Click to read the original article for details Following the 'wild consumption' of Hongxing Erke due to its charitable actions, the 'national snack' brand Want Want has recently taken over the same storyline. On the afternoon of August 5, topics related to Want Want continued to ferment on social media, quickly topping the hot search list. As of now, the topic has been read over 1 billion times, sparking more than 367,000 discussions. At the same time, multiple live stream rooms under Want Want's accounts that started broadcasting on the 5th also saw a large influx of users, who frantically left comments and placed orders with enthusiasm. According to Chanmama data, the 'Want Want Food' live stream room accumulated 1.3 million views with sales exceeding 1.2 million yuan, while the 'Want Want Food Factory Store' live stream room accumulated 1.2 million views with sales exceeding 1.715 million yuan. Unlike the 'wild consumption' scenarios of Hongxing Erke and Baixiang, Want Want, as a 'national snack' brand, has never been far from consumers' sight. When Want Want's resurgence triggered netizens' 'archaeological' attention, it also brought to light the thirty-year rise and fall of the domestic snack industry. 0****1 1.0 Era: Brand Awakening In the 1960s, when materials were scarce, the concept of snacks did not exist; candies and biscuits were 'luxury items' that only appeared during the Chinese New Year. In the 1970s, as material life gradually enriched, roadside hand-cranked popcorn machines shaped like 'bombs' appeared, and subsidiary food stores began selling White Rabbit creamy candies that were originally for export but turned domestic, as well as canned fruits and malted milk that were often used as nutritional supplements, only consumed when visiting patients or giving gifts. Entering the 1980s, the rapid economic growth brought by reform and opening-up promoted the prosperity of national consumption. Small shops in schools and residential areas began to supply various breads, cakes, candies, and cold drinks. In the following decade or so, the domestic snack market officially entered a new historical stage of flourishing diversity. In the preserved fruit and candied fruit category, there were traditional snacks like hawthorn rolls and nine-flavored dried tangerine peel, as well as dried figs and Huahua Dan (commonly known as 'mouse droppings'). In the candy track, not only new categories like bubble gum and popping candy appeared, but also novel products like lipstick-shaped candy and ring-shaped candy, which were creatively designed to be 'edible and playable'. It is worth mentioning that the snack market during this period mainly competed on categories, and snack manufacturers had weak brand awareness, which led to many once-popular products quickly disappearing in category iterations, becoming 'tears of the era' in the memories of the post-80s and post-90s generations. With television entering ordinary households as an important medium, and a batch of Taiwanese-funded enterprises like Want Want, Uni-President, and Master Kong entering the mainland market, domestic snacks finally experienced a brand awakening. The advanced marketing of Taiwanese-funded enterprises was the trigger that awakened domestic manufacturers' brand awareness. Want Want Milk, launched in 1996, deeply imprinted the brand into the memories of two generations of consumers with its catchy TV ads like 'If you look again, I'll drink you up' and 'Li Ziming from Class 2, Grade 3'. Around the 1998 World Cup, Master Kong added player cards to its Xiaohu Dui crispy noodles, sparking a card-collecting craze among the post-85s and post-90s. Subsequently, Uni-President followed suit by inserting 'Water Margin character cards' into its Xiaohuanxiong instant noodles, creating a collective memory for a generation. When Taiwanese-funded enterprises entered the mainland snack market, local enterprises also produced some strong competitors. Hangzhou's Wahaha, after the great success of its children's nutritional liquid, launched Wahaha AD calcium milk to enter the snack market. Founded in Guangdong in 1992, Strong Group started with the jelly track and quickly opened the market with its hit product 'Crystal Love'. Quanzhou, Fujian's Daliyuan, sounded the horn for entering the national market with its egg yolk pies and Haochidian almond cookies. The short period from the late 1980s to before 2000 was the first golden age of China's snack market. The explosive development from categories to brands not only released the national demand for snacks. More importantly, the rapid development of the industry gave birth to a large number of food processing plants with complete production lines and excellent production capacity, which laid the industrial foundation for the later chain era of the snack market. 02 2.0 Era: Channel Transformation Looking back at the snack market before 2000, many people would sigh that it was an endless blue ocean. It seemed that as long as one could achieve product development that catered to popular tastes, sufficient advertising, and a nationwide distributor network, one could reap considerable sales in the market. However, consumers' ever-upgrading demands brought new changes to the snack market. While Taiwanese-funded enterprises and local manufacturers continuously expanded their revenue through product innovation and advertising, snack sales relied on two retail channels: hypermarkets and street-side shops, which did not fully tap into market demand. Many consumers only learned about new products from advertisements and then went to hypermarkets or small shops to buy them. **Noticing this problem, Taiwanese-funded enterprise Hsu Fu Chi took the lead in launching the 'counter model', placing all products under the brand on the same shelf or display in offline hypermarkets. In this model, when consumers purchased one product, they would also notice other products and potentially make related purchases. At this time, in response to the traditional Chinese New Year custom of bulk purchasing peanuts, melon seeds, and candies, snack manufacturers also cooperated with large supermarkets to introduce bulk weighing sales. On one hand, this allowed more products to be displayed at the sales terminal like brand counters; on the other hand, it met the category and taste preferences of different consumer groups through bulk sales, maximizing the stimulation of consumers' purchase demand. Because it satisfied consumers' purchasing needs in terms of category and price, bulk weighing sales have continued to this day. In fact, the 'counter model' and bulk weighing sales were only micro-innovations within the channel; brands still played the role of producers, and they never expected that after 2000, the snack market would enter a new era due to comprehensive channel transformation. In 2001, Lai Yifen, mainly dealing in roasted nuts, was born in Shanghai. Unlike biscuits and candies, roasted nuts, which emphasize fresh roasting, were often operated in self-owned stores. Lai Yifen continuously expanded its roasted nut categories while also adding bean products, dried fruits and vegetables, meat products, candies, jellies, and other snack categories. Thus, Lai Yifen's offline stores 'accidentally' developed into offline retail channels covering all snack categories. Compared with the retail channel model dominated by supermarkets, Lai Yifen's snack specialty model covering all categories catered to snack consumers' needs and was more focused in terms of consumption experience, gradually gaining consumer favor. Lai Yifen itself also gradually transitioned from its original self-production and self-sales model based on roasted nuts to a model of product OEM and specialty chain channels. Being able to sell snacks without producing them yourself, only needing to manage channels and brands, this asset-light business model undoubtedly posed a huge challenge to traditional snack enterprises like Want Want. The capital market also looked favorably on new players like Lai Yifen. In 2010, Lai Yifen took the lead in completing a shareholding system reform, attracting high attention from many PE and VC firms. At that time, it was rumored that many well-known investment companies fought fiercely for a share of Lai Yifen's investment, and Lai Yifen's selection of PE was like the auditions for Super Girl. In December of the same year, Liangpin Shop, which had developed using the same model, also received 51 million yuan from Today Capital in exchange for nearly 30% of its shares in the fourth year of its establishment. Slightly regrettably, Baicaowei, which also followed Lai Yifen's footsteps to expand its chain scale, encountered expansion bottlenecks after opening its 100th store in 2009, but later, Baicaowei turned a new page for the domestic snack market. 03 3.0 Era: New Retail Mixed with New Consumption After 2010 was the era when the internet reshaped traditional industries. The rise of online shopping platforms provided new channels for the retail industry. The scale of offline chain stores that 'Lai Yifen' and others were proud of suffered 'depreciation'. The birth of e-commerce shopping festivals like '618' and 'Double 11' contributed more promotional nodes for the snack market besides the Spring Festival. Seeing the growth efficiency brought by the internet to the industry, Baicaowei, which had encountered difficulties in store expansion, gradually shifted its business online in 2010, entering e-commerce platforms such as Taobao Mall and JD.com. In 2012, Baicaowei participated in 'Tmall Double 11' for the second time, with single-day sales exceeding 5 million yuan and annual turnover reaching 120 million yuan. Snack brands that benefited from the internet were not limited to Baicaowei. In 2012, Liangpin Shop, which had insight into the advantages of internet channels, planned to transform online, successively opening dozens of major online e-commerce channels such as Tmall and JD.com, and gradually achieved successful transformation. In 2016, Liangpin Shop's online business revenue reached 1.425 billion yuan, a year-on-year increase of 72.7%, and the proportion of online business revenue in total revenue increased from 26.53% in 2015 to 33.69% at the end of 2016. However, compared with the transformation effect on traditional real economy, the wealth-creation myth of the internet is more likely to attract attention. In 2011, Zhang Liaoyuan, who came from the food industry, founded the online nut sub-brand 'Keke Guo' under Zhan's Company, completing 10 million yuan in sales in 8 months. A year later, Zhang Liaoyuan started his own business, adopting a pure online business model, and Three Squirrels, focusing on high-end nuts, went online, successively receiving financing totaling over 21 million US dollars from IDG Capital and Today Capital. With the blessing of capital and traffic, the business model of pure online snack brands told an especially vivid business story. In 2012, Three Squirrels participated in the 'Double 11' promotion for the first time, with single-day sales reaching 7.66 million yuan, refreshing the highest single-day sales record in Tmall's food industry and ranking first in snack and specialty sales. In 2013, Three Squirrels' annual online sales exceeded 300 million yuan, and by 2016, sales had exceeded 500 million yuan. At this point, Three Squirrels, Liangpin Shop, and Baicaowei formed a tripartite balance, collectively known as the three giants of internet leisure snacks, bringing China's snack market into the internet era. However, not all traditional enterprises were as keen as Liangpin Shop. Traditional snack brands like Want Want, Master Kong, and Uni-President remained unmoved by the explosive growth of internet channels, still relying on traditional offline channels, missing the window period for developing online business, and thus collectively hit their market value peak in 2014 before falling into growth stagnation. Among them, Want Want's revenue hovered around 20 billion yuan from fiscal 2015 to 2019, with low growth for four consecutive years. The iteration of the snack market would not end in the internet era. After Ma Yun proposed the concept of new retail in 2016, snack brands that had actively transformed online began to rethink their channel layout strategies. Especially under the influence of new business forms such as local life services, live-stream e-commerce, and social e-commerce, online traffic began to flow out of traditional e-commerce platforms. Brand flagship stores that originally served as sales entrances on major e-commerce platforms not only saw revenue decline with the drop in traffic but also faced increased costs due to rising basic traffic prices. Thus, brands have successively embarked on a new path of balanced development across online and offline channels. Unfortunately, the emergence of the 'black swan' of the pandemic increased the difficulty for brands to lay out omni-channel strategies. Three Squirrels, which started purely online, had opened 941 alliance stores and 163 feeding stores by the first half of 2021, but the ratio of its online platform revenue to offline channel revenue was still as high as 7:3. Baicaowei, which had fully transformed from offline chains to online, only opened more than 20 offline stores by the first half of 2021. There were also more traditional brands wavering between online and offline channels. But is the next round of opportunities in the snack industry necessarily the omni-channel transformation brought about by new retail? In recent years, the demand for 'zero sugar, zero fat, low calorie' from Generation Z has raised new requirements for the FMCG sector. Products like protein bars, oat milk, and functional gummies have entered consumers'视野 with the east wind of new consumption, writing moving stories in the capital market. However, as venture capital receded and 'new consumption' collectively cooled down, many new consumer brands' stories were left unfinished, while traditional snack brands seized new opportunities again. Jingzhe Research Institute learned that Want Want has covered the fastest-growing categories under the new consumption trend in recent years, such as coffee, energy drinks, and instant rice and noodles, successively launching young and innovative beverage brand 'Bangde', health and nutrition brand 'Fix x Body', and spicy snack brand 'Mr. Hot'. It has also begun to attempt omni-channel layout, testing sales models from traditional e-commerce, live-stream e-commerce to vending machines, OEM, and Want Want's own stores. With the combination of rapid new product launches and omni-channel layout, Want Want's operating conditions have also seen a turnaround. According to the latest financial report, Want Want's performance in 2021 increased by 9.0% year-on-year to 23.985 billion yuan, setting a new high since its listing. At the same time, in fiscal 2021, Want Want achieved growth in all channels and three major categories in mainland China, with nearly 40% of revenue from new products in emerging channels. Looking back at the thirty-year changes in the snack industry, it can be found that products, brands, and channels are the three most important factors for corporate growth. The middle-aged Want Want taking over 'wild consumption', although it is an accidental phenomenon like Hongxing Erke and Baixiang, Want Want has never truly left the mainstream market. Instead, thanks to its past accumulation in product awareness and brand reputation, and its current online channel layout, it smoothly承接 the huge traffic brought by the unexpected resurgence and converted it into sales. The business world is like a battlefield, where the plot of 'the old king dies, the new king ascends' often occurs, but a brand's resurgence is never just because it was once popular. As 'wild consumption' continues to unfold, the reasons behind it deserve more attention. Source: Jingzhe Research Institute (ID: jingzheyanjiusuo) -END-