How to fight your way out of the encirclement is also a big challenge for Zong Fuli.
On September 7, Wahaha's official statement pushed Wahaha and Zong Fuli to the center of public opinion. After the media reported the news of a class action lawsuit by a number of former employees and internal employees of Wahaha Group to defend their rights, Wahaha denied the above media reports one by one in a statement, but the incident is still fermenting.
On September 7, an internal employee of Wahaha was interviewed by a reporter from Nandu Bay Finance Society, he said: "After the new boss takes over, the management of employees is more strict, especially the old employees, who will feel that their vital interests are affected. ”
A few days ago, Zong Fuli became the legal representative, chairman and general manager of Wahaha, which means that she has taken over Wahaha Group since then, and many people also believe that Wahaha will enter a new stage of development. However, as the second-generation successor, Zong Fuli not only needs to form her own management style and means, but also balance the demands of a group of "veterans", and also needs to verify the effectiveness of her new management methods with performance.
Behind the turmoil caused by equity buybacks, Wahaha's internal contradictions have not been completely resolved
In the statement, Wahaha said that the internal share repurchase of the Group's employee stock ownership association was approved by the plenary resolution of the member congress, and the relevant agreement was voluntarily signed by the members of the shareholding association, which was legal and valid, and there was no harm to the members of the shareholding association.
However, the above-mentioned interviewee told reporters that at present, the majority of the income of many employees comes from the Wahaha Employee Stock Ownership Association, because this institution represents the rights and interests of all Wahaha shareholders, and every year the institution will distribute a part of the dividends and profits to the shareholding employees. However, equity repurchase means that employees can no longer get dividends from the employee stock ownership association after taking the repurchase money of 3 yuan per share, so some employees will worry that their future income will not be guaranteed.
The employee also said that although there was a talk of employee equity repurchase in 2018, it has not been implemented due to various factors, and many of the details are not known to employees.
Tianyancha information shows that in the current shareholding structure of Hangzhou Wahaha Group Co., Ltd., Zong Fuli, Hangzhou Shangcheng District Cultural and Commercial Tourism Investment Holding Group Co., Ltd. and Hangzhou Wahaha Group Co., Ltd. Grassroots Trade Union Joint Committee (Employee Stock Ownership Association) account for 29.4%, 46% and 24.6% respectively.
Behind the public opinion turmoil caused by the equity repurchase, the implementation of Zong Fuli's new management model is being tested.
First of all, compared with Zong Qinghou's low profile, Zong Fuli is obviously more sharp, and she does not shy away from revealing her ambition to sprint forward in public. Zong Fuli said in an interview with the media this year: "A generation has a generation's mission, the first generation of Zhejiang businessmen completed the 'creation' from 0 to 1, I think the mission of our generation is to complete the breakthrough of 1 to 10 or even 100 in the new wave of the times." ”
In terms of management style, Zong Fuli and Zong Qinghou are also very different, and she has publicly expressed her disapproval of her father's management style many times. It is understood that Zong Qinghou focuses on "humanism", and once said that "Wahaha treats every employee as a family member", does not dismiss employees over 45 years old, builds affordable housing for employees, and issues 600 million year-end bonuses; Zong Fuli is more "decisive", her business style and work style can be described as vigorous and resolute, various reforms are drastic, and the company pays attention to rules and regulations in company management, with clear rewards and punishments.
But there is no shortage of skepticism about this management method. Industry insiders pointed out that as a domestic beverage giant, Wahaha has built a solid and solid foundation over the years, but after years of development, the internal management structure of the enterprise has become more complex. For some old employees in the company, whether they can quickly adapt to such a management model is obviously a question mark.
"Cut" to products and channels Accelerate the reconstruction of offline channels
In terms of products and sales channels, Zong Fuli has also been overturning Wahaha's previous model. Since she entered the management team, she has been committed to creating younger IP and has begun to make drastic changes and innovations.
In addition to speeding up the pace of new product development and marketing, Zong Fuli also changed the packaging of Wahaha's purified water products from the previous red and white to sea blue packaging, obviously intending to make the product packaging younger; Prior to this, Zong Fuli also replaced Wang Leehom, the spokesperson of Wahaha pure water.
However, there are many obstacles to renovating in a huge beverage empire. From the progress of the equity repurchase, it can be found that the internal relationship of Wahaha Group is complicated. According to a person familiar with the matter, Wahaha's traditional sales channels are controlled by "veterans", and the interests of some people will inevitably be touched on major issues such as the removal of old products and the launch of new products.
In terms of sales model, Wahaha has always relied heavily on the joint sales model, but the excessive distribution levels of this model obviously increase the difficulty of promoting Wahaha's new products. This is also the sector that Zong Fuli is determined to focus on innovating.
On August 30, Wahaha's official website released the "Bidding Announcement for Freezer Maintenance and Market Launch Demand", involving the maintenance of 61,735 freezers of different years and the bidding of 100,000 smart freezers. This move is also interpreted as a landmark move by Zong Fuli to accelerate the reconstruction of offline channels. It is worth noting that the official website of Wahaha has deleted the announcement information.
However, it is not yet known how effective the increase in offline channels will be. Zhu Danpeng, China's food industry, believes that the launch of freezers, especially in first- and second-tier cities, has become saturated, leaving little space for Wahaha, and in the future, beverage brands should be committed to upgrading and iterating on the taste and quality of beverages, which is the long-term plan for development.
Shouldering the pressure of performance growth, the competition in the industry has intensified unprecedentedly
Whether Zong Fuli's new management model and a series of reform measures are effective, performance is the most intuitive way to test.
At present, there are different opinions in the industry about Wahaha Group's performance in 2023, and on the list of "2023 China's Top 500 Private Enterprises" previously released by the All-China Federation of Industry and Commerce, Wahaha's sales performance in 2022 is 51.202 billion yuan, but as early as 2013, Wahaha's revenue reached 78.3 billion yuan, which shows that its performance in the past ten years has generally shown a downward trend.
However, the problem of performance growth left to Zong Fuli is not easy to solve.
First of all, in the current packaged drinking water market, in addition to Wahaha, there are also giants such as Nongfu Spring, C'estbon, Jingtian, and Master Kong under China Resources Beverage. According to the CIC report, in 2023, in China's packaged drinking water market, the market shares of Nongfu Spring, C'estbon, Jingtian, Wahaha, and Master Kong will be 23.6%, 18.4%, 6.1%, 5.6%, and 4.9%, respectively, that is, Nongfu Spring and C'estbon will rank the top two, and Wahaha will rank fourth. In addition to traditional brands, the packaged drinking water track has also ushered in a number of cross-border entrants, such as Fat Donglai, Dongfang Selection, Yuanqi Forest, Yili, etc.
In addition, Nongfu Spring launched a green bottle of pure water this summer, forming a direct competition with Wahaha's pure water, and at the same time, in order to seize market share, Nongfu Spring took the lead in starting a "price war", and other brands have chosen to follow up, further compressing the profit margin of pure water.
In the beverage market, in addition to the above-mentioned bottled water giants, there are also a number of companies such as Uni-President China, Dongpeng Beverage, Reignwood Group, JuneYao Health, and Yuanqi Forest. Among them, Nongfu Spring is also a strong rival of Wahaha Beverage, thanks to the volume of tea beverage products led by Oriental leaves, the sector achieved a revenue of 8.43 billion yuan in the first half of the year, which is very close to its packaged drinking water revenue, an increase of 59.5% over the same period last year, and the proportion of revenue increased to 38%.
In addition, with the intensification of competition in the industry, the speed of product updates in the beverage market is accelerating, and consumers are more sensitive to price.
Author丨Wang Jingjuan
Editor丨Lin Yu
Source of this article
Nandu · Bay Finance Society
How to fight your way out of the encirclement is also a big challenge for Zong Fuli.