Click to read the original article for details Source: Mantis Finance (ID: TanglangFin) Celebrity livestreaming is an art. A few days ago, Andy Lau's 40th anniversary livestream attracted 100 million viewers. He didn't sell any products, and there wasn't even a button to send gifts. The over 100 million concurrent viewers could only spam likes. It seems that celebrities "belonging to the last century" have suddenly sparked crazy popularity through livestreaming. There's also Wang Leehom, who had been "out of fashion" for a long time, but after achieving his goal of selling courses in a livestream and "shaving his beard," he directly hit the trending list on Douyin. Under the gimmick of "shaving his beard after 3000 sales," Wang Leehom's livestream peaked at 600,000 viewers. After the livestream ended, the Weibo topic #WhatHappenedToWangLeehom# also hit the hot search, accumulating 180 million reads and 47,000 discussions. The last time Wang Leehom sparked such widespread attention was after Wahaha terminated its partnership with him. Zong Fuli, when discussing this topic, said it was because Wang Leehom was getting older, and from the consumer's perspective, there would be "aesthetic fatigue." Zong Fuli is right. In today's highly developed idol industry, batches of traffic stars are "manufactured," and their rise to fame and fall from grace happen at any time. Especially for idols like Wang Leehom, who once belonged to the post-80s and post-90s generations, even if they were part of a generation's youth, it's normal for many Gen Z young people to think he's "old" and "out of fashion." But along with Wang Leehom, Wahaha itself has also become "out of fashion" in the hearts of Gen Z. Inheritance Amidst Division As Wahaha's successor, Zong Fuli's every word and action is under the spotlight. Especially as Zong Qinghou ages, like all family businesses, Wahaha faces the urgent issue of succession. But even Zong Fuli, who was groomed as Wahaha's "successor," only became the head of the public relations department in 2018 after working at Wahaha for over a decade. Thus, external doubts about Zong Fuli's abilities have persisted. Moreover, Wahaha, which has always grown with its own funds, is extremely dependent on Zong Qinghou. Years ago, on a CCTV program where Zong Qinghou and Zong Fuli appeared together, when the host asked Zong Fuli, "What is Wahaha minus Zong Qinghou?" Zong Fuli replied, "Zero." Years later, on the program "At Least One Hour," when Zong Fuli was again asked about Zong Qinghou's role in Wahaha, she still answered, "He is like a god." This has led to many of Zong Fuli's innovative initiatives being easily misunderstood as incompetence if they don't achieve revolutionary results. But in reality, looking at some of Zong Fuli's major moves, she has been striving to embrace Gen Z and inject youthful blood into Wahaha. First, focusing on the new generation of core consumers in first- and second-tier cities, she launched KellyOne, a new brand completely independent of Wahaha. The benefits of a multi-brand strategy are self-evident: it allows targeted entry based on the needs of consumers in different market segments, increasing market share in those segments, while also stimulating internal vitality and sharing resources. Especially for Wahaha, which is perceived as an "aging" brand, KellyOne's "starting from scratch" can, to a certain extent, break free from consumers' "aging" perception of Wahaha, forming a dual-brand operation where the two brands complement each other. Moreover, even if KellyOne doesn't achieve significant results, it can be decisively abandoned, like the Edison奶粉 (Edison milk powder) launched by Wahaha, without causing much damage to the main Wahaha brand. Second, from KellyOne's product line, the trend of "catering to young people's preferences" is very obvious. Currently, KellyOne has launched four series: fruit and vegetable juice, a tea, Soda Pop, and CHACHA, all of which align with the current low-sugar, low-fat health trend favored by young people. At the same time, from Wahaha replacing Wang Leehom with Hsu Kuang-han to KellyOne's Soda Pop betting on Wang Yibo, they are all leveraging the "product-selling ability" of traffic stars under the fan economy, reopening market awareness through the fan economy. The effect was immediate: according to data from KellyOne, before the brand announced Wang Yibo as spokesperson, the monthly sales of a single Soda Pop link were only 1,000+, but within a week after the announcement, Soda Pop sales directly exceeded 60,000 units. Finally, under a series of cross-border marketing initiatives led by Zong Fuli, Wahaha, which had been experiencing declining performance, saw some improvement. After hitting a record high revenue of 78.28 billion yuan in 2013, Wahaha's performance began to weaken: 67.7 billion yuan in 2015, 52.91 billion yuan in 2016, and 46.45 billion yuan in 2017. Since Zong Fuli took office as head of Wahaha's public relations department in 2018, she has made many explorations in cross-border co-branding marketing. She successively launched fun series products such as AD Calcium Milk mooncakes, AD Calcium Milk-flavored "Wahaha Hahaha Zongzi," and Nutrition Express cosmetics. At the same time, she also co-branded with brands and IPs popular among young people, such as Zhong Xuegao, Pop Mart, and the League of Legends Pro League, attempting to communicate effectively with young consumers. It was also in 2018 that Wahaha stopped its declining trend with revenue of 46.89 billion yuan. Even Zong Qinghou had to admit, "She does well in marketing and manages finances tightly, so her company's (Hongsheng Group) profit margin is higher than mine (Wahaha)." It was also after this, in 2020 (note: the original text says 2002, but context suggests 2020), that Zong Fuli began to concurrently serve as deputy general manager of the sales company. From only being responsible for production before, she now participates in brand and sales management, moving closer to the core of Wahaha. The Key to the Giant's Turn Even with Zong Fuli's bold reforms, Wahaha still faces challenges in brand innovation. In 2019, Wahaha's revenue declined again to 46.4 billion yuan, a drop of more than 40% from the peak of 78.28 billion yuan in 2013. Two key factors are hindering Wahaha's giant turn: the lack of new products to replace old ones and the generational shift of consumers. First, when the market shifted from a seller's market dominated by channels to a buyer's market dominated by products, Wahaha's follow-up innovation approach made it difficult to quickly launch new products that could seize the consumer market. And once there are no new products that quickly capture the minds of young consumers, Wahaha is prone to losing momentum due to "aging products and weak new products," fading from the view of young people. Whether it's the big single product AD Calcium Milk, or Nutrition Express, iced tea, milk tea, kvass, or other functional drinks, before Wahaha launched these products, similar products already existed in the market. In the era of channel dominance, Wahaha borrowed drinks that had already gained a reputation in the market, quickly replicated them, and with its powerful joint sales system and marketing campaigns, quickly captured its own market share. But when the rise of e-commerce flattened the once channel-based business model, the competitiveness of the product itself began to stand out. At this point, Wahaha suddenly realized it lacked new products that could cause a strong market reaction. Public data shows that Wahaha has launched more than 300 new products, even venturing into the coffee sector, but most have been short-lived. Now, as the sugar-free trend sweeps the food and beverage industry, major players are raising the banner of health and launching new products to enter new battlefields. Under Zong Fuli's push, Wahaha launched "Xiaoqingxun Soda Water," and KellyOne not only launched the "Soda Pop" series but also bet on Wang Yibo as the spokesperson for the entire series. But in the sugar-free sparkling water market, there are already pioneers like Genki Forest, and giants like Nongfu Spring and Pepsi have entered, and even Mengniu is crossing over to make money. In this fiercely competitive blue ocean market, the fate of Wahaha's new products remains uncertain. Judging from current sales on Tmall flagship store, under Wang Yibo's influence, KellyOne's Soda Pop is more popular than Wahaha's previous new products, with several top-selling links showing thousands to tens of thousands in sales, but compared to Genki Forest's popular links, there is still a big gap overall. Fortunately, under Wang Yibo's influence, KellyOne's Soda Pop has become more popular than Wahaha's previous new products, especially during this year's 618 shopping festival, when KellyOne, with its new product Soda Pop, ranked second in Tmall's 618 sparkling water transaction ranking, second only to Genki Forest. Second, as the core consumer groups supporting Wahaha's hit products like AD Calcium Milk and Nutrition Express age, and no new products are available to attract new consumers, this directly creates a gap between the brand and the consumers who have undergone a generational shift. As a result, Wahaha faces the awkward situation where its share of the existing market gradually decreases, while its share of new market growth does not increase. A netizen once said that Wahaha's biggest failure is that the times no longer need it. This essentially means that Wahaha is just a childhood memory for the post-80s and post-90s generations, and for new consumer groups, Wahaha has no products to reach them. Even for the star product Nutrition Express, which has the widest age coverage, according to Euromonitor data, sales declined year by year from 2014 to 2016, at 15.36 billion yuan, 11.54 billion yuan, and 8.42 billion yuan respectively, nearly halving in three years. During this period when Wahaha's existing market share was gradually shrinking, there was a huge market dividend from consumption upgrades. Whether it was Uni-President's Hai Zhi Yan or Xiao Ming Tong Xue, or Nongfu Spring's Tea π or Oriental Leaf, they all began to leverage this dividend to expand into broader markets. Especially the new consumer brand Genki Forest, which became popular across the internet with its sugar-free sparkling water. When competitors began to launch new products to quickly capture the new generation of consumers, Wahaha, accustomed to follow-up innovation, did not compete on the speed of product iteration. Thus, when it integrated market experience and launched new products, the market had already shifted from dividing the cake to grabbing the cake. But this doesn't mean classic products are worthless. Just as in the sugar-free trend, Coca-Cola's classic flavor is still most people's "yyds" (eternal god). For Wahaha, which owns two highly popular beverage IPs with national recognition, AD Calcium Milk and Nutrition Express, there is still an opportunity to enter the hearts of Gen Z by building these classic product IPs according to market trends. Good at Business, Not at Branding In the view of Mantis Finance, Wahaha's dilemma stems from the fact that over the past few decades, in the previous environment, Wahaha, like many brands that have become tears of the times, was focused on doing the beverage business well but neglected the importance of brand building. In fact, in the beverage business, even though Nongfu Spring has always been vocal in the market, its revenue is only half of Wahaha's. From 2017 to 2019, Wahaha's revenue was 45.6 billion yuan, 46.9 billion yuan, and 46.4 billion yuan, while Nongfu Spring's revenue was 17.49 billion yuan, 20.48 billion yuan, and 24.02 billion yuan. But as social and economic development has brought us into the current new consumption era, Wahaha's pace of development has slowed. Despite a series of youth-oriented actions, it still only follows market trends to "cast a wide net" for new products, without clarifying a clear brand positioning or targeting new consumers. Under the Zhihu question "Why are Wahaha's advertisements and product packaging so ugly?", a high-vote answer from Huayi Planning said: "As people's economic level rises, brand awareness begins to awaken. The basic function of a product is 100% important for low-level consumers. But as consumer levels rise, this importance sharply decreases." That is to say, in the era of material scarcity and channel dominance, consumers bought Wahaha for its basic function as a beverage. But in the current new consumption era with endless brands, when young people start paying for products with personality and brands with attitude, even if Wahaha realizes it needs to change, its pace is still a bit slow. The most typical example is when Wahaha opened milk tea shops based on its own products like AD Calcium Milk and yogurt drinks. After relying on childhood nostalgia to get a wave of emotional consumption, many netizens began to complain online: "We sincerely suggest Wahaha give up entering the milk tea industry. Spending 16 yuan on a cup of AD Calcium Milk is really not worth it." After all, when young people drink milk tea, they are consuming not just the basic function of the drink, but also the "intangible" added value of social topics, consumer culture, and circle belonging that brand power brings. The AD Calcium Milk-flavored milk tea being criticized is largely because Wahaha failed to make young people feel a sense of value beyond the AD Calcium Milk itself. This is why Wahaha has done well in business but not in branding. As Zhu Danpeng, a Chinese food industry analyst, said, "The new generation of consumer groups first look at the product, then consider the brand, and then consider price, channels, and service systems... In an era where the consumer end is constantly pushing the industry end to upgrade, whether a company's actions can match consumers' thinking and the behavior of new generation consumers, and solve their pain points, is a key point." When Zong Fuli launched KellyOne, which has no trace of Wahaha, she was aware of these issues. However, after a series of actions such as launching new products, changing spokespersons, and cross-border marketing, the key question is how to make young people remember. -END- PS: The 2021 (4th) China FMCG Conference, hosted by "New Distribution," is about to open in Shanghai. Focusing on industry trends + practical cases + growth through connections, 3,000 FMCG practitioners will gather. 10 themed forums cover new retail O2O, community group buying, short video livestream e-commerce, distributor transformation, rise of new consumer brands, new alcoholic beverage interpretation, distribution B2B supply chain, omni-channel marketing, B2B2C new technology applications, etc., with operators from various segments bringing the latest case studies. Some of the confirmed heavyweight guests so far include: 1. Tao Shiquan, founder of Jiangxiaobai; 2. Yao Xuhong, general manager of Meiyijia Holdings Co., Ltd.; 3. Lu Xiuqiong, global expert partner at Bain & Company and former vice president of marketing for Coca-Cola China; 4. Chen Xiaodong, senior vice president of Nestlé Greater China; 5. Zhang Fujun, president of Lee Kum Kee Sauce Group China; 6. Bi Chaojiao, general manager of China Resources Snow Breweries (China) Marketing Center; 7. Yang Hongbin, vice president of Junlebao Dairy Group; 8. Yang Shun, COO of Lipton Greater China; 9. Zhang Yipeng, general manager of Kuaishou E-commerce SKA Brand Operations Center; 10. Li De, e-commerce general manager of Gold Hong Ye Paper Group... A grand event for FMCG professionals, you must be there! Are you "watching" me?