Can a Math‑Modeling Co‑Brand with WangWang Solve Its Growth Crisis?

What crisis does WangWang face?

WangWang chairman Cai Yanming labeled the Q1 2026 revenue shortfall a “major operational crisis.” He admitted the company has relied on a few core products for three decades, while product innovation and distributor collaboration have lagged behind market changes. The most quoted line from his internal letter is: “Those without output or merit will be eliminated.”

Financially, FY2025 revenue reached CNY 244.01 billion (+3.8% YoY) but net profit fell 11.5%. In Q1 2026, revenue declined about 6% YoY and net profit dropped roughly 38%. Traditional wholesale channels, which account for over half of revenue, suffered double‑digit declines while operating expenses continued to rise.

Profit can be expressed simply as:

Profit = Sales revenue – Product cost – Channel cost – Organization cost

The downturn is not due to a sudden drop in product demand; multiple variables have deteriorated simultaneously: shrinking traditional channels, rising raw‑material prices, division reforms, new‑product promotion, and new‑channel development all increase costs. Old business is declining, transformation investment is rising, and new business has not yet generated sufficient profit.

Cash flow is not the immediate threat—by the end of March 2026, net cash stood at about CNY 132 billion, enough to generate nearly CNY 40 billion annually. The “major operational crisis” is more accurately a crisis of growth model and channel structure.

Visible costs are the easiest to cut

The author references his own math‑modeling popular‑science book, where a high‑school student sees dozens of unsold chicken legs being discarded—a visible waste. A statistics student points out that insufficient stock leads to lost sales that never appear in daily reports. Similarly, WangWang can readily trim visible costs such as wages, travel, and promotion expenses, but hidden losses—product aging, missed bulk‑snack opportunities, e‑commerce channel shifts, and reduced distributor margins—are harder to quantify and may far exceed the savings from a few layoffs.

How to define “no contribution”?

Employee output can be roughly modeled as:

Employee output = Personal effort + Job resources + Management decisions + Team collaboration + Market environment

A salesperson’s effort is futile if the product loses competitiveness; channel staff may appear unproductive when the entire channel contracts. Conversely, some departments may enjoy performance simply from brand and channel legacy benefits.

Ideally, contribution compares outcomes with and without the individual, but parallel worlds are impossible, so estimates rely on historical data, comparable roles, and controlled conditions. Equating final sales directly to personal contribution ignores many variables.

Responsibility should match decision‑making authority: frontline staff are accountable for execution, middle managers for resource allocation, and senior leaders for product direction, channel strategy, and organizational structure. Do not let those with the least decision power bear the greatest operational responsibility.

What WangWang lacks is a new purchase reason

Some claim the problem is overly sweet products, but FY2025 snack‑food revenue grew 10.4% and candy sales hit a historic high, indicating consumers are not abandoning sweet snacks; rather, purchase channels, scenarios, and motivations have shifted.

While WangWang has launched new products accounting for a double‑digit share of total revenue and expanded e‑commerce, OEM, and bulk‑snack channels, none have become a second flagship comparable to Wangzai milk. New channels cannot fully offset the decline of traditional wholesale.

Thus, the need is not merely another flavor or low‑sugar variant, but a fresh reason for today’s youth to buy WangWang.

A co‑branding concept

The author proposes a modest co‑branding experiment between WangWang and the book “Mathematics, Just a Pack of Fries Away.” The book follows a high‑school student working part‑time at a fast‑food outlet, covering demand forecasting, inventory decisions, store location, delivery routing, scheduling, queuing, pricing, and network planning—issues directly relevant to a food company.

Instead of merely printing the book title on packaging, the idea is to create a “WangWang Math Modeling Lab”: consumers scan a QR code on the package to help predict daily sales of a convenience‑store Wangzai milk, calculate optimal snack inventory, or design shorter distributor routes. Participants engage in a real‑world modeling challenge.

This would not instantly create a billion‑yuan product, but it could low‑costly validate a new brand relationship—transforming WangWang from “a nostalgic snack” to “a brand that today’s youth still want to engage with.” It also opens entry points in campuses, bookstores, and parent‑child reading scenes, showing that mathematics underlies the entire journey from factory to shelf.

What should WangWang eliminate?

WangWang can of course cut staff who truly do not fit their roles and remove ineffective expenses, but focusing solely on “employees must work harder” only addresses the most visible line‑item on the profit statement.

The deeper eliminations should target path dependence on old channels, assessment systems that look only at sales outcomes without considering decision conditions, and a responsibility structure that continuously pushes strategic problems down to the grassroots.

Removing a few people may improve the next quarter’s cost base, but rediscovering a compelling purchase reason for consumers will determine the brand’s trajectory over the next decade.

Do not merely persuade young people to repurchase a childhood snack; give them a new reason to recognize WangWang today.

Finally, the author poses a multiple‑choice question: If you were a decision‑maker at WangWang, which account should be clarified first? A. Product innovation B. Sales channels C. Organizational efficiency D. Distributor profit E. Other.