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after taking control of wahaha again, zong fuli is facing a new round of challenges.

recently, wahaha's official statement has once again pushed zong fuli to the center of public opinion. the trigger of the incident was that wahaha group recently required employees to re-sign labor contracts and buy back employee stock ownership shares at a lower price. after the media reported that many former and internal employees of wahaha group filed class action lawsuits to protect their rights, wahaha denied the above media reports one by one in its statement.

behind the equity repurchase storm is the fact that wahaha’s internal conflicts have not yet been fully resolved.

after the resignation storm, zong fuli gradually took control of wahaha's management rights. on august 29, wahaha underwent industrial and commercial changes, and zong fuli succeeded her father zong qinghou as the legal representative, chairman, and general manager of wahaha. equity penetration shows that zong fuli holds 29.4% of the shares, which is consistent with zong qinghou's previous shareholding ratio, making her the actual controller and beneficial owner of wahaha.

at the same time, there were personnel changes in wahaha's senior management. many senior executives such as zhang hui and wu jianlin resigned from the positions of directors and supervisors. ye yaqiong, fei junwei and others were added as directors, and wang guoxiang was appointed as director and deputy general manager.

after some changes, zong fuli basically took control of wahaha. but now the share repurchase has once again triggered a storm of public opinion, and the new management model of the zong fuli era is being tested.

the bigger test is that wahaha, which has officially entered the "zong fuli era", is about to face a head-on confrontation with zhong shanshan.

a "water war of the century" in 2000 drew a clear line between natural water and purified water. nongfu spring has never produced purified water since then, leaving this huge and lucrative market to wahaha and other players.

but shortly after zong qinghou passed away in late february this year, nongfu spring launched green bottled pure water in an attempt to invade wahaha's territory.

in order to seize market share, zhong shanshan took the lead in launching a price war, bringing bottled drinking water back to the "1 yuan era", and launched a large number of advertisements, including variety show sponsorships, large subway advertisements, bus stop signs, and elevator advertisements. nongfu spring's slogan can be seen everywhere: "the green bottle is a little sweet, the red bottle is healthier."

faced with zhong shanshan's attack, zong fuli chose to fight back and also lowered the price of bottled purified water to less than 1 yuan. at the same time, zong fuli also made frequent moves in sales channels, products and marketing, including raising the salaries of sales staff, increasing investment in terminal freezers, focusing on sugar-free tea drinks, and increasing investment in e-commerce platforms.

however, green bottled pure water has not reversed the downward trend of nongfu spring's drinking water sector.according to nongfu spring's 2024 interim performance report, the revenue of its packaged drinking water business in the first half of the year was 8.531 billion yuan, a year-on-year decrease of 18.3%.

nongfu spring considered the online rumors in the first half of the year as the reason for the poor sales of its drinking water. the company's financial report stated that in january and february this year, the group's packaged drinking water product sales revenue increased by 19% compared with the same period last year. however, since the end of february, a large number of public opinion attacks and malicious slander against the company and its founder have appeared on the internet, which has had a serious negative impact on its brand and sales.

but even if there had not been this "cyberbullying" incident, nongfu spring's revenue growth in this business would have been sluggish.

from 2018 to 2021, the revenue growth rates of nongfu spring's drinking water category were 16.4%, 21.8%, -2.6% and 22.1% respectively. however, in 2022, the growth rate of packaged drinking water revenue began to slow down, with the revenue growth rate that year being only 7.1%. although the revenue growth rate in 2023 increased to 10.9%, it was still not comparable to 2021.

with zong fuli successfully taking over wahaha, a new "water king war" will unfold between zong fuli and zhong shanshan.

in the past few months, zong fuli and wahaha were caught up in succession doubts, while zhong shanshan and nongfu spring were besieged by online rumors. but beyond the chaos, the offline channel war between the two beverage giants is quietly starting.

on the second day after zong fuli took over wahaha, wahaha's official website released a "refrigerator maintenance and market launch demand bidding announcement", planning to bid for 100,000 smart refrigerators. this move is seen as part of zong fuli's strategy to reshape wahaha's offline channels.

freezers are a "battlefield" for offline channels of beverage brands. since taking over wahaha in march this year, zong fuli has increased the investment in offline freezers. judging from the bidding announcement disclosed this time, wahaha's investment in offline freezers is still continuing.

after zong qinghou's death, wahaha was once popular in the market, but the flowers also exposed wahaha's shortcomings in sales channels. many netizens said on social platforms that "wahaha is not available in supermarkets in their cities." therefore, zong fuli's first move after taking over was to reconstruct offline sales channels.

in order to launch a successful terminal distribution assault and "let everyone see and buy wahaha products", zong fuli not only raised the salaries of wahaha sales staff by 150% after taking over, but also issued two battle letters "a letter to all sales staff" to boost morale, and promised to give rewards to meet the challenges of surging sales and insufficient staff.

freezers are one of the offline channels that zong fuli values. at that time, there was a video circulating online showing that wahaha was increasing its offline freezer deployment. some netizens on social platforms also reported that wahaha freezers had recently entered the cafeteria of their school.

"it was difficult to find wahaha outside of large supermarkets before," said wang yuning, a post-90s girl living in beijing. until this year, wahaha purified water could be found in convenience stores near the company, roadside shops, and even newsstands. "i have also seen wahaha freezers in community convenience stores."

nongfu spring, which has a strong offline channel, has an absolute advantage in the number of freezers. according to the financial report, as of the end of 2019, nongfu spring covered more than 2.37 million terminal retail outlets across the country, of which more than 360,000 terminals were equipped with "nongfu spring" freezers. after the freezer war with yuanqi forest, data shows that nongfu spring has about 650,000 freezers.

although the number of wahaha's freezers will not exceed that of nongfu spring in the short term, if it is allowed to continue, it will inevitably affect nongfu spring's future market share and profitability performance.

now, wahaha has once again increased its freezer layout, and the "freezer war" between wahaha and nongfu spring is about to break out.

freezers have always been a battleground for offline beverage brands, serving as both a sales channel for products and a brand display space. in a limited store space, the battle for freezers is clearly a life-and-death struggle.

in 2021, yuanqi forest was besieged by "two le and one fu" in the freezer war. according to media reports, in order to consolidate the original advantages of nongfu spring, zhong shanshan personally led the team to swear an oath and launched the "god of wealth from heaven" activity in some areas, requiring dealers to put their own soda sparkling water into yuanqi forest's refrigerators. the reward given is that for every bottle of nongfu spring sparkling water on display, a bottle of changbaixue, which is sold at a terminal price of 3 yuan, will be given, capped at 48 bottles.

although zhong shanshan has not yet launched a "siege" against wahaha, he has launched a "price war" to fight back. for zhong shanshan, the controversy surrounding zong qinghou's death has become a "black swan" event that has drawn him into public opinion storms.

the impact of this incident was beyond zhong shanshan's imagination. on the one hand, consumers boycotted the products, and on the other hand, some supermarket owners took the initiative to replace nongfu spring products with wahaha products due to public pressure.

at the end of april this year, nongfu spring suddenly launched a large-scale distribution of green-bottle purified water, rushing to attack wahaha's foundation before the summer sales peak season. it also tried to attract consumers through low prices. the price in some channels even dropped to 0.66 yuan per bottle, and the impact on wahaha's purified water business is self-evident.

for fast-moving consumer goods such as water, consumers' choices are full of randomness. they may change their minds because of sentimentality, or they may choose to return because of low prices.

however, judging from nongfu spring’s financial report for the first half of this year, it will be difficult for zhong shanshan to completely get rid of the influence of public opinion in the short term, and nongfu spring’s position as the leader in the drinking water field has also shown signs of loosening. this may also provide an opportunity for zong fuli to lead the wahaha empire back to its peak.

as zong fuli once said in an interview, "i want to change wahaha's brand image that has lasted for more than 30 years. in my eyes, rejuvenation is the way for wahaha to revive its business."

wahaha has always been plagued by the aging of its brands and products. in the past five years, wahaha has launched about 80 new products at sales meetings, including upgraded products of children's nutritional liquid and nutri-express, as well as new products such as sugar-free tea, soda water, and electrolyte water.

as of now, wahaha's soft drink products include more than 150 varieties in categories such as dairy drinks, bottled water, carbonated drinks, tea drinks and fruit juice drinks, with a total of more than 400 products of different specifications.

although many new products have been launched, the industry's impression of wahaha still remains on the old three - ad calcium, nutri-express, and purified water.

wahaha’s “joint sales body” mechanism may be one of the reasons why its new product promotion results are not good.the sales network of the “joint sales body” has penetrated every capillary of the country, and can make new products available nationwide within a week. however, the premise of agility is that the power of channel operation is fully controlled by dealers. if dealers are unwilling to increase their efforts to promote new products, wahaha will become very passive.

it is not difficult to see from wahaha's new product research and development that wahaha plays the role of a "follower", keeping up with the hottest trends and occupying consumers through its own channel outlets as dense as capillaries.

however, the new generation of consumers have more personalized and diversified demands for beverage products, and wahaha’s difficulties have become increasingly prominent. on the one hand, it lacks popular new products, and on the other hand, the influence of its traditional marketing model has begun to decline.

in order to optimize the dealer network, after taking over, zong fuli also implemented a system of eliminating the last-place dealers with sales volume as the assessment target.

according to 36kr, wahaha distributor li zheng mentioned that wahaha in his region is eliminating the last distributors, and the standard is sales. "in the past, it was enough to maintain growth in the same period, but this year the assessment has become 100% growth in the same period, which is very unrealistic. it's not that they don't want to sell, but the production capacity can't keep up, and they are often out of stock."

promoting wahaha's transformation to a younger audience is also what zong fuli has been doing since she joined the wahaha group. in 2018, zong fuli served as the head of wahaha's brand public relations department. she made "personalization" and "ipization" changes to wahaha's brands, frequently carried out cross-border joint marketing, and replaced wang leehom, who had endorsed wahaha for 20 years, which attracted widespread attention from the outside world.

in 2021, wahaha announced that the sales of its ad calcium milk series products returned to 10 billion yuan, which became the first shot in wahaha's product rejuvenation.

after taking over wahaha, zong fuli began to increase investment in e-commerce platforms that are closer to young people. in march this year, wahaha organized a bidding activity for douyin and xiaohongshu advertising agents through its brand public relations department. the service content included douyin influencer advertising and xiaohongshu influencer advertising.

in addition, in august this year, wahaha launched a tender for the agency operation service of wahaha creative flagship store, hoping that the store will officially announce and link up with wahaha's new products. the product goal is to create at least 3 online hit products, with an annual sales target of 45 million yuan.

recently, on social platforms such as xiaohongshu, young people have started to use wahaha skin care products, and "substitutes" are popular. wahaha pure water, which costs 1 yuan, has become a substitute for hydrating spray. it is still unclear whether this is a spontaneous behavior of netizens or promoted by the brand, but it can be seen that wahaha is indeed closer to young people.

zong fuli has taken over wahaha in full, and the dispute over succession has come to an end for the time being. however, in order to better cope with the competition from nongfu spring, wahaha, led by zong fuli, may need to take more decisive actions.

as zhong shanshan is entering the purified water market, wahaha might as well enter the mineral water market.

currently, wahaha has two water sources: wulong spring and danfeng spring in changbai mountain. according to titanium media, zong qinghou did not produce mineral water after obtaining the water source, but filtered out the mineral components in the mineral water and sold it as pure water.

however, compared with purified water, natural mineral water has a larger profit margin. high-quality and scarce water sources have always been one of the main selling points of high-end water brands. wahaha, which has changbai mountain water resources, obviously has room for operation.

in fact, starting from 2022, wahaha began to focus on natural mineral water, and also highlighted the water source "changbai mountain wulongquan" in product promotion, saying that the product uses 8°c self-flowing spring water all year round, filtered through layers of basalt, and snow-capped mountain mineral spring, which is pure and sweet.

but in fact, consumers are no longer surprised by the changbai mountain water source. water is a highly homogeneous industry, without much room for innovation and iteration, so marketing has become the highlight. zong fuli once said bluntly: "nongfu spring's marketing is better than wahaha."

but like the more than 150 new products launched by wahaha, wahaha natural mineral water has not entered the public eye due to the aging of its brand, channels and marketing.

for zong fuli, a faster and more direct way might be to enter the live broadcast room.face consumers directly when public emotions are at their highest, solicit new product development directions, lead everyone to visit the factory, or tell the story of wahaha's craftsmanship, all of which solve the two major problems of new product promotion and brand rejuvenation in one fell swoop.

on the other hand, for zong fuli, it is another effective way to promote wahaha while keeping peace at home. in the past, zong qinghou insisted on not going public, based on his ability to balance the interests of various entities with his personal charm, so that wahaha would always be in a stable state. but for zong fuli, who just took over the group, this art of balance is not so easy to master, and the introduction of market-oriented management concepts may be more suitable for the current wahaha.

at present, the equity structure of wahaha group is mainly composed of three parts: hangzhou shangcheng district cultural, commercial and tourism investment holding group co., ltd. (holding 46%), zong fuli (holding 29.4%), and hangzhou wahaha group co., ltd. grassroots trade union joint committee (employee stock ownership association, holding 24.6%). from the perspective of equity structure, wahaha's equity barriers to listing are not great.

going public can provide companies with more abundant sources of funds, and will also force companies to sort out and build more standardized equity structures and governance systems, attract more outstanding talents, and bring richer returns to shareholders, thereby achieving sustainable development.

zhong shanshan has become china's richest man thanks to his listing. in 2020, nongfu spring was listed on the hong kong stock exchange. its market value on the first day of trading was hk$440 billion, and its peak market value was as high as hk$700 billion. zhong shanshan became the new richest man in china.

but in fact, nongfu spring's sales in recent years have been lower than wahaha. this also means that if wahaha were to go public, its market value would likely surpass nongfu spring and become the "king of beverage stocks."

but going public also means facing many challenges such as internal governance, maintaining stock price stability and being accountable to shareholders and investors.

nongfu spring, which went public earlier, is an example. the price war directly led to a decline in nongfu spring's overall gross profit margin. according to the financial report, in the first half of this year, nongfu spring's gross profit margin was 58.8%, down 1.4 percentage points from 60.2% in the same period last year. its sales and distribution expenses also increased. in the first half of this year, nongfu spring's sales and distribution expenses were 4.971 billion yuan, a year-on-year increase of 5.9%.

this has caused investors to worry about its future performance, and nongfu spring's stock price has continued to be cold in the capital market recently. on may 3, the company's stock price reached a staged high of hk$47.924 per share, and closed at hk$46.795 per share that day. since then, its stock price has fluctuated downward. as of the day when nongfu spring announced its plan to increase its holdings, its stock price closed nearly 30% lower than on may 3, and its total market value evaporated by more than hk$150 billion.

on july 10, the day after it announced its share purchase plan, its stock price rebounded slightly and finally closed at hk$35.25 per share, up 4.44%, with a total market value of hk$396.438 billion.

but no matter what, from the moment the two beverage giants stepped into the same river, the head-on confrontation between zong fuli and zhong shanshan had begun.