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Wahaha is still the ceiling of Chinese beverages!

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John Lau.

Not long ago, the Zhejiang Provincial Market Supervision Bureau, the provincial Federation of Industry and Commerce jointly released the “2021 Zhejiang Province, the top 100 private enterprises” list. The list shows that in 2020 Wahaha’s revenue was 43.98203 billion yuan, ranking 31st on the list. Compared with the ranking of 22nd in 2019, it dropped 9 places, and the revenue also decreased 5.29% year-on-year compared with 46.440.95 billion yuan in 2019.

So, the “bad theory” about Wahaha has resurfaced, as if it is not “right” enough to step on Wahaha. However, a message from a distributor on the food board is deafening: Wahaha, which has been constantly declined, is still the ceiling of China’s beverage industry!

01.

Under the pandemic, "down" is expected.

2020 was an extremely unusual year, and the impact on the beverage industry was particularly severe.

According to the financial reports of major companies: in 2020, the unified beverage business fell by 1.3% year on year, Nongfu Shanquan fell by 4.8% year on year, Dali beverage business decreased by 13.5%. Year-on-year and Yuyuan beverage fell by 40.65% year-on-year …… Therefore, Wahaha’s performance decline is really ” The 5.29% figure is also within a reasonable range and does not know what the fuss is about.

And, under the epidemic, Wahaha still has no shortage of bright spots, at least for the market’s resilience, fully reflecting the profound strength of the big brother. Take last year’s performance after the outbreak of the epidemic as an example. In a loss of 100 million in February, sales were restored to 80% in March, and year-on-year growth was achieved in April. Such resilience leaves many companies in the dust.

02.

Both "internal strength" and "external strength" have not been damaged.

Needless to say, today’s Wahaha does not have the same aura as when it was at its peak. However, with a volume of more than 40 billion, it is still the well-deserved ceiling of the Chinese beverage market. Even in the face of the impact of the Yuanqi forest, Wahaha still has the courage and strength to deal with it. Such confidence comes from Wahaha’s “internal” and “external” power.

Wahaha’s “external strength” is its brand power and channels. Thirty-four years of accumulation, the channel energy and brand influence, far from a few new consumer brands can be comparable. In addition, Wahaha has been in the game for so many years, relying on its muscular “internal strength” – a strong cash flow. In the epidemic, many companies faced difficulties in capital turnover during the epidemic. They had to cut salaries, lay off employees, and shrink their fronts, but what about Wahaha? In February, when there was a complete shutdown, Wahaha made a loss of just 100 million. But as always, its bank account is lying on more than 10 billion in cash.

Food in hand, there is no panic. Compared to the new consumer brands that play with capital, Wahaha may not develop as fast, but the road will be pretty steady.

03.

The "joint sales body" and "sales real estate" is still substantial.

The “joint marketing system” was the “original” of Wahaha in the 1990s, which played a vital role in the development and growth of Wahaha and had a far-reaching impact on the entire FMCG industry and has a pivotal position in the industry.

The subtlety of the “joint marketing system” lies in its “density” and “speed.” Wahaha has spent 34 years carefully weave a network covering nearly 10,000 distributors, hundreds of thousands of wholesalers, and millions of sales terminals, penetrating like capillaries to counties, towns and villages all over the country, so that Wahaha’s new products can always be spread to the whole country in the shortest time, and even rapidly go global through the distribution network. The “joint sales body” was once cited by Harvard Business School as a case of channel innovation in China. Zong Qinghou was thus awarded the title of “master of marketing” and “master of weaving.”

The most significant advantage of the “sales real estate” is “cost control” and “flexibility.” Wahaha’s “sales real estate” started in 1994 with the counterpart support to Fuling in Chongqing and has established 80 production bases in the country (especially in the old, young and poor areas), with 2-3 bases in each province and city on average. “This not only dramatically reduces the cost of production, transportation and storage, but also helps the company to cultivate the local market, accurately grasp consumer demand, flexibly adjust production plans, and thus promote product sales.

In recent years, Wahaha has continued to promote reform initiatives for sales and production systems, such as shortening channels in urban channels, integrating online and offline channels, digitizing the marketing system, intelligent production lines, etc., continuously injecting new vitality into the “joint sales body” and “sales real estate.” The “marketing real estate” continues to inject new energy. At least in the county and rural markets, Wahaha’s influence is still strong.

04.

Innovation and change, Zong Qinghou and Wahaha have been working hard.

To see the long-term development of an enterprise, we should look at the immediate figures and the spirit of the enterprise.

Under the guidance of these sixteen words, Wahaha has grown from a small school-run factory that was not famous and was looked down upon to a household name and a respected leading enterprise in China’s beverage industry. It has achieved a leap-forward development from scratch, from small to large, and significant to strong. Although it has achieved great success, Wahaha has never stopped moving forward but keeps promoting self-innovation and exploring transformation and upgrading.

Zong Qinghou once said that there are no eliminated industries for enterprises, only backward products, technologies, management, and operation modes. He hoped that Wahaha would become a “hundred-year enterprise.” The road ahead is sure to be bumpy. Still, Zong Qinghou remains open and optimistic: “I am a person with a good mentality, encountering difficulties and twists and turns, just get over it.”

In recent years, Zong Qinghou and Wahaha have been innovating and seeking changes: vigorously investing in product innovation, actively laying out extensive health, exploring intelligent manufacturing at the forefront, and intensely promoting brand upgrading …… These innovative initiatives have all continued to inject forward momentum for Wahaha. Under the leadership of the enterprise spirit of hard work and self-improvement, which is sure that Wahaha will not return to the top?

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