WAHAHA vs DANONE: Cats & Dogs

• Lose contol of all the companies even they existed before investment and didn't belong to JVs;
• Becoming the outsourcing company of DANONE, not be dominated in Chinese market;
• Chinese beverage market would be monopolized by DANONE and own brand would disappear; (Like Xiangxuehai Co. and Peacock)
• Hurting Chinese people feelings, lose trust.

DANONE Growth

WAHAHA Growth

• French, multinational alimentation company
• 140 countries
• Profit: €1.561 billion (2014)

• 20 years ago: Wahaha was just a sales department of a school-affiliated enterprise.
• 1989: Hangzhou Wahaha Nutrition Foods Factory was founded.
• Wahaha found its « niche ».
• « Foods taste great with Wahaha »

COOPERATION

WAHAHA Growth

2007

1996

Background of DANONE

• 1991: Wahaha merged with Hangzhou Canned Foods Factory.
• 1992: Hangzhou-Wahaha set-up a joint venture with Hyonong.
• 1994: Wahaha echoed the governmental policy at that time.
• 1996: Wahaha started to cooperate with the French group « Danone »
• 1998, launched the "China's own Cola - Very Cola"
• In 2002, Wahaha began production and sales of children's clothing

Facilitated by Hong Kong Peregrine Investment Holdings, two companies started to negotiate.

1. Willingness to integrate into Chinese market since 1978.

2. To some extend, knowing Chinese market from the beginning of 1990s.

DANONE

WAHAHA

Cooperation

To DANONE

JVs

• Taking charge of all the companies with name of WAHAHA; (Step into different fields and profit more)
• Be more competitive in the market;
• Monopolizing Chinese beverage market.

1996

In 1996, a JV was set up by DANONE, WAHAHA Group and Peregrine.

1. Hangzhou Wahaha Baili Foods

2. Hangzhou Wahaha Health Foods

3. Hangzhou Wahaha Beverages

4. Hangzhou Wahaha Quick Frozen Foods

5. Hangzhou Wahaha Foods (From Hangzhou

Wahaha Hyonong Canned Foods)

The different points of view

Disputes

Danone

• Only the JVs had the right to use the trademark.
• Wahaha Group used the trademark in many other businesses. These enterprises manufactured similar products as the join venture, they were competing directly with the JVs
• Wahaha Group mustseek the permission from Danone and the JVs.

Wahaha

• Mentioned enterprises existed before 1996.
• Danone has invested many beverage producers in China.
• Danone’s purpose was to make Wahaha become just one of its outsourcing companies.
• Trademark Office of the State Administration for Industry & Commerce in China have never approved Wahaha Group to transfer the Wahaha’s trademark.

Strategy of WAHAHA

Start Point

April 2007: Danone accused Wahaha of using the trademark of Wahaha outside the joint ventures illegaly

Strategy of DANONE

Background of WAHAHA

1. Development Bottleneck in early 1990s.

2. Policy Support since 1978.

3. Wahaha's great scale before 1996.

Openning up policy

Planned Economy Market Economy

Introducing foreign investment

and technologies

POSITIVE SIGNAL Helping Chinese economy

take off

Beverage Empire

Trademark Transfer

2009: Danone sold its 51% of shares to Wahaha for 300 M €

In China:

• Be well-known
• Trust
• Consumers and market
• Be a part of Chinese culture

To WAHAHA

Chinese Trademark Crisis

Around the world:

• Popularity
• Potential market

Future Strategy→Shopping Mall Plan

• Wahaha plans to respond to the call of the national urbanization in rural areas, construction Wahaha supermarket, the city center was built in the clear positioning of hypermarkets.
• The next five years, Wahaha wants to open 100 European and American boutique shopping mall in China.

Future Strategy→Internationalization Strategy

In the future, pay more attention to international market . Wahaha has developed taste for foreigners to drink.

Future Strategy

1.Taking Nutrition and Health as a center, focus three potential industry :

Danone corporate restructuring carried out in recent years, the production activities focused on the food industry's most dynamic three food: fresh dairy products, health drinks, biscuits and cereal snacks.

2.Get continuing growth in developing countries:

Danone continues to invest in mergers and acquisitions in developing countries, access to development opportunities in developing countries

3.Providing quality services for consumers, continuing innovation

Cooperation with Manchester United

The first shopping mall--WAOW PLAZA

November 29, 2012, in the Wahaha Group APB 25 weeks of celebration that day, Wahaha first European boutique shopping WAOW PLAZA officially opened in Hangzhou Qianjiang New City

This time, cross-industry restructuring, Wahaha's position is: to build a sales platform for the European quality goods into the Chinese market.

January 15, 2013,Wahaha officially became an official partner of Manchester United.

They want to promote Kailey --a functional beverage sales in the world.

WAHAHA vs DANONE: Cats & Dogs

JIANG Tong JIANG Yanliang Pualine DUVAL Karolin WIRTZ

THANK YOU!

CONTENT

1. Introduction

2. WAHAHA Growth

3. DANONE

4. Cooperation

5. JVs

6. Disputes

7. Trademark transfer

8. Strategy of WAHAHA

9. Strategy of DANONE

WAHAHA Group

WAHAHA's main products

Very Cola

Nutrition Express

Rice Pudding

Pure Wanter

WAHAHA Group

Zong Qinghou

November 16, 1945 Born in Jiangsu Suqian.

Wahaha's founder and current Chairman and General Manager of Hangzhou Wahaha Group.

In 2015 to $ 10.3 billion Forbes ranked the richest Chinese in the first 18.

• Hangzhou Wahaha Group Co. Ltd. was established in 1987.
• 29 provinces and cities in the country built 58 bases, more than 150 branches.
• Total assets of 30 billion yuan,
• 30,000 employees