From the "Golden Decade" to "Eating the Old Ones"
Want Want Dilemma
■ "You're prosperous, I'm prosperous, everyone's prosperous", "Look at me again, and I'll drink you up!", "Li Ziming, classmate of Class 6, 3rd year, your mother brought you two cans of Wangzai's milk"...
■ Those born in the 1980s and 1990s must still remember these "magic" advertisements by Want Want China (HK: 00151).
■ Time flies. Founded in 1962, Want Want (originally named "Yilan Food") is now 60 years old.
In the middle of this month, Want Want posted a post on his official Weibo account to celebrate his birthday and launched a "Want Want Chaos Doll".
■ However, after the appearance of the "Chaowan Doll", many netizens complained. Netizens left a message saying that the design of the "Chaowan Doll" is "indescribable", and Wangwang should study the product well.
■ "Wangwangchao was ridiculed", there may be another layer of logic behind the incident.
Under the background of the rapid development of the Internet and the upgrading and iteration of new consumption, traditional snack companies such as Want Want have to adapt to the times and the trend.
It's just that the industry's "playing style" is constantly escalating, which often makes these old-fashioned companies "unacceptable."
■ Want Want may also be a typical representative of such traditional enterprises "unaccustomed to the soil and water".
once
highlight moment
According to the financial report, from 2004 to 2013, the compound growth rate of Want Want's total revenue reached 21%, which is also Want Want's "golden decade".
The highlight moment was in 2013, the total revenue reached a peak of 23.6 billion yuan, and the total market value exceeded 160 billion Hong Kong dollars.
The predecessor of Want Want was a canned food company in Taiwan, called Yilan Foods.
In 1976, Cai Yanming took over the right to operate Yilan Foods from his father.
In 1979, Cai Yanming found that Japanese rice crackers were very popular, and believed that the market in Taiwan, China, was equally lucrative.
So Cai Yanming "studied" in Japan, and in 1983 launched the rice cracker food "Wangwang Senbei".
According to public data, at its peak, the market share of "Wangwang Senbei" in Taiwan, China exceeded 95%, and almost everyone kept a pack of "Wangwang Senbei" at home.
In 1992, Want Want set up a factory in Changsha, Hunan and officially entered the mainland market.
Since then, Want Want has continued to deploy the "three axes" of "products, advertisements and channels", ushering in a period of rapid development.
In terms of products, Want Want has successively launched Want Want Milk, Want Want Small Steamed Bun, Want Want Crushed Bingbing, Want Want QQ Candy and other products. The portable and beautifully designed products have all become popular products at that time.
In terms of marketing, Want Want in mainland China mainly targets teenagers and children, so advertisements are basically shot from the perspective of children.
And children's ability to imitate advertisements is very strong, which has also led to a strong secondary communication.
These endless cycles of brainwashing advertisements have also made Want Want quickly known throughout the country; it has become the most familiar snack product for the post-80s and post-90s.
In terms of channels, Want Want attaches great importance to sinking the market, which is also Want Want's competitiveness.
According to public data, around 2008, Want Want had more than 1 million terminal outlets.
In addition, at the end of 2007, Want Want started the "Send Wang to the Countryside" campaign. Sales staff equipped with trucks directly faced the terminal orders in the townships and delivered them, and continuously increased the penetration rate of the towns and cities; as of 2010, the project has covered 1500 counties nationwide.
"Star products + brainwashing advertising + channel sinking", such a combination of punches, let Want Want usher in its rapid development period.
According to the financial report, from 2004 to 2013, the compound growth rate of Want Want's total revenue reached 21%, which is also Want Want's "golden decade".
The highlight moment was in 2013, the total revenue reached a peak of 23.6 billion yuan, and the total market value exceeded 160 billion Hong Kong dollars.
From the perspective of revenue structure, Wangzai milk has always been Want Want's "fist product", and this single product supports half of Want Want's country.
According to the financial report, the total revenue of Wangzai Milk in 2013 was about 11.2 billion yuan, accounting for about 48% of the total revenue.
now
brand aging
Flavored milk is less and less recognized by consumers, and Wangzai milk is naturally not immune.
When Wangzai Milk faced an industry crisis, Want Want's other two core businesses, "rice crackers and casual snacks", were also besieged by competitors...
Performance is stagnant for a long time
According to data from Frost & Sullivan, the scale of China's snack food industry has reached 1.3 trillion in 2020, with a 10-year compound growth rate of 12.22%.
The market is thriving, but Want Want's performance has fallen into a long-term stagnation since 2013.
The financial report shows that from 2014 to 2016, Want Want experienced negative revenue growth for three consecutive years, with total revenue falling from 23.6 billion yuan in 2013 to 19.7 billion yuan in 2016.
According to the latest annual report data, Want Want's revenue in fiscal year 2020 was 22 billion yuan, which still failed to exceed the level in 2013.
In terms of net profit, Want Want's net profit reached 4.2 billion yuan in 2013, and the company's net profit is basically stable at 3.5-4 billion yuan after that.
From the perspective of Want Want's business structure, all major businesses are challenged.
First of all, Want Want's dairy products and beverages (mainly Wangzi) have always been the main source of revenue for the company, accounting for half of the country.
However, as consumers' dietary concept changes, people pay more and more attention to healthy life and food safety, and advocate low sugar and less added.
Wangzai milk is made from reconstituted milk and added sugar. The nutritional value of reconstituted milk is not high, and the sugar content is too high and unhealthy, so it is gradually taken away by fresh milk and low-temperature yogurt.
According to Euromonitor data, in 2014, the scale of China's flavored milk market reached 103.6 billion yuan, but since then the industry scale has continued to decline, and it has dropped to 60.4 billion yuan in 2020.
It can be seen that flavored milk is less and less recognized by consumers, and Wangzai milk is naturally not immune.
When Wangzai Milk faced an industry crisis, Want Want's other two core businesses, "rice crackers and casual snacks", were also besieged by competitors.
In 2012, a company named "Three Squirrels" (SZ: 300783) was born, and in June 2012, Three Squirrels started trial operation on Taobao (Tmall Mall).
The brand focuses on nuts and dried fruits, instilling the concept of healthy and high-quality snacks for users, and continuously grabbing cakes in the snack market through online channels.
According to Taobao data, in 2014, the sales of three squirrels on the "Double 11" day successfully exceeded 100 million yuan.
BESTORE (SH: 603719) and others also focus on online operations. Most of these companies have realized asset-light operations through the OEM model, and the snack food market has undergone a silent reshuffle.
At this time, the challenges that Want Want faces in products and channels are already quite obvious.
The road to reform is not smooth
After the crisis, Want Want has also made certain adjustments and changes in corporate products and channels, but Want Want's reform path seems to have gone in the wrong direction.
In terms of products, Want Want implemented the strategy of "brand diversification" and "product differentiation" in 2015.
Aiming at customer groups such as mothers and babies, white-collar women, middle-aged and elderly and young consumers, Want Want has launched independent new brands such as Bond Coffee, Aizhizun, Mr.HOT, etc., and wants to face consumers in a brand-new way.
However, after the new brand was put on the market, it did not cause much splash, and the popularity was very low.
And Wangzai's new products have changed the soup but not the medicine, and the response in the market has been mediocre.
The new milk beverage products are still mainly reconstituted milk. Wangzai special milk, Wangzai nut milk and other products are not very different from the star single product Wangzai milk.
That is to say, although Want Want is aware of the aging problem of its own products and has actively launched new products, these new products are still mainly high in oil and sugar, and do not meet the real needs of users.
In terms of channels, Want Want's attitude is still to focus on offline and less online.
In 2016, Want Want once again increased the number of "send Wang to the countryside" to strengthen the penetration of channels in the sinking market; it still adopts the assessment policy for dealers, and strives to increase the profit of the channel; however, Want Want has less layout in the online market.
According to Alibaba’s online data, in 2018, the online market shares of the three squirrels, Baicaowei and BESTORE were 11.2%, 6.2% and 5% respectively, while the market share of Want Want’s online sales was less than 1%.
In addition, the financial report shows that Want Want's inventory turnover days in fiscal year 2019 and fiscal year 2020 were 90 days and 85 days, respectively, much higher than the industry average of 60 days.
New products are difficult to be recognized by consumers, and online traffic dividends are missed; every layout of Want Want seems to be going in the wrong direction, and ultimately, Want Want has been "eating on the old capital" and it is difficult to move forward.
new role
crossover king
In addition to making snacks, Want Want is actually involved in many industries.
Including insurance, media, hotel, medical treatment, electrolyzed water, pension, stuffing, etc.
In the past ten years, Want Want has not gotten rid of the label of "biting the old". Although the life cycle of products such as Want Boy Milk and Want Want Gift Bags is very long, selling feelings is not a long-term solution.
In recent years, in order to attract the attention of consumers again, Want Want has begun to develop towards the line of "spoofing", "opening their brains" and "doing no business".
In 2018, Want Want opened 50 Wangzai themed stores, selling bucket bags, pillows, mobile phone cases, sticky notes, mugs and other daily necessities.
In the same year, Want Want also launched a number of new products with “brain-opening”, such as: dollar-shaped fish roast, mustard and chili-flavored milk candy, tablet candies packed in tea bags, snow cake senbei bigger than the face, Wang Wang. Aberdeen pot head and so on.
Since then, Want Want has also started various cross-border linkages, such as cooperating with Nature Hall to launch the "Snow Cake Air Cushion".
In addition, Wangwang has not forgotten to take a nostalgic route, such as re-shooting the commercial of "If you look at it again, you will drink it up", and shooting the sequel to Li Ziming's version of Wangzai's commercial.
But Want Want has made so many "eye-catching" plans, most of the netizens just watch the excitement, and the popularity will soon disappear.
A lot of marketing expenses are spent, but users don’t pay much.
After all, the post-80s and post-90s consumer groups who used to like Want Want have already grown up, and their interest in Want Want has waned; however, Want Want has failed to capture the hearts of the current new consumer groups.
It is worth mentioning that in addition to making snacks, Want Want is actually involved in many industries.
Including the insurance industry (Wangwang Youlian), the media industry (Wangwang Zhongshi Media), the hotel industry (San Want Business Hotel), the medical industry (Hunan Want Want Hospital), the electrolyzed water industry (Wangwang Water God), the elderly care industry (Aizhiwang Health) management), stuffing industry (Wangwang Youshen) and so on.
Want Want is also known as the "King of Cross-border", but the benefits brought by these cross-border attempts are not obvious. For Want Want, whose basic market is gradually weakening, this method of "spreading the big cake" may continue to consume. The energy and vitality of the enterprise.
In the past ten years, Want Want has not gotten rid of the label of "biting the old". Although the life cycle of products such as Want Boy Milk and Want Want Gift Bags is very long, selling feelings is not a long-term solution.
To win the favor of today's young people, Wangwang's "three axes" are obviously not enough.
Chengdu Business Daily-Red Star News reporter Yu Yao and Liu Mi