After more than 30 years, why don't consumers love Wahaha anymore? Thanks to Wantai Biological and Nongfu Spring, Zhong Shanshan became the first domestic billionaire to enter the top 10 of the world's richest list. Many people may be unfamiliar with Wantai Biological, but when it comes to Nongfu Spring, it can be considered a 'national-level' beverage brand after Wahaha. In fact, in front of Wahaha and Zong Qinghou, whether it's creating a national-level beverage brand or topping China's richest list, Nongfu Spring and Zhong Shanshan are only latecomers. But times have changed, and in the great transformation of the era, Wahaha seems to be aging along with Zong Qinghou.

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Wahaha No Longer Appealing, Zong Qinghou's 'So True' Looking back at 2020, every enterprise was running under dark clouds. But against the economic downturn, many new brands found new opportunities. Zhou Wenjing, vice president of Jianming Capital, said, 'The ones that stood out this year are all consumer brands in food and beverage.' In the food and beverage track, Wahaha is already a veteran player. But this year, like many new brands, Wahaha started running hard again. In summary, in 2020, Wahaha continued to aggressively expand into three new markets: sugar-free beverages, health products, and new-style tea drinks. At the same time, it began actively embracing two new channels: e-commerce and live streaming. Wahaha's layout in new markets actually started as early as 2002. Over the past decade or so, Wahaha has ventured into children's clothing, instant noodles, milk powder, mining, dairy, baijiu, and even artificial intelligence, but all ended in failure. This is reflected in performance: since 2014, Wahaha's revenue has been declining. By 2019, revenue had dropped from 78.3 billion yuan in 2013 to 46.4 billion yuan, with over 30 billion yuan 'evaporating'. In 2020, under the pressure of the pandemic, new consumer brands developed rapidly, with Genki Forest and new-style milk tea becoming hot favorites in the capital market. But Wahaha, lacking sensitivity to the new consumer market, was slow to follow others whether opening milk tea shops or launching sugar-free beverages. For example, the Sour Bubble soda water under the KellyOne brand founded by Zong Fuli seems to challenge Genki Forest by its name. Facing the 'internet-famous' Genki Forest that has already captured consumers' minds, Sour Bubble's breakthrough is not easy. Moreover, after Wahaha's first direct-sale store opened in July 2020 in Wushan business district, Guangzhou, many consumers who bought out of nostalgia for 'youth is back' ultimately gave reviews of 'sentiment over substance' because the taste was average. Furthermore, having entered the new-style milk tea market late, whether Wahaha can make a mark in the milk tea market through franchising remains to be tested. For Wahaha, which started with children's health products, the big health market is not unfamiliar territory. However, the big health field is now a red ocean, and it is not easy for Wahaha to find a foothold. Thus, in the old story of Wahaha's new market layout, new actions like establishing e-commerce channels and doing live streaming have been added, which are truly 'so true'. Zong Qinghou once publicly stated he would not do e-commerce. But in 2020, at the age of 75, Zong Qinghou began fully embracing e-commerce, launching four self-built e-commerce platforms at once: a health product e-commerce brand, a food and beverage e-commerce channel, a cross-border e-commerce platform, and the Haba platform for consumer interaction. Moreover, amid the live-streaming trend catalyzed by the pandemic, Zong Qinghou even did his first live stream in his life to promote Wahaha's health product e-commerce platform Kangyouli. Zong Qinghou's 'so true' owes much to Zong Fuli. Since Zong Fuli began serving as brand director of Wahaha Group in 2018, Wahaha has gradually moved towards rejuvenation. Whether it's changing the packaging of Nutri-Express, replacing Wang Leehom, the spokesperson for Wahaha purified water for 20 years, or doing nostalgia marketing and cross-border beauty products, all are under Zong Fuli's leadership, as Wahaha actively embraces young people and the new era. 'I don't want to be a successor. Why must I inherit? I don't want to inherit a company, but I can own it. If I succeed, I hope to acquire Wahaha.' Zong Fuli once said this in a media interview. Now, judging from Wahaha's new actions and Zong Qinghou's 'so true', Zong Qinghou, who still holds power at 75, has begun to let Wahaha bear Zong Fuli's imprint.

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Zong Qinghou Doesn't Understand Consumers, Zong Fuli Doesn't Understand Wahaha However, whether it's Zong Qinghou actively embracing e-commerce or Zong Fuli's rejuvenation reforms, it is difficult to save the already 'aging' Wahaha in the short term. The core reason is that Zong Qinghou doesn't understand consumers, and Zong Fuli doesn't understand Wahaha. The huge divergence between Zong Qinghou and Zong Fuli has not given Wahaha, this giant ship, a core direction, leading to all the work being done but not in a unified direction, inevitably resulting in half the results with double the effort. Thus, Wahaha presents a very contradictory state. Separately, the reason why Zong Qinghou, who single-handedly built the Wahaha empire, 'doesn't understand consumers' stems from the era's 'aftermath' of the joint sales system. 'For over 30 years, Wahaha has carefully woven a joint sales network covering nearly 10,000 distributors, hundreds of thousands of wholesalers, and millions of sales terminals, penetrating like capillaries into counties, towns, and villages across the country, enabling Wahaha's new products to be distributed nationwide in the shortest time,' is how Wahaha's official website describes the joint sales system. In the traditional retail era where channels reigned, Zong Qinghou's joint sales system achieved 'where there is a small shop, there is Wahaha', making Wahaha an undisputed beverage giant. But the layers of agents and distributors also kept Wahaha away from consumers. As early as 2014, Zong Qinghou admitted that it was 'difficult to understand the needs of the post-80s and post-90s consumer groups'. Now, as the new consumption wave blows, when the post-95s and post-00s become the main force, Wahaha is even more at a loss when facing these highly individualistic consumers. Perhaps Zong Qinghou hasn't realized that not understanding consumers means missing out on the era. In the era of channel dominance, whatever merchants sold, consumers bought. But now, Generation Z has become the main force in the consumer market, and the new consumption revolution is coming in full force. Only by following consumer demands—producing what they want—can one stand firm in the tide of the times. But Wahaha hasn't done that. Even though Zong Qinghou, who said 'so true' in 2020, began vigorously embracing e-commerce, it hasn't brought Wahaha closer to consumers. A typical example is the health product e-commerce platform Kangyouli, which is essentially an 'online joint sales system' wearing an e-commerce coat. During his live stream, Zong Qinghou said he would recruit 100,000 young people as social retailers and provide each qualified young person with a subsidized loan of 50,000-100,000 yuan. But on the Kangyouli app, if users choose to register as distributors, they need to sign a 'joint sales agreement'. Zong Qinghou seems stubbornly to think that by adding e-commerce to the joint sales system, Wahaha could flow into the mainstream consumption trend. But times have changed. I wonder if Zong Qinghou is clear that consumers already think Wahaha is no longer appealing. Zong Qinghou doesn't understand consumers. Zong Fuli, who studied abroad and decisively replaced the 20-year spokesperson Wang Leehom, should understand young consumers, right? Unfortunately, Zong Fuli may not understand Wahaha well. Under Zong Fuli's leadership, Wahaha has been trying to communicate with young people in recent years. Whether it's the personalized custom juice brand launched by Zong Fuli or cross-border products like cosmetics and blind boxes, they are all favorites of today's youth. But ultimately, they haven't brought substantial changes to Wahaha, instead earning reviews of 'consuming nostalgia'. This is because Zong Fuli may have overestimated Wahaha's brand power. After Wang Leehom was replaced by Zong Fuli, when mentioning Wahaha now, what memory points can consumers think of besides AD calcium milk, Nutri-Express, and other products? Genki Forest does 'saturation attacks' across all channels, Nongfu Spring continues to tell the story of 'nature's porter', and Want Want not only bombards with gift packs every Spring Festival, but 'Li Ziming' is also quite popular on Bilibili... What has Wahaha left in consumers' minds? The nostalgia of AD calcium milk and Nutri-Express may support consumers' 'youth is back' moment when they see Wahaha's cross-border moves, but they won't continue to pay for a drink that 'was never enough as a child but now feels too sweet'. Old stories are being forgotten, and no new stories are being told. In the new consumption era, the ability to tell compelling stories and constantly consolidate the brand's position in consumers' minds is as important as channels and products. Zong Fuli may have overlooked that in the childhood memories of the post-95s and post-00s, there may be AD calcium milk, but in their brand awareness, there may not necessarily be Wahaha.

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Conclusion Whether it's Zong Qinghou or Zong Fuli, judging from their actions in 2020, one can sense the urgency of both the helmsman and the successor to lead Wahaha's transformation. However, after more than 30 years, Zong Qinghou is still the same Zong Qinghou, sticking to the once-successful secret of 'channels' and unwilling to make major changes; while the idea-driven Zong Fuli lacks sufficient experience and an overall, systematic strategic plan, making it difficult to achieve results without instability. Thus, after a series of 'superficial' actions, the 'aging' Wahaha has not returned to 'the same youth as before'. Perhaps, for a long time in the future, as long as the joint sales system exists and as long as no substitute for AD calcium milk appears, Wahaha may still do well. However, as one who grew up drinking AD calcium milk, I hope Wahaha can unleash a transformative magic so that all consumers who grew up with AD calcium milk can sincerely exclaim 'youth is back', and also make the '100 billion revenue and century-old enterprise dream' that Zong Qinghou set at 75 no longer out of reach. Source: Mantis Finance (ID: TanglangFin) Author: Yi Bu'er Tips will be paid 400-2000 yuan once adopted.