Wahaha's sales growth slowed significantly in 2016, but the company's assets remain in good condition. Zong Qinghou stated, "I believe that as long as we face the problems squarely and strive to improve, we will be able to reverse the decline." He attributed the sales decline to the following 10 major reasons: 1 Negative impact of online rumors Since two years ago, rumors denigrating the quality of Wahaha's products such as Woway and Nutri-Express have circulated online, spreading 170 million times, which has had a significant negative impact on their sales. 2 Declining sales force Wahaha's products were originally priced low, but as costs have risen, profit margins have narrowed, reducing distributors' enthusiasm for sales. In the future, Wahaha will launch more high value-added products. 3 Rapidly changing media environment Although Wahaha was one of the earliest companies to advertise, the current media landscape is diverse, with traditional media declining and new media rising. Wahaha has not fully adapted to these changes. 4 Significant shift in consumer attitudes The main consumer group is changing. For the post-90s and post-00s generations, packaging is the primary consideration, followed by whether the brand concept resonates, and then whether the taste and flavor suit their preferences. 5 Insufficient and uneven market development Many of Wahaha's products are regional bestsellers. Due to insufficient market development, many products with great potential have not been successfully promoted. 6 Too many product varieties, lacking blockbuster products For distributors, having too many products makes shipping difficult and sales lack momentum. Moreover, they spend a lot of effort but sales are not ideal, so no one in the sales chain makes money, leading to less enthusiasm and making it harder to cultivate blockbuster products. 7 Population migration from rural to urban areas Wahaha's main market was originally towns and rural areas. As the rural population decreases, consumption naturally declines. Although Wahaha has proposed a plan to enter cities, it has not been well implemented, and the sales focus has not shifted to urban areas. 8 Poor leadership in sales The former head of Wahaha's sales made poor decisions, arbitrarily opening accounts and turning large customers into small ones. Because profit margins narrowed, distributors were not active in sales, and terminal orders decreased. 9 Deteriorating manufacturer-distributor relations and poor sales team management In some markets, relations between Wahaha and its distributors are not harmonious. There are cases of sales personnel deceiving distributors, or distributors deceiving sales personnel. Additionally, some sales personnel lack discipline and are not proactive in their work. 10 Lack of planning in new product development and inaccurate product positioning Many of Wahaha's new products are not developed based on consumer needs but are merely imitations of best-selling products in the market. While Uni-President has waged a brand upgrade war and achieved remarkable results, Wahaha has frequently been in the spotlight for negative news. Perhaps in the minds of consumers, brands like Tang Daren, Assam, and Hai Zhi Yan represent a new world, while Wahaha's brand image remains stuck in memories from the past decade or even longer. The difference between the new world and the old world is first reflected in the channel: the impact of e-commerce on traditional channels, although not as obvious in the FMCG industry where consumption is often impulsive, distributors and manufacturers have been complaining about difficult business in recent years. Meanwhile, in terms of payment, mobile payment methods like Alipay and WeChat have significantly changed consumer payment habits within just a few years. Looking at media communication, influencing consumers through traditional media such as TV, newspapers, and magazines is a thing of the past. Fragmented information dissemination through WeChat, Weibo, live streaming, self-media, and video is becoming mainstream, and open and interesting approaches are more likely to win over the new generation of consumers. In this era where channels, payment, and media have undergone tremendous changes, the FMCG industry has been forced into a "new world." While everyone discusses whether to compete for existing markets or incremental markets, this question has become less important. Because the era where "terminals and channels reign supreme" is rapidly collapsing with the arrival of the new world. In the future, all production, marketing, and communication will become "consumer-oriented." Any production and sales that are not consumer-oriented will be futile. Consumers, as one end of the scale, directly care about whether they can conveniently buy what they like, and whether it can delight them beyond fulfilling basic physical functions. Perhaps this is where the deeply ingrained concepts of "old enterprises" like Wahaha are hard to change. As the largest beverage manufacturer in China to date, Wahaha faces the dual pressure of increasingly severe market changes and declining revenue. Adjusting and upgrading its product structure is urgent. Having long been accustomed to promoting mid-to-low-end products with a focus on second-, third-, and fourth-tier cities, when the mobile internet era arrives, consumer preferences and trends have transcended geographical and time constraints to become nationally integrated. Only through product and brand upgrades can sufficient cost support and profit growth be achieved. Revenue is not necessarily better when higher; the fundamental is improving gross margin. Product lines are not necessarily better when longer; the key is to strengthen sub-categories. Channel stocking is not necessarily better when higher; the key is sell-through and smart distribution. In the "new world" of FMCG, whoever is closer to consumers and has higher channel efficiency will be the new king. It is worth noting that Uni-President recently introduced a zero-inventory strategy, proposing to focus on brands rather than manufacturing in the future. Also, on November 18, Coca-Cola sold its bottling plants, warehouses, and logistics facilities in mainland China, shifting its focus back to brand operations. In a "new world" full of changes and challenges every day, what is Wahaha thinking? -END- The best learning platform for FMCG distributors in China Focuses on providing professional, practical, and actionable tutorials for enterprises and distributors Committed to helping Chinese FMCG distributors grow rapidly The most professional and practical knowledge base in the FMCG industry Reply with the red number below to get the corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent article selection | 002 Distributor market operations | 003 Terminal visit management | 004 Sales supervisor skills | 005 Sales improvement techniques | 006 Channel expansion | 007 Managing distributors | 008 Distributor development | 009 Distributor internal operations management | 010 Team management | 011 Efficient distribution techniques | 012 Sales manager's skills | 013 KA operation methods and strategies | 014 First lesson for new salespeople | 015 Internet, brand | 016 Distributor B2B transformation | [Long press QR code to follow]