---
title: "You Say You're Transforming, But You're Not!"
description: "Large enterprises like Wahaha, Want Want, and Master Kong are often cited as models for transformation, but their strategies are not applicable to most SMEs struggling to survive. This article identifies three common 'fake transformation' symptoms among SMEs and suggests effective ways to transform using limited resources, such as increasing market penetration rather than breadth and creating consumption scenarios."
author: "余五洲"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-08-21"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/you-say-you-re-transforming-but-you-re-not-036b618d/"
markdown: "https://xinjignxiao.com/en/articles/you-say-you-re-transforming-but-you-re-not-036b618d.md"
original_source: "https://mp.weixin.qq.com/s/6wNL45nFJZvIY-F-BjYo6w"
translation: "https://xinjignxiao.com/zh/articles/%E5%98%B4%E4%B8%8A%E8%AF%B4%E8%BD%AC%E5%9E%8B-%E5%85%B6%E5%AE%9E%E4%BD%A0%E5%B9%B6%E6%B2%A1%E6%9C%89-036b618d.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/you-say-you-re-transforming-but-you-re-not-036b618d/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# You Say You're Transforming, But You're Not!

> Large enterprises like Wahaha, Want Want, and Master Kong are often cited as models for transformation, but their strategies are not applicable to most SMEs struggling to survive. This article identifies three common 'fake transformation' symptoms among SMEs and suggests effective ways to transform using limited resources, such as increasing market penetration rather than breadth and creating consumption scenarios.

Click 'Read Original' for details
"
Large enterprises carry their own halo; every move they make touches the hearts of industry practitioners.
Many experts always cite Wahaha, Want Want, and Master Kong, and talk about Nongfu Spring, Yili, and Mengniu. For most SMEs struggling on the brink of death, this offers little reference value.
Even with a nearly 40% decline, Wahaha still has sales of over 50 billion yuan, which alone directly outshines numerous SMEs.
A transformation path modeled on large enterprises is destined to be ill-suited, or you may end up going in circles without progress.
All such transformations can be called fake transformations. Besides these, there are three other fake transformation symptoms unique to SMEs.
"
1
**************| Three Fake Transformation Symptoms |**************
**▼**
**Fake Transformation #1: Claiming Focus, but Actually Diversifying After Focusing**
Traditional focus strategy means concentrating adjustable resources into markets that can maximize sales. Especially when facing growth difficulties and economic downturn, the first thought for transformation is to concentrate superior forces to attack a regional market.
Traditional focus transformations mostly involve advertising in model markets, making breakthroughs in KA, circulation, special channels, etc.
These channels, when counted, involve hundreds or thousands of stores with different attributes and serve different consumer groups, meaning the product still faces isolated consumer groups.
True market focus is to penetrate a specific channel to reach a critical point.
When ordinary consumers in that channel are talking about, exchanging, or using the product, the critical point arrives, and sales will see explosive growth.
Traditional market focus transformation merely moves from 10,000 markets to 2,000 markets. The original intention of building a model market is to occupy every channel and group in that market. Unfortunately, consumers in the model market do not resonate with each other or share and exchange opinions, so strictly speaking, this cannot be called a successful market focus transformation strategy.
**Fake Transformation #2: Claiming to Value Consumer Needs, but Actually Channel-Oriented**
Consumer feedback and reviews are highly valued by all internet companies.
A saying in e-commerce goes: 'All business is about brushing.' Brushing what? Traffic and reviews. Whether it's lining up people offline or paying for fake orders online, it can influence and promote other consumers' purchase decisions.
Traditional enterprises are required during transformation to not be channel-oriented but to satisfy and value consumer needs, making consumer interaction a key point of transformation.
However, when various operational modules such as raw material procurement, turnover, inventory, channel contribution, and distributor cooperation are adjusted accordingly, the transformation that values consumers often becomes just a slogan.
Cooperation with channel partners is frequent, close, and convenient, with direct economic benefits, while valuing consumers is inherently difficult, thankless, and has a long payback period.
Why is plagiarism and counterfeiting so severe in the FMCG industry? On one hand, enterprises seek convenience; on the other, channel partners also want to profit from the trend.
Traditional enterprises are constrained by short-term channel stimuli; no matter how loudly they shout about valuing consumers, they cannot compare with internet companies, making this another characteristic of fake transformation.
**Fake Transformation #3: Claiming Transformation, but the Body Is Honest**
Generally, traditional enterprises come with heavy assets, making trial-and-error costs extremely high, which leads most to adopt a slow and steady transformation approach.
In Chinese private enterprises, the boss's decision-making power is exceptionally important; employees and subordinates are mostly unwilling to bear the responsibility of trial and error. Choosing A or B is not based on detailed data analysis or multiple validations; most of the time, it's a hasty decision forced by time.
Transformation and the future are uncertain; no one can guarantee to always lead the trend or grasp future development, after all, there is only one Jack Ma in the world.
So traditional enterprises, constrained by their own key limiting factors, can only move forward slowly with patches and repairs.
Moreover, people fear change. In such situations, it's not that enterprises don't want to transform quickly, but they can't move, can't move fast, and dare not move. They say they want to transform, but their bodies are honest.
2
**************| How to Effectively Transform with Limited Resources |**************
**▼**
In such a changing society, facing BATs that might suddenly create unmanned supermarkets or artificial intelligence, how can traditional enterprises use limited resources for effective transformation?
1**Increase Market Penetration Rather Than Breadth**
When a market's penetration rate reaches a critical point, the number of people buying the product will see explosive growth because consumers feel that everyone around them is talking about and recommending the product.
Market focus is not a problem; building a model market and becoming the local leader is also fine. But success does not mean opening all channels in that market after focusing; any market's popularity requires consumer word-of-mouth, sharing, and exchange. Instead of placing products in all independent outlets (which cannot penetrate each other) in the focused market, it's better to fully penetrate the one channel most likely to generate word-of-mouth.
Let consumers communicate, share, and exchange, fostering herd mentality and trend-following habits.
When JDB was still called Wanglaoji and not yet famous, the Wenzhou market sold even better than its home base Guangzhou.
Discovering that Wenzhou people, besides regular dining, like to host banquets, they conducted high-density penetration of the banquet channel through free samples, tastings, and terminal promotions. Eventually, it was said that 'For Wenzhou weddings, the three reds (China Tobacco, Wuliangye, and Wanglaoji) are essential.'
By penetrating the banquet channel, they enabled consumer interaction, sharing, and comparison, accelerating penetration growth to reach the critical point, leading to explosive sales growth. Eventually, consumers themselves didn't even know why they used Wanglaoji; it was just herd consumption.
Focus is right, but you should look for channels or consumption methods that make it easier for consumers to communicate, interact, or compare, rather than spreading out across the focused market.
2**Create Consumption Scenarios Rather Than Following Trends**
Another transformation direction for traditional enterprises is to produce trendy products to ride on hot topics and boost sales and revenue.
FMCG companies flock to hot topics, creating hits like pork floss cakes and steamed cakes, but they soon fade. Phenomenal snacks like these achieved good penetration but did not establish any connection with consumption scenarios, nor were they chosen because consumers genuinely liked them.
The essence of marketing should be to create consumer demand scenarios. When do consumers think of you? Under what circumstances do they think of you?
Wanglaoji is thought of when preventing heatiness; the much-maligned Brain Platinum leaves a subtle impression: when you don't know what gift to give your parents, give Brain Platinum.
In Sichuan, there is a Blue Sword Beverage Group that industry insiders may not know well, but its Vivi Soy Milk holds nearly 95% market share in the catering channel. Vivi's strength lies in having both penetration (everyone drinks it) and establishing the restaurant consumption scenario, which further increases penetration.
This perfect combination of penetration and consumption scenario is worth our consideration and reference, as Vivi's sales in Sichuan even exceed the national sales of many food and beverage companies.
3**Necessity Is the Foundation of Transformation**
Li Jiaoshou (Li Jing) once wrote an article saying one sign of higher animals is tool use. The story of the crow drinking water, where the crow uses stones to raise the water level, but the crow didn't evolve into a higher animal, mainly because water sources are abundant in nature, so the crow didn't need to use tools much, eventually losing the chance to evolve.
Why do many enterprises claim to transform but their bodies are honest? Because the current environment, no matter how harsh, won't shut the doors overnight (lack of necessity). For new product development, following whatever is popular, making money before profits become transparent, and surviving by imitating trending products can be quite comfortable (lack of necessity).
Traditional enterprises have too many internal transformations and changes to make, too much resistance, and the feeling of having the will but not the strength is also a reason for difficult transformation (lack of necessity).
If you truly want to transform, you should create necessity.
Compete proactively rather than avoiding the real issues; innovate rather than imitate; integrate decisively rather than being soft-hearted.
Every transformation carries risks. If you find the risks unbearable, don't deceive yourself with fake transformation.
3
**************| Conclusion |**************
**▼**
Even in the most saturated categories, a few local leaders can carve out a path, leaving big brands helpless. Because they have high penetration in focused markets and have established corresponding consumption scenarios, making consumers willing to share and recommend, which greatly compensates for low marketing budgets in an era of outrageously expensive advertising traffic.
Any traditional enterprise's transformation, besides external pressure, depends more on whether internal motivation is sufficient and whether there is enough necessity.
Source: 'Sales and Marketing' Magazine Management Edition, Issue 09, 2017. Copyright belongs to the original author.
-END-


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671