[JMedia] Zong Qinghou reflects on the decline in performance. What makes Wahaha unable to sell？

At the end of 2016, CCTV’s second set of "Dialogue" broadcast a program called "Focus on the real economy, speak for China’s industrial industry", inviting Zong Qinghou, Dong Mingzhu and other famous enterprise leaders to talk on the same occasion. During the period, Zong Qinghou not only talked about the real economy, but also responded to a number of topics including Wahaha’s sales decline and Zong Fuli’s succession. 　 　

Regarding the decline in performance, Zong Qinghou made a reflection and summarized the top ten reasons for the decline in Wahaha. Which one do you feel the most about?

1 Sales decrease

Of the ten reasons, Mr. Zong attributed the top one to increasing dealer costs. Rising costs have led to a decline in sales enthusiasm, and sales have also declined. "Rental costs are expensive, labor capital is expensive, and transportation costs are expensive," Mr. Zong said. "Retailers are demanding higher price spreads, so the company needs to add some high-value-added products. I’ve always said that sales should solve the problem of who sells it to you and who buys it." The first issue, he said, is a matter of interest. If you don’t make money selling your products, who will sell it to you?

The recession of the real economy and the rise of online shopping have undoubtedly brought huge challenges to traditional enterprises, and the increased taxes, rents, and labor costs cannot be compared with online shopping. How to promote the development of the real economy is not only a dilemma faced by Wahaha and Zong Qinghou, but also a problem to be solved by the development of the entire national economy.

2. The negative impact of online rumors

Nutrition Express, Shuangjiaowai "air dry" and turn into "gel"? "Drinks cause leukemia"? "Drinks contain botulinum toxin"? According to Wahaha Group’s monitoring of self-media platforms such as Sina Weibo and Tencent WeChat, the above rumors have been found since 2014. Nearly 30,000 articles have been found, and the number of reprints and views has exceeded 170 million times, causing losses to Wahaha of more than 2 billion yuan.

Because online rumors spread widely and quickly, it is easy to bring adverse effects to the enterprise and even the entire industry. Not only Wahaha, but also products like instant noodles lose countless losses every year due to the reduction in sales caused by rumors.

3. Population transfer from rural to urban areas

Wahaha is a large enterprise that has been developing for decades. Compared with other enterprises, its sales channels in rural areas and third- and fourth-tier cities have been well-established due to its strong joint distribution network. In some large cities, it is easier to expand new channels without small brands, such as small supermarkets and chain convenience stores.

With the process of urbanization in our country, the rural population continues to transfer to cities, and Wahaha’s offline channels also need to be further expanded.

4 There are too many types of products on sale, and there is a lack of large single items.

Wahaha’s official website shows that it now has 14 major series of products, including beverages, snack foods, convenience foods, drinks, dairy products, and health products.

Once, Wahaha also created pure water, AD calcium milk, nutrient fast line, nutrient solution, lotus seed eight treasure porridge and other explosive products, but with the aging of the brand and lack of innovation, the advantages of these explosive products have not been able to continue, and the congeneric products of other companies gradually catch up.

5 There is no plan for new product development

When it comes to the development of new products, the editor has to say that Wahaha has a very failed new product promotion plan. Qili is a taurine energy drink launched by Wahaha in March 2012. Wahaha used its own distribution system advantages to make a comprehensive layout at that time, and also named the most popular variety show at that time "The Voice of China".

Qili contains seven major nutrient groups such as taurine, L-carnitine, D-glucosamine hydrochloride, inositol, and B vitamins, which are very advantageous as an emerging functional drink. However, Wahaha has the wrong positioning of the product, pricing 6.5 yuan even more than Red Bull, which occupied the main market of functional drinks at that time, and in the promotion, "often drive, always have Qili; take into account specimens; authentic health functional drinks; drink Qili without harming the body; seven major nutritional attacks and enhance immunity" are too listed to give consumers memory points. Since its launch, sales have been tepid, not only failed to compete with Red Bull in the market, but also surpassed by the later launched Lehu and Dongpeng special drinks.

The media environment is constantly changing

Although Wahaha was one of the first companies to advertise, the current media formats are diverse, with traditional media declining and new media emerging. Wahaha has not yet fully adapted to this change.

7 Consumer attitudes have undergone tremendous changes

The main consumer groups are changing, and for the post-90s and post-00s, packaging is the first factor to consider, followed by whether the brand concept is appealing to people, and again whether the taste and taste of the product are suitable.

8. Market development is not deep enough and uneven

Many Wahaha products are best-selling items in the region. Due to the lack of market development depth, many Wahaha products have not been able to be developed despite their great market potential.

9 Improper command by sales executives

The former Wahaha sales boss misdirected, opened customers indiscriminately, and turned big customers into small customers, because the spread became smaller, dealer sales were not active, and end point orders were reduced.

10. Reduced harmony in vendor relationships and poor management of sales teams

The relationship between manufacturers in some markets of Wahaha is not harmonious. In some markets, salespeople cheat dealers, or dealers cheat salespeople. And some salespeople have poor discipline and are not active in work.

However, Zong Qinghou also expressed optimism that although the performance has declined, there is no big problem in rebounding again. "I have a good mentality. When I encounter difficulties and setbacks, I will pass."

In 2017, Wahaha launched more than a dozen new products, ambitious to regain lost ground. Whether it succeeds remains to be seen.