The future of Wahaha is still undecided. Recently, Zong Fuli, the heir apparent of Wahaha, has been trending on social media. In a recent interview, when asked about her views on Wang Leehom, who had been the spokesperson for Wahaha purified water for 20 years, she bluntly stated that she did not like Wang Leehom, nor did she like the packaging. In fact, after Zong Fuli took office as the head of Wahaha's Brand PR Department in 2018, she ended the cooperation with Wang Leehom. When asked the reason, Zong Fuli hesitated at first: "Can I say it? It would be too hurtful." Then she frankly said it was because Wang Leehom was too old. From a consumer perspective, she felt the audience would suffer from "aesthetic fatigue." She asked the host, "From young to middle-aged to old, do you think it's fun?"

Interview preview Source: At least one hour

In fact, it has been widely rumored that the reason the spokesperson remained unchanged for 20 years was due to the preference of the "little princess" Zong Fuli. However, Zong Fuli's candid remarks in the interview left the host looking somewhat embarrassed. It is worth noting that at Wahaha's 30th anniversary in 2017, Zong Qinghou personally presented Wang Leehom with a heavy crystal spokesperson trophy and the title of honorary employee. Zong Qinghou said he was traditional, and more importantly, Wang Leehom was diligent and hardworking, and the cooperation would continue. Daughter Zong Fuli's views seem to be completely different from Zong Qinghou's. As the baton is passed, will Wahaha's future be better? -01- Wahaha's Performance Declines, Transformation to Social E-commerce Self-Defeating? In 1987, Wahaha started with its first product, children's nutritional oral liquid, and then AD calcium milk and purified water became popular across the country. With its joint sales model, Wahaha became a "beverage empire," and the company was deeply stamped with Zong Qinghou's personal mark. Wahaha is the only large enterprise in the world without a deputy general manager; all decisions are made by Zong Qinghou alone. Previously, Zong Qinghou claimed, "We will never go public; Wahaha is not short of money." However, in November 2017, at the 30th anniversary celebration of Wahaha's founding, Zong Qinghou changed his tune: "Going public can accelerate the company's development, and at an appropriate time, Wahaha will consider listing." In May this year, his daughter Zong Fuli responded to the listing rumors, saying that Wahaha's listing is a very normal move. "If you are not a listed company, people will have doubts about your investment. Although we are a large brand enterprise, others will feel that a listed company is a company with clear and standardized processes, and they will be more assured in negotiations." "In the future, only by combining with the capital market can we go further. This is something every company must do. I also want to see what capital means can bring us." At the same time, a person from Wahaha's PR department told the media that Wahaha's operations are normal and there is no relevant guidance for listing; everything is subject to Zong Fuli's interview. As a beverage empire, Wahaha is undoubtedly successful. In 2010, Wahaha entered the 50 billion yuan sales club. At that time, Zong Qinghou made a bold statement to "create another Wahaha" and achieve annual sales revenue of 100 billion yuan within three years. However, as the drawbacks of Wahaha's "joint sales" model became apparent—such as the chain being too long and difficulty in introducing new products and eliminating old ones—sales began to decline year after year after reaching 78.3 billion yuan in 2013. Public data shows that from 2014 to 2017, the company's revenue was 72.8 billion, 67.7 billion, 52.9 billion, and 45.6 billion yuan respectively, shrinking by more than 30 billion yuan in five years. Of course, it wasn't just Wahaha; in the same year, giants like Master Kong and Uni-President also saw their performance decline. Wahaha certainly didn't put all its eggs in one basket. In 2003, it ventured into children's clothing; in 2010, it entered the milk powder market; in 2012, it dabbled in urban commercial complexes; and in 2013, it invested 15 billion yuan into the liquor industry... Unfortunately, none of these ventures have achieved anything noteworthy to date. Previously, Zong Qinghou also looked down on Jack Ma's concept of "New Retail." In a CCTV "Dialogue" program, Zong Qinghou said: "Apart from new technology, everything else is nonsense. (Jack Ma) is not engaged in the real economy; what can he manufacture?" However, in order to turn the situation around, Wahaha reluctantly entered e-commerce. In 2018, Wahaha gave a new packaging to "Tianyan Jingjing" (a beverage launched eight years ago, whose IP comes from the character in the 2015 animated film "Tianyan Legend"), and authorized Zhongnan Tianyan Technology as the exclusive distributor for the product in mainland China. The official claim is that this product can relieve visual fatigue, and Zong Qinghou endorsed it several times. Zong Qinghou said: "Wahaha started with the health product Wahaha Nutrition Liquid, solving the problem of children's eating. Now society is paying attention to health, especially eyes. From adults to children, incorrect eye use can easily cause visual fatigue. Tianyan Jingjing is launched for this consumer group." Moreover, the promotion of this new product did not use Wahaha's strongest traditional offline channels but instead relied on IP to do social retail—that is, social e-commerce (WeChat business). According to media reports, the normal threshold for Tianyan Jingjing to become a distributor is 186,000 yuan to reach the highest agency level, with a net profit of 83 yuan per box. For consumers, it must be sold at a price of 238 yuan per box of 24 bottles, with no discounts or promotions allowed. From the agency price list, only 1,980 yuan is needed to "start your own WeChat business."

Image source: Zhihu user @苏木

Currently, there is no sales data for this beverage, but negative comments are already widespread, with some netizens even suggesting that Wahaha is suspected of disguised pyramid selling. In addition, Wahaha's lactic acid bacteria children's drink "Youyoujun" also embraced e-commerce, choosing Pinduoduo for its debut. In the past year, Wahaha has also launched the slimming product "Wahaha Xianqian Jiaren" milkshake, the meal replacement yogurt "Youjian," and the grain beverage "Nutrition Five Grains." According to Wahaha's official WeChat customer service staff, Nutrition Five Grains is a key new product this year and is regarded as the "successor" to the billion-yuan Nutrition Express. In any case, Wahaha's performance in 2018 finally saw a slight rebound. Data shows that in 2018, Wahaha's revenue was 46.89 billion yuan, an increase of 430 million yuan compared to 2017. It is worth mentioning that in 2018, Wahaha established a technology innovation company, with business scope including new-generation information technology, sensing technology, new energy vehicles, and automotive intelligent technology. In early 2019, Wahaha also established an intelligent robot company, with Zong Qinghou as chairman. Clearly, Wahaha's transformation path is still ongoing. -02- Unable to Stand Alone, Wahaha's Successor Still Undecided? From "not listing" to "softening," this change in Wahaha is more seen as a sign of passing the baton to the next generation. Zong Fuli is Zong Qinghou's only daughter, growing up in a wealthy family environment. She went abroad to study at a young age and returned to China to get involved in Wahaha's business management. Unfortunately, her path to becoming a female entrepreneur has not been smooth. "Daughter of Zong Qinghou," "second-generation rich," "Princess of Wahaha"—since returning to China in 2004, Zong Fuli has always hoped to break free from her father's invisible hand, to break the "halo," and to do things completely different from her father. In 2007, Zong Qinghou spun off the food and beverage processing company Hangzhou Hongsheng Beverage Company for her to operate independently, gradually giving her independent power, including factory site selection, product line determination, and then negotiating with different development zones, acquiring land, building factories, placing orders, buying equipment, and installing and debugging. Today, Hongsheng Beverage Company has expanded its subsidiaries to 19 production bases nationwide, with a total of 49 branch companies. In July 2016, Zong Fuli launched a product she endorsed and named after herself: Kelly One fruit and vegetable juice drink. Whether in brand recognition or production model, Kelly One shows no trace of Wahaha in terms of brand, packaging, or marketing model. Although both make beverage products, Zong Fuli's style is completely different from her father Zong Qinghou's. However, due to high pricing, Kelly One's market performance has been dismal. The editor logged into Tmall flagship store and found that the store has only 70 followers, and a high-end NFC fruit and vegetable juice is priced at 38 yuan with zero monthly sales. In 2017, Zong Fuli attempted to acquire China Candy. Some believed this was preparation for Wahaha's listing, but Wahaha Group stated that Zong Fuli's acquisition of China Candy was her personal act and unrelated to the group company. Another view is that this was a sign of Zong Fuli wanting to establish her own business. However, after the news broke, China Candy's stock price soared, and ultimately the acquisition failed. At that time, Zong Fuli responded: "The company deeply regrets the outcome of this offer. Throughout the process, our company fulfilled the responsibilities and obligations of the offeror and carried out various acquisition matters with the utmost sincerity. The company will continue to uphold its own development strategy and continue to explore related fields with a positive and healthy business value orientation." Industry insiders analyzed that the shareholders of China Candy seemed to be the main beneficiaries, setting up a trap through a series of capital operations, then introducing Zong Fuli as a concept to hype up and cash out at high prices. After cashing out, retail investors who bought at high prices were not interested in the offer price, which was significantly discounted compared to the current price, leading to the failure of Zong Fuli's acquisition. In other words, Zong Fuli was used and ended up paying a huge tuition fee. People close to Zong Fuli admitted: "There is a first time for everything; we admit that this attempt at capital operation failed." In fact, Zong Fuli and her father Zong Qinghou manage the company in very different ways. Zong Qinghou has also publicly admitted that he and his daughter have differences in company management. In the father's eyes, his daughter, influenced by Western culture, is very independent in her work, but he also worries that she may not adapt to the Chinese corporate environment. He said that if employees don't perform well, Zong Fuli will fire them, which is contrary to Zong Qinghou's approach. There have even been incidents where employees fired by Zong Fuli were later brought back by Zong Qinghou. Zong Fuli, at a recent Zheshang Forum, said that her father is "very autocratic" at home and difficult to deal with. She finds it hard to balance the relationship between father and daughter, and between leader and subordinate. Regarding the position of Wahaha's successor, she said she is open to "fair competition." Chen Dongsheng, chairman of Taikang Group, who was present, tried to smooth things over, saying that one should respect elders and leaders, and it's okay to suffer a little now; after taking over, one can make great strides. Zong Qinghou is now 74 years old. In October this year, he said in a media interview that if Zong Fuli is willing to take over, he will hand her the baton. If Zong Fuli is unwilling, then he will cultivate professional managers to take over. He said that for the future leadership, Wahaha currently has several candidates in mind. It seems that the future of Wahaha is still undecided. Source: Xinmin Weekly (ID: xinminzhoukan) Once the tip is adopted, a payment of 400-2000 yuan will be made.