For major FMCG companies, the past two years have been quite difficult. With the strong penetration of mobile internet, besides directly selling products, what will they rely on for survival in the future? Xiaofanzhuo learned that Zong Qinghou, the head of the Wahaha Group with sales exceeding 70 billion yuan, has made a bold attempt by quietly establishing an online company—Wahaha Fuli. Through this company, Zong intends to turn Wahaha's 30 billion bottles sold annually into 'mobile billboards', achieving the integration of offline traffic with online guidance, and revitalizing its vast offline traffic resources. It is reported that Wahaha Fuli is controlled by Wahaha Commercial Co., Ltd., holding exclusive rights to the bottle advertising space across all Wahaha brand beverage lines, with Zong Qinghou personally serving on the board. How will this battle, led personally by Zong Qinghou, unfold? Is selling ads on bottles feasible? To assess feasibility, we must start with Wahaha's transformation towards embracing mobile internet. Since 1987, when founder Zong Qinghou began peddling goods with a tricycle, Wahaha has now stood at the threshold of its 30th anniversary. Over the past three decades, Wahaha has seized numerous opportunities to create sales myths, so it never seemed worried about the gradual subversion and erosion of traditional commerce by mobile internet. This situation suddenly changed in 2014. That year, Wahaha's overall sales dropped by 7%, and in 2015, they continued to decline by 10%. Facing consecutive setbacks, the channel advantages that once made Wahaha proud, along with its trump card 'joint sales system' model, began to lose effectiveness. Zong Qinghou finally realized that transformation was an arrow that had to be released. However, regarding the direction of transformation, Zong Qinghou fell into confusion several times. In fact, Wahaha had started transformation efforts years earlier, but at that time, Wahaha was still in a high position with abundant funds, not viewing transformation as an urgent matter of life and death, but rather as a diversification strategy after growing bigger and stronger. Thus, whether it was children's clothing, milk powder, or liquor, Wahaha failed in all these areas for various reasons. It wasn't until recently, when the media buzzed about 'Wahaha's transformation into robotics', that Zong Qinghou first admitted 'different industries are like different mountains' and that caution was needed. ▲ Zong Qinghou After much deliberation, Zong Qinghou and his team finally found inspiration in the vast offline sales system he is most proud of—'covering 34 provinces and cities nationwide, with over 6,000 joint sales clients and 5.4 million retail outlets'. 'Annual sales of 30 billion bottles' is also Wahaha's favorite achievement to boast about. In an era of high customer acquisition costs, the massive offline traffic has almost become the only hope for Zong Qinghou to catch the last train of enterprise transformation in the mobile internet era. In the eyes of Zong and his investment team, those 30 billion bottles are 30 billion living 'mobile billboards'. To turn the tide, Zong Qinghou seized this opportunity. Thus, in April 2016, Shanghai Wahaha Fuli Network Technology Co., Ltd. (English name: Shanghai Wahaha Fuli Network Co. Ltd, hereinafter referred to as 'Wahaha Fuli') was officially registered. The company was co-founded by Wahaha Commercial Co., Ltd., Century Lianrong Holdings Co., Ltd., and Shanshan Holdings Co., Ltd., among others. Wahaha Group, with an actual investment of 51 million RMB, is the controlling shareholder with a 51% stake, while Century Lianrong, Shanshan Holdings, and Shanghai Hengda led the investment with stakes of 39%, 8%, and 1%, respectively. Zong Qinghou and others serve on the board, with Wang Hongxin, founding dean of Shanghai Jiao Tong University's School of Overseas Education and president of Century Lianrong, as chairman. From its inception, the company was infused with Zong Qinghou's enthusiasm. According to the official website, within just three months of establishment, Wahaha Fuli had secured six clients: Lin Qingxuan, Zuzhuangxiu, Jingshiling, Junkang Life Insurance, Debon Securities, and Midea. The Fuli Hui app, launched two months prior, had over 100,000 backend fans—a gratifying achievement. The company proudly announced that the project's valuation had reached 1 billion RMB. To attract attention, Wahaha even attacked the 'O2O' concept, calling it a false proposition, and coined a new term 'OAO' for online-offline business models. The Fuli Hui team also co-hosted the 'China's First OAO Summit' with Shanghai Jiao Tong University, which was actually Wahaha Fuli's strategic cooperation launch event. The summit claimed that the core of the 'OAO' model is transitioning from tangible product internetization to intangible service internetization, with every traditional sales and service link seamlessly embedding data collection and SCRM, and their integration giving rise to a new economy. It's not hard to see that this explanation, besides being vague, hardly clarifies the difference from O2O. Currently, Fuli Hui's gameplay mainly involves three aspects: First, 'mobile billboards'—Wahaha authorizes over 20% of the bottle surface area exclusively to the Wahaha Fuli Hui platform, hoping to leverage Wahaha's massive offline bottle traffic to endorse this 'mobile billboard' and attract advertisers; Second, user guidance—through scanning codes on bottles, users access the 'Fuli Hui' app's online discount platform, where activities like lucky draws and coupons guide users to various brand merchants' e-commerce platforms for consumption; Third, data analysis—by accumulating a certain amount of user information, the platform gradually analyzes user consumption and purchasing patterns to derive preferences, providing big data support for partner merchants. Xiaofanzhuo reporters found that the Fuli Hui platform still has many issues. Not to mention that the initially designed 'Haha Discount' and 'Haha Agent' features have not been practically implemented, remaining as promotional decorations on the official website; the official website lacks a download section for the Fuli Hui app; and the official WeChat platform's structure is extremely chaotic. From a broader perspective, Zong Qinghou's offline traffic trump card also faces the risk of reshuffling at any time. According to media reports, from 2015 to 2016, many FMCG companies experienced an unprecedented 'cold winter' in offline sales, with many well-known FMCG foreign companies laying off employees. Earlier this year, regarding Wahaha's 2016 performance, Zong Qinghou stated, 'It's much worse than previous years, but flat compared to 2015', and its 100-billion-yuan revenue target had to be shelved indefinitely. On the other hand, the app market for scan-code discounts has already become a red ocean. For users, the information security risks associated with scanning codes have made them weary, and public enthusiasm for scanning has significantly decreased in recent years. Fuli Hui, upon launch, adopted the internet's money-burning model, aggressively promoting 'crazy phone giveaways' as subsidies. Countless facts have taught us that users are ruthless; once subsidies run out, even if Wahaha has billions of 'mobile billboards', the exposure remains huge, but at this juncture, conversion rates pose another challenge for the Fuli Hui team. The big data analysis proposed by the team is a long-term project, and whether clients have the patience to wait remains unknown. Under the grand vision of 'building China's best effect-driven traffic guidance platform', will Zong Qinghou's plan for his beverage bottles bring him surprises? As it stands, the situation is not optimistic. Source: Xiaofanzhuo**** -END-