Summary of Key Points
Wangwang’s net profit plummeted by 38% in the first quarter of its 2026 fiscal year, and the chairman stated that the company is facing a “serious operational crisis.” Over the past three decades, Wangwang has relied on three major advantages: its positioning as the first children’s snack brand, its advertising strategies (dominant during the television era), and its extensive distribution network across both urban and rural areas. However, these advantages have all disappeared. Although the management has frequently reflected on its situation, their efforts have only focused on areas where they feel comfortable, such as channels and advertising, without addressing the core issue: the lack of a coherent brand communication system and a clear “brand core.” As a result, consumers know the name Wangwang but are unclear about what it represents, leading to its failure to keep up with market changes.
Detailed Analysis
1. Wangwang’s past success was due to seizing market trends, but those advantages are no longer available
Thirty years ago, the Chinese snack industry lacked established brands; Wangwang was the first to position itself as a children’s snack brand. It combined its popular Wangzai character, catchy advertising (dominant during the television era), and a distribution network that reached even small rural shops, creating a powerful combination of advantages. However, today the situation has changed dramatically: fewer people watch television, advertising effectiveness has plummeted, new distribution channels (such as bulk snack stores) are competitive, and parents carefully read ingredient lists. Wangwang’s main product, sweet milk (made from reconstituted milk and white sugar), has been rejected by parents who are concerned about ingredients. Additionally, the overall snack market has shrunk (from 102.6 billion yuan in 2014 to 60.4 billion yuan in 2020), and Wangwang’s core product has suffered accordingly.
2. Management’s reflections are superficial and fail to address the core issues
Wangwang’s efforts to improve focus on areas where it is strong, such as strengthening its distribution network and optimizing advertising ROI. For example, the introduction of a separate business unit for dairy and ice products in 2024 led to a 10% increase in sales and administrative costs, with no significant improvement in results. This approach is akin to “patching up the existing framework” without questioning the fundamental direction of the brand. A real reflection should involve reevaluating the brand’s core values and positioning. For instance, since parents no longer buy sweet milk, Wangwang needs to redefine its brand message.
3. Wangwang is merely a well-known trademark, not a true brand
A brand is a cohesive set of associations in consumers’ minds. Think of Coca-Cola: its century-long history, the refreshing taste, the red bottle, and its association with happiness. Apple, on the other hand, is associated with Steve Jobs, minimalism, and quality design. Wangwang, on the other hand, only has a few recognizable elements (Wangzai, sweet milk, and ice cream). This lack of a clear brand identity means that while Wangwang is known, its meaning is unclear to consumers.
4. Compared to Coca-Cola and Master Kong, Wangwang lacks a strong brand core
Despite both being considered “unhealthy” products, Coca-Cola has succeeded by leveraging its established brand values (refreshing taste, happiness, red color) and by introducing zero-calorie options. Master Kong has revitalized by focusing on “Chinese flavors” and upgrading its products. Wangwang, however, lacks a clear brand core. Its attempts to diversify into dairy products, hotels, and toothbrushes have only confused consumers, and its core product, Wangzai milk, has not been updated in thirty years, leading to declining sales.
5. The essence of a brand lies in its core values and consistency
A brand is not just about advertising or popularity; it’s about a coherent set of associations in consumers’ minds. A brand should have a clear core, such as a philosophy, positioning, or style, around which all its activities revolve. For example, Apple’s core values of minimalism and innovation guide its product development and marketing strategies. Wangwang lacks this, resulting in a lack of direction in its new products and partnerships.
Conclusion
Wangwang’s crisis stems from a tripartite decline in products, distribution, and brand communication. The root cause is the lack of a coherent brand identity and core values, which prevents the company from adapting to changing market trends. A brand is not just a slogan; it needs to clearly communicate its purpose and values to consumers.