-00s generations—personalized labels such as "little fresh meat," "cute," "two-dimensional," and "funny" have gradually become mainstream. The corresponding consumption demands not only require practicality but also the desire to showcase personality and values. Currently, a beverage brand popular in Western countries, Monster, has been acquired by Coca-Cola and entered the Chinese market. Its wild brand tone and distinctive personalized packaging stand out on shelves, and many consumers buy it simply because it has personality and they like it, without needing more reasons. In the current beverage market, personalized symbols on brands and products are everywhere, already becoming the source for the beverage industry to cater to the new generation of consumers and to explore and innovate value.
**Characteristic 3: Quality – Safety, Health, Naturalness**
In the past, people focused on being well-fed and well-clothed; now they pursue quality demands of safety, health, and naturalness. This is the most significant feature of China's new consumption era. In developed countries, the implementation of quality demands has become a model for Chinese people to learn from. Look at the US: the famous Cleveland Clinic, citing the need to stay away from unhealthy "junk food," finally "kicked out" McDonald's from the hospital after waiting for a 10-year contract to expire. Look at Japan: drinking pure natural, additive-free beverages made from tea or fruits and vegetables has long become the most common lifestyle for its citizens.
**Characteristic 4: Experience – Consumption Scenarios, Artificial Intelligence**
From the crowded Apple stores to various tasting activities in Walmart supermarkets, the creation of experiential value touches every aspect of commercial promotion. How to let consumers more vividly experience the value and service of brands and products? External scenario creation, and even the application of artificial intelligence, has become the best direction for upgrading. The new tea drink brand Benwei Dahongpao not only sets up hot beverage cabinets at terminals but also dresses canned products in small clothes, all for consumers to experience the most authentic pure tea value. At the same time, future experience methods will also move to a higher level. For example, e-commerce giant Amazon has already set up fully intelligent unmanned supermarkets offline, and Alibaba's "Tao Coffee" and "Bingo Box" unmanned supermarkets are also being implemented.
**Characteristic 5: Attitude – With Attitude, There Is Resonance**
In the current competitive environment, setting aside product functional differences, brands and products with attitude will gain higher attention and resonance. The "Yunguan" brand oranges, initially unknown at launch, became inspirational oranges after incorporating the legendary story of "China's Tobacco King" Chu Shijian. The price of "Chu Orange" tripled, and it is often out of stock. Compared to similar products, "Chu Orange" sells not just oranges but also the spirit and values that resonate with people's hearts, which is the highest level of marketing. The beverage tea π, launched by Nongfu Spring and popular in the past two years, has no outstanding taste or function, but by incorporating the strong value of "self-styled" and introducing a popular Korean boy band as endorsers, it sells not just a drink but a cultural symbol that expresses consumers' attitudes.
## The "Four Possessions" Business Wisdom for the New Consumption Era
Whether manufacturers or distributors, they are important forces driving national development and economic prosperity, and they are key to promoting, leading, and changing consumption upgrades. They deserve sufficient respect and admiration. To help them maintain stronger vitality and achieve healthy and sustainable development, Mr. Lou Xiangpeng proposed the "Four Possessions" business wisdom for the new consumption era:
**1. Have Face (Image)**
In the market competition environment of the new consumption era, the market structure is shifting from unified brands to segmented exclusive brands. Consumers value not only the practical value of products but also intangible values such as face, identity, appearance, aesthetics, and even sexiness. Elements that divide people and bring their own traffic have become the core of market competition.
Comparing the product evolution history of Nongfu Spring and Wahaha, it is clear that Nongfu Spring, whether in category innovation, external image, or internal value, is a model brand of "face project" in China's beverage industry. As a result, it has been favored for major events like G20 and the Belt and Road Initiative, and has become the preferred drinking water brand for Chinese people.
Wahaha, the beverage leader, under its follow-and-imitate development philosophy, has launched many products whose image performance is also unsatisfactory.
Similarly, comparing the concepts and packaging of Coconut Palm and Special Forces, Coconut Palm's packaging appears rustic, outdated, and even "vulgar." Netizens even joke that its packaging designer must have saved the boss of Coconut Palm from an atomic bomb.
**2. Have Substance (Inner Quality)**
What does it mean to have substance? It means not only having an external image but also quality and connotation. It's like describing a person who is not only good-looking but also has depth. It could be healthier, tastier, more stylish, more fashionable, and more valuable—soft indicators.
With healthy beverage consumption gradually becoming mainstream, Coca-Cola, the world's number one beverage brand, has had to adjust its development strategy. Eight years ago, it attempted to acquire the pure juice brand Huiyuan for a huge 17.4 billion Hong Kong dollars. Although the acquisition failed, its philosophy remained unchanged, and it successively acquired juice brands like Minute Maid and the European brand Innocent. Its acquisition standard has always been "healthy and delicious." Shan Guo Yin Xiang from Baizhiyuan, as a new juice brand, with its value proposition of "I come from the mountains, naturally without added water," and its natural, ecological, and vivid brand illustration image, has established a new definition of healthy juice in the industry, making it a model of "substance" in the juice industry.
Wahaha, as the leader in food and beverages, compared to Nongfu Spring, has not done much in leading value and healthy original product innovation.
**3. Have Methods (Strategy)**
Good products with both face and substance may not necessarily have a market. To ultimately achieve commercialization and value exchange, good methods are needed, including value chain design, market development strategies, and promotion models. Wang Laoji (JDB)'s success is certainly inseparable from the precise positioning of "afraid of getting heaty" and strong advertising, but in fact, what truly ignited the market for Wang Laoji was its strategy of focusing superior forces on developing the catering channel. Starting from the sample market of Wenzhou, with fierce advertising and coordinated ground efforts, it was methodical and systematic. After success, it replicated this across the country. This is the key to Wang Laoji (JDB)'s subsequent success.
Can Evergrande Spring Water replicate Wang Laoji's success by spending more on advertising? Obviously, its market development was not methodical, and its advertising conveyed empty messages, making it a negative example for China's beverage industry.
A more notable example is Nongfu Spring's pure tea beverage, Oriental Leaf. Its face and substance are both outstanding, but why has its sales remained lukewarm in recent years? Clearly, when it was launched, it did not consider the acceptance of the vast majority of Chinese consumers. Instead, sweet drinks like Uni-President Ice Black Tea, Master Kong Green Tea, and Xiao Ming Tong Xue are thriving. This shows that marketing strategies can only be half a step ahead; being too fast can also cause problems. In action, of course, you need to move quickly, which is also a methodology. Nongfu Spring should have learned this deeply, and subsequently launched tea π, a tea beverage catering to mainstream consumers, with more fashionable and personalized brand attributes and experiences, achieving great success.
Traditional large categories are suitable for a high-coverage channel strategy like flood irrigation, while emerging exclusive products are more suitable for targeted precision distribution strategies. In this case, the channel advantages of traditional giants weaken and even become burdens. Only change can lead to a way out.
**4. Have Faith (Integrity)**
"Faith" means credibility and contractual spirit. "Zi" is an ancient honorific for people with morality and learning, such as Laozi and Mencius. It means having social conscience, adhering to morality and values. After 30 years of barbaric growth, this is the most valuable and scarce quality in China's current business environment. It is hoped that in future business cooperation, more consideration will be given to spiritual factors such as credibility and conscience. How to drive enterprise development with values, how to make good products through the "benefiting others" altruistic thinking and the business philosophy of "do not do to others what you do not want done to yourself," and how to establish mutually trusting and beneficial value communities and interest communities with society and stakeholders—these will be essential conditions for enterprises to achieve longevity and sustainable development, and they are also typical features of the future new business civilization.
Google's philosophy "Don't be evil," Nestlé's "Choose quality, choose Nestlé," Three Squirrels' "Believe in beauty" (simplicity, transparency, trust)—all successful enterprises and brands have their "faith" culture that they believe in and adhere to.
We firmly believe that China's beverage market is a microcosm. The transformation of the entire consumer market, the upgrading of industries, and even the sound development of China's economy fundamentally stem from the transformation and adherence to concepts and values.
Lou Xiangpeng, Chairman of Fula Brand Marketing Consulting, Head of the Brand Agriculture Research Group at Renmin University of China, Chief Advisor of Shennong Island. WeChat: louxiangpeng
-END-


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671