Wangwang, Qinqin, Wahaha... Why Are Childhood Favorites Slipping into the Mire?

Back then, Qinqin was like a young and vigorous beast, full of youthful energy in everything it did. Just like the classic Qinqin jelly advertisement, "I want a kiss too!", everywhere was filled with enthusiasm and joy. But even the fiercest beast will one day grow old. Wangwang, Qinqin, Wahaha... Why are the childhood foods that the post-80s and post-90s generations missed day and night gradually drifting away?

Why are these once-popular childhood foods slipping step by step into the mire?

Qinqin shrimp crackers, Qinqin jelly, Wangwang snow cakes, Want Want milk, Wahaha AD calcium milk, Wahaha eight-treasure porridge—these are unique memories for most post-80s and post-90s generations. However, these precious childhood memories are now facing a serious crisis.

Not long ago, Qinqin Food announced that it expects to record a profit attributable to shareholders of approximately RMB 19 million for the first half of the year ending June, a decrease of about RMB 16 million compared to the same period last year, down 45.7% year-on-year. At the same time, the group expects revenue and gross profit for the first half to also decrease by 10% and 7% respectively compared to the same period last year.

Is Qinqin Food, once popular nationwide, going to slip step by step into the mire?

The Old Warrior Is Already Old

In 1991, when Qinqin Co., Ltd. was still called "Nanfang Food Co., Ltd.", their only product was "Qinqin shrimp crackers." At that time, Qinqin had no ambition to go public. In the words of Wu **, then president of Qinqin Group, "What we pursue is a sense of achievement and social value, which cannot be bought with money."

Thus, Qinqin Food established its brand image: "People-oriented, create value, based locally, look to the world." In March 2002, the "Qinqin" trademark was rated as a famous trademark in Fujian Province, and Qinqin products and the company were successively rated as "China's Famous and Quality Food" and "China's Outstanding Food Industry Enterprise" by the China Food Industry Association.

In 2005, Qinqin cooperated with Procter & Gamble to develop "Pringles" potato chips and officially put them into production in the Wuli Industrial Park in Jinjiang City. This project was expected to bring an annual output value of over RMB 200 million. During the same period, Qinqin also built the "Qinqin" jelly base in Jinjiang, which would generate an annual output value of over RMB 100 million after production.

At that time, Qinqin was like a young and vigorous beast, full of youthful energy in everything it did. Just like the classic Qinqin jelly advertisement, "I want a kiss too!", everywhere was filled with enthusiasm and joy.

But even the fiercest beast will one day grow old.

Since 1998, Qinqin began a series of preparations for listing. In 2002, Qinqin passed the tutoring period for listing, but it was not until 2008 that it failed to go public. In September 2008, Hengan Group acquired Qinqin and at the end of the year released the news of "planning the listing of Qinqin Food," saying it would "list it within 3-5 years." In the eyes of Hengan at that time, Qinqin was still a piece of steaming "fresh meat."

But Qinqin failed to satisfy this "big boss."

Qinqin began its era of declining revenue in 2013, dropping from RMB 1.28 billion in 2013 to RMB 1.02 billion in 2015. Due to problems in industrial integration, the acquisition of Qinqin seemed not to satisfy Hengan Group's ambitions, so Hengan decided to continue Qinqin's path to listing.

In July 2016, after struggling for eighteen years, Qinqin Food finally went public.

However, the listed Qinqin could not return to its past glory. On the day of listing, Qinqin's stock price fell from HK$9.19 to HK$3.14, and although it later rebounded somewhat, it still hovered between HK$2 and HK$3, with trading volume continuously declining. On August 5, Qinqin announced that it expected a year-on-year decrease of about 45.7% in profit attributable to shareholders for the first half, nearly halved!

The once-old food enterprise has thus become a shaky and crumbling building.

Suffering from the Same Disease

Wangwang Group, a former ace snack enterprise, announced a stock price drop of about 13.6% in July 2016. This was the third consecutive decline for Wangwang after an 8.3% drop in May this year. On March 15 this year, China Wangwang released its 2015 annual results, showing that Wangwang's revenue in 2015 was US$3.775 billion, a year-on-year decrease of 9.2%.

This was the first time Wangwang experienced two consecutive years of performance decline since entering the mainland in 1994. The once-prosperous Wangwang is no longer as "prosperous" as before.

Looking at Wangwang's main business segments, in 2014, Wangwang's "classic" product "Want Want Milk" saw its first decline in revenue, with a decrease of 0.8%. At the same time, Wangwang, which mainly focuses on dairy products, also suffered a cold winter in the currently sluggish beverage market. In 2014, Wangwang experienced its first overall performance decline.

Wangwang has been making new adjustments in response: not long ago, Wangwang announced that it would invest RMB 500 million to build a factory in Nanjing, cooperating with Japanese dairy company Morinaga Group to launch Want Want series yogurt and French-style creme caramel jelly, officially entering the low-temperature dairy market. Wangwang Group hopes to expand the share of low-temperature products to 5% of the group's total within the next two years.

In China, the low-temperature dairy market, as an emerging field, has great potential. According to industry data reports, China's low-temperature pasteurized fresh milk has maintained an increase of about 20% in recent years. Wangwang's entry into the low-temperature dairy market is also a desperate attempt by this old giant to rise again.

But can this attempt "turn the tide"?

Currently, the number of enterprises operating low-temperature fresh dairy products in China has exceeded 400, and the intensity of competition is imaginable. Whether this booming market that Wangwang is targeting will bring it good luck is currently not optimistic.

Besides Wangwang, Wahaha, another old food giant, is also one of them.

Since 2012, Wahaha has fallen into a serious profitability dilemma. In 2012, Wahaha's revenue declined by 6.22% year-on-year, and by 2014, it declined by 7%. Similar to Wangwang, Wahaha's "signature" products have also entered a severe sales winter.

As Wahaha's "leading lady," Nutrition Express, has been embroiled in serious quality issues since a few years ago. In 2014, an expert harshly criticized Nutrition Express, and its advertising slogan "No time for breakfast, drink Nutrition Express!" was also accused of "completely misleading consumers." Coupled with the continuous rise of Chinese beverage brands, Nutrition Express ultimately could not withstand the market reshuffle, and its market share gradually shrank.

At the same time, Wahaha's main business segment, drinking water, has seen its sales divided by increasingly influential brands such as Ganten and Hengda Ice Spring.

Wahaha, like Wangwang, is no longer "prosperous" and can no longer "haha." Zong Qinghou, the founder of Wahaha who once dreamed of "100 billion," had to admit that Wahaha's products are facing a "sluggish performance" situation.

These old brands, which once carried the childhood memories of the post-80s and post-90s generations, together with Qinqin, are all on an unclimbable cliff, slowly approaching the abyss.

Is it true that the old warrior is easily old, and heroes can only be "remembered"?

Can They Still Eat?

It is true that "the times make heroes," but heroes should also adapt to the changing times to avoid becoming objects of "remembrance."

And these old warriors have clearly not grasped this trend.

Take Qinqin as an example. First, due to capital and market pressure, Qinqin chose to "marry" Hengan, but this move failed to save Qinqin's decline. Due to unsuccessful business integration, in 2015, Hengan Group's snack business revenue fell by 17.4%, and profits also decreased by nearly 50%. Hengan Group's main business is in paper products, and diversifying its business areas inherently carries the dangers of poor management, reduced efficiency, and dispersed sales capabilities.

Wangwang and Wahaha also face this danger. The most obvious is Wahaha. Besides drinking water, from entering children's clothing in 2002 to producing liquor, health drinks, etc., Wahaha's desire to get a piece of every market has slowed its pace and will eventually make it an enterprise without brand characteristics.

At the same time, Qinqin has not placed product innovation at its core.

According to relevant data, the current jelly market capacity in China has reached RMB 20 billion, and Qinqin jelly accounts for 60% of the company's revenue. But surprisingly, its sales fell from RMB 806 million to RMB 613 million between 2013 and 2015.

Qinqin's product categories are too single. Although "Qinqin jelly" and "Qinqin shrimp crackers," once popular nationwide, still have a certain reputation among consumers, they have fallen into a weak sales cycle. Coupled with the increasing number of jelly and puffed food brands on the market, Qinqin can no longer receive corresponding attention.

This is also why Wangwang has been launching new products to remedy its declining performance. However, Qinqin, deeply mired in the mud, still seems unaware of this problem.

But not all old brands are "old warriors."

Similarly, "White Rabbit" milk candy, a childhood memory of the post-80s and post-90s generations, shocked Chinese netizens in 2012 with a giant, classic-style White Rabbit candy. While recalling the taste of childhood, netizens were curious about what kind of "existence" this candy, larger than a palm, was. This was the beginning of White Rabbit's efforts to protect its brand image and develop new marketing methods.

In March this year, White Rabbit collaborated with a French designer to change its packaging. The White Rabbit candy, dressed in new "clothes," saw its price soar to RMB 265 per jin! It has become a high-end candy. We cannot easily judge how much profit this will bring, but at least White Rabbit has been maintaining its brand image and striving to adapt to the new era.

Also doing this is the "national snack"—latiao (spicy strips). The most representative brand, Weilong, from a small enterprise to now being popular nationwide and becoming the most talked-about company, has a lot to do with its innovative marketing methods.

Why is a pack of unknown latiao so popular? First, it targeted online sales channels from the beginning. On June 8 this year, it was reported that a netizen "bombed" Weilong's Tmall flagship store because Weilong did not ship the goods. While being flooded by netizens, Weilong's Tmall store clarified that it would cooperate with Rage Comic. The "store bombing" was just Weilong's marketing tactic.

The cooperation with Rage Comic will help Weilong's products penetrate the younger generation and gain new sales momentum.

Looking back at Qinqin, it has neither retained the "childhood taste" brand culture that White Rabbit emphasizes, nor combined with the current trend of the new era to update marketing methods and promote product upgrades.

But it is lamentable that when post-80s and post-90s netizens go to the supermarket and see a pack of Qinqin shrimp crackers with the original packaging, those childhood memories will surge again.

A netizen posted that they encountered the original packaging of Qinqin shrimp crackers in the supermarket, and commenters replied, "The advertisement from childhood is unforgettable," "I love this," etc. Perhaps Qinqin has never been forgotten by people; it just lost confidence in itself.

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