---
title: "Stop Fooling Yourself: Most Traditional Companies Are Engaged in Fake Transformation"
description: "Large enterprises naturally attract attention, and their every move resonates with industry practitioners. However, experts often cite examples like Wahaha, Want Want, Master Kong, Nongfu Spring, Yili, and Mengniu, which offer little guidance for the majority of small and medium-sized enterprises (SMEs) struggling to survive. Business development depends on opportunities and accumulated strengths; Wahaha, despite a nearly 40% decline in recent years, still generates over 50 billion yuan in sales, instantly surpassing many SMEs. Transformation paths modeled on large enterprises are bound to be ill-suited, or they may end up going in circles without progress."
author: "余五洲"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2017-07-30"
language: "en"
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# Stop Fooling Yourself: Most Traditional Companies Are Engaged in Fake Transformation

> Large enterprises naturally attract attention, and their every move resonates with industry practitioners. However, experts often cite examples like Wahaha, Want Want, Master Kong, Nongfu Spring, Yili, and Mengniu, which offer little guidance for the majority of small and medium-sized enterprises (SMEs) struggling to survive. Business development depends on opportunities and accumulated strengths; Wahaha, despite a nearly 40% decline in recent years, still generates over 50 billion yuan in sales, instantly surpassing many SMEs. Transformation paths modeled on large enterprises are bound to be ill-suited, or they may end up going in circles without progress.

Large enterprises naturally attract attention, and their every move resonates with industry practitioners.
Many experts always cite Wahaha, Want Want, Master Kong, Nongfu Spring, Yili, and Mengniu, but this offers little reference for the majority of small and medium-sized enterprises (SMEs) struggling on the brink of death.
Business development also depends on opportunities and accumulated strengths; Wahaha, despite a nearly 40% decline in recent years, still has over 50 billion yuan in sales, which alone instantly outshines numerous SMEs.
Transformation paths modeled on large enterprises are bound to be ill-suited, or they may end up going in circles without progress.
All such transformations can be called fake transformations. In addition, there are three fake transformation symptoms specific to SMEs.
**1. Fake Transformation #1: Claiming to Focus, but Actually Diversifying After Focusing**
In the traditional sense, focused operation means investing deployable resources into markets that can maximize sales.
Especially when facing growth difficulties and economic downturn, the first thought for transformation is to concentrate superior forces to attack a specific regional market.
Traditional focused transformation mostly involves coordinating advertising in a model market, making breakthroughs across KA, circulation, special channels, etc.
These channels casually count to hundreds or thousands of stores, each with different attributes and serving different consumer groups, which means the product still faces a vast array of isolated consumer groups.
**True market focus requires allowing your product to penetrate a certain channel to reach a critical point.**
When ordinary consumers in that channel are talking about, exchanging, or using the product, the critical point for the product in that market arrives, and subsequent sales will see explosive growth.
Traditional market-focused transformation merely moves from 10,000 markets to 2,000 markets.
The original intention of creating a model market is to occupy every channel and group in that market.
Unfortunately, consumers in the model market do not resonate with each other or share and exchange opinions, so strictly speaking, this cannot be called a successful market-focused transformation strategy.
**2. Fake Transformation #2: Claiming to Value Consumer Needs, but Actually Channel-Oriented**
Consumer feedback and reviews are highly valued by all internet companies.
There is a saying in e-commerce: All business in the world is about brushing.
What do you brush? Traffic and reviews.
Offline, hiring people to queue; online, hiring people to place fake orders are methods to attract consumer purchases, successfully influencing and promoting other consumers' purchase needs.
Traditional enterprises are required during transformation to not be channel-oriented but to satisfy and value consumer needs, and to interact with consumers as the key to transformation.
However, when various operational modules such as raw material procurement, turnover, inventory, channel contribution, and distributor cooperation need to be adjusted accordingly, the transformation that values consumers often becomes just a slogan.
As can be seen from the comparison chart, cooperating with channel partners is not only frequent, close, and convenient but also brings direct economic benefits, while valuing consumers is inherently difficult, thankless, and takes a long time to benefit.
Why is plagiarism and counterfeiting particularly serious in the FMCG industry? On one hand, companies seek convenience; on the other hand, channel partners also need to meet their demand to make money by leveraging trends.
Traditional enterprises, constrained by short-term channel stimuli, cannot match internet companies no matter how loudly they claim to value consumers, thus becoming fake transformations.
**3. Fake Transformation #3: Saying They Want to Transform, but Their Bodies Are Honest**
Generally, traditional enterprises are accompanied by heavy assets, and the cost of trial and error is extremely high, which makes most enterprises accustomed to slow and steady transformation methods.
In Chinese private enterprises, the boss's decision-making power is extremely important, and employees and subordinates are mostly unwilling to bear the responsibility of trial and error.
Choosing A or B is not based on detailed data analysis or multiple arguments; most of the time, it is forced by time and hastily decided.
Transformation and future uncertainty—no one can guarantee to always lead the trend and grasp future development directions, after all, there is only one Jack Ma in this world.
Therefore, traditional enterprises, constrained by their own key limiting factors, can only move forward in a slow + patching-up manner.
Moreover, people are afraid of change. In this situation, it is not that enterprises do not want to transform quickly; it is that they cannot move, cannot move fast, and dare not move.
They say they want to transform, but their bodies are honest—they do not want to move, cannot move fast, and dare not move.
In such a changing society, facing BAT companies that might accidentally create unmanned supermarkets or artificial intelligence, how can traditional enterprises use limited resources to transform effectively?
**1. Increase Market Penetration Rather Than Breadth**
When the penetration rate of a market reaches a certain critical point, the number of people purchasing the product will see explosive growth.
Because consumers will feel that people around them are talking about and recommending the product.
Market focus is fine, and the strategy of creating a model market and becoming the local leader in that market is also fine.
But it does not mean that after focusing on a market, opening up all channels within that market represents success. **The popularity of any market must involve a process of consumers spreading, sharing, and communicating with each other.**
**Even if the product is distributed to all independent outlets in all channels within the focused market (which cannot penetrate each other), it is better to fully penetrate the one channel that is most likely to trigger word-of-mouth.**
Let consumers communicate, share, and exchange ideas, creating a habit of following the crowd and pursuing fashion.
When JDB was still called Wanglaoji and not yet famous, the Wenzhou market sold even better than its home base Guangzhou market.
On one hand, it was the normal sales from the restaurant channel in Wenzhou, but it also faced strong competition from rivals.
After discovering that locals in Wenzhou liked to host banquets and feasts beyond normal dining, they conducted high-density penetration of banquet occasions through free samples, tastings, and terminal promotions.
In Wenzhou, there was even a saying: "For Wenzhou weddings, the three reds (Zhonghua cigarettes, Wuliangye liquor, and Wanglaoji) are essential."
By penetrating banquets, it is easier to create opportunities for consumers to communicate, share, and compare, accelerating the increase in penetration rate, thereby reaching the critical point and driving explosive sales growth.
Eventually, consumers themselves did not even know why they used Wanglaoji; they just saw other banquets using it and followed suit.
Focusing is not wrong, but after focusing, the market should seek channels or consumption methods that are more likely to encourage consumer interaction, communication, or comparison.
Rather than broadly spreading across the focused market, which still faces isolated markets and is no less difficult than the national market.
**2. Shape Product Consumption Scenarios Rather Than Follow Trends**
Another transformation direction for traditional enterprises is to produce trendy products to ride on hot topics and boost sales and revenue.
Many FMCG companies flock to hot topics, creating popular products like pork floss cakes and steamed cakes, but why do they quickly fade away?
Phenomenal snack foods like pork floss cakes and steamed cakes achieved good results in penetration but did not establish any connection with consumption scenarios, nor were they chosen because consumers genuinely loved them.
**The essence of marketing should be to create consumer demand: when will consumers think of you, and under what circumstances will they think of you?**
Wanglaoji is thought of when preventing heatiness; even the widely criticized Naobaijin left a subtle impression that when you do not know what to give your parents, give Naobaijin.
There is a company in Sichuan called Lanjian Beverage Group, which may not be familiar to industry insiders, but its product Weiyi Soy Milk holds nearly 95% market share in the restaurant channel.
Sichuan and Chongqing are famous for spicy food, Sichuan cuisine, and numerous hotpot restaurants. Everyone who visits Sichuan will try them, and once they enter these restaurants, locals recommend and outsiders are willing to try Weiyi Soy Milk.
The brilliance of Weiyi Soy Milk is that it has both penetration (everyone drinks it) and establishes the restaurant consumption scenario, which further increases penetration through this scenario.
Weiyi successfully connected with the consumption scenario, making consumers generate the motivation and demand to consume as soon as they enter the restaurant scenario.
This method of perfectly combining penetration and consumption scenarios is worth our consideration and reference, as Weiyi's sales in Sichuan alone exceed the national sales of many food and beverage companies.
However, consumption scenarios for snack foods are indeed difficult to capture, which is why Liuliumei's advertising slogan directly says, "Eat Liuliumei when you have nothing to do."
**3. Necessity Is the Foundation of Transformation**
Li Jiaoshou once wrote an article stating that one of the manifestations of higher animals is the use of tools. In the story of the crow drinking water learned in childhood, the crow achieved its goal by dropping stones, but the crow did not evolve into a higher animal.
The main reason is that water sources are abundant in nature, and the crow does not need to expend much effort to use tools, thus losing the opportunity for evolution over time.
From the history of biological evolution, the current enterprise transformation has similar implications. Every organism that survives to this day has undergone countless transformations and adaptations.
Dinosaurs, the former rulers of the Earth, became extinct due to climate change and crustal movements, but who would have thought that the creatures that appeared at the same time and survive today are the universally detested cockroaches.
Cockroaches have eaten anything over tens of millions of years of evolution, can survive in the harshest environments, and are the first creatures to appear after nuclear radiation. Even with their heads cut off, they can live for 9 days, reportedly eventually dying of hunger.
An important reason why cockroaches and other organisms, including humans, have evolved to this day is the necessity of survival and development.
Why do many traditional enterprises say they want to transform but their bodies are honest?
It is because the current environment is not yet harsh enough to make many enterprises close overnight (insufficient necessity).
Regarding new product development, they follow whatever is popular in the market, make a profit before profits become transparent, and through imitation and counterfeiting, they can live comfortably during the windfall period (insufficient necessity).
Traditional enterprises have too many internal transformations and changes to make, too much resistance, and the desire is there but the ability is insufficient, which is also one of the reasons for difficult transformation (insufficient necessity).
**If you truly want to transform, you should create necessity.**
Take the initiative to compete rather than avoid the strong and attack the weak; create innovation rather than imitate; resolutely integrate rather than be soft-hearted.
Every transformation carries risks. If you feel the risks are unbearable, then do not engage in self-deceptive fake transformation.
**Conclusion:**
Even in the most saturated categories, there are always some local leaders that can carve out a path, leaving big brands helpless.
Because they have high penetration in focused markets and have established corresponding consumption scenarios, making consumers willing to share and recommend, which greatly compensates for the lack of marketing budget in an era of outrageously expensive advertising traffic.
Any enterprise willing to transform depends not only on external pressure but also on whether internal motivation is sufficient and whether there is enough necessity.
Cars have their roads, horses have their paths. When traditional enterprises lack methods and motivation, they should stop fake transformation and think carefully before hitting the road.
**Source: Sales and Market (ID: cnmarket)**
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