The 43-year-old snack giant is now navigating a turbulent phase. On August 14, an internal letter from WANT WANT Group sparked widespread discussion. Founder and Chairman Tsai Eng-meng stated clearly in the letter that the company's first-quarter results missed expectations and that it faces a significant operational crisis. He admitted, "We have enjoyed nearly 30 years of good times relying on a few flagship products and failed to innovate or adapt. So when the market underwent drastic changes in recent years, our collaboration methods with distributor clients failed to keep pace, resulting in client attrition and a year-on-year decline in profits from selling WANT WANT products."

Tsai attributed the current difficulties to "complacency over the past few years and a failure to take corrective measures in a timely manner," stressing that employees who do not produce output or results will be phased out. The veteran retailer, founded in 1983 and listed on the Hong Kong Stock Exchange in 2008, is now facing serious scrutiny. In public discourse, topics like "WANT WANT Group faces major operational crisis" and "WANT WANT products are hard to sell" quickly climbed the hot search rankings. On the capital markets front, WANT WANT CHINA's closing price as of the publication date has fallen 29.8% from the start of the year, with an average daily turnover rate of just about 0.08% this year. The company's latest market capitalization stands at HK$37.02 billion, down 78.5% from its 2014 peak.

Where the trouble began

The impact of WANT WANT's struggles is clearly reflected in its financial reports. According to the profit warning announcement, for the three months ending June 30, 2026, the group's total revenue fell approximately 6% year-on-year, while net profit plunged 38% compared to the same period in fiscal 2025. The company explained that, on one hand, traditional wholesale channels were negatively affected by terminal sales pace, resulting in a double-digit decline in revenue. On the other hand, the establishment of business units for each product category, along with new channels and new products, led to higher marketing investments and personnel costs, with operating expenses growing at a high single-digit rate.

Pressure on both revenue and costs had already emerged in fiscal 2025. According to financial disclosures, from April 1, 2025 to March 31, 2026, although WANT WANT's total revenue reached a new high since 2019, up 3.8% year-on-year to RMB 24.401 billion, this was mainly driven by roughly 10.4% growth in leisure foods such as candies and ice cream. Meanwhile, dairy products and beverages, which have long supported half of the company's performance, saw only a modest 1.5% revenue increase, with the flagship product Hot Kid (Wangzai) Milk actually declining 0.3%. Sales of rice crackers and rice senbei also slowed from mid-single-digit growth in fiscal 2024 to low single digits, with revenue roughly flat compared to fiscal 2024.

In terms of channels, snack discounters maintained rapid growth, with revenue share rising from 10% in fiscal 2024 to 15% of total revenue. Revenue from emerging channels, including mainstream e-commerce, content e-commerce, social e-commerce, and livestream e-commerce, also reached low double-digit percentages. However, WANT WANT's foundation remains the traditional wholesale channel, which accounted for about 70% of revenue during the reporting period but contracted for the second consecutive fiscal year. In other words, purchasing willingness among the company's over 10,000 offline distributors has weakened significantly.

Public reports indicate that sales of once-popular products like Hot Kid Milk and WANT WANT Senbei continue to soften. Compounded by the fact that retail prices for online direct sales and snack discounter products are now close to or below the procurement costs of some wholesale channels, distributors are left with almost no profit margins. They also face pressure from headquarters to stock up on inventory, bearing the burden of stockpiles. While classic products struggle to sell and distributors are reluctant to place orders, the costs of promoting new products and distributing through new channels remain high.

In fiscal 2025, the company established business units by product category internally, adding corresponding headcount, which drove administrative expenses up 11.4% year-on-year. To enhance awareness and acceptance among different consumer groups, as well as visibility and recognition in various market types and trend cultures, WANT WANT frequently carried out cross-industry collaborations and marketing activities. Advertising and promotional expenses rose from 2.7% of total revenue in fiscal 2024 to 3.8%, while distribution costs increased 16.9% year-on-year. During the reporting period, these two expense items together approached RMB 7 billion, accounting for about 61.0% of gross profit for the period, up 12 percentage points from fiscal 2024, dragging net profit down 11.5% year-on-year.

Meanwhile, new products are far from standing on their own, and sub-brands have yet to capture consumer mindshare. According to incomplete statistics, WANT WANT has at least eight sub-brands under its umbrella, including spicy snack brand Mr. Hot, rice snack brand Got Rice, low-alcohol ready-to-drink cocktail brand Sawa, infant and toddler food brand Beibi Mama, youthful innovative beverage brand Bond, health and nutrition brand Fix x Body, women's brand Queen Alice, and middle-aged and elderly health nutrition brand Ai Zhizun, covering multiple niche categories and consumer groups. However, the fiscal 2025 earnings report shows that revenue from products launched within the past five years combined accounts for a mid-teens percentage, while revenue from new dairy and beverage products is only a mid-single-digit percentage of Hot Kid Milk revenue.

When it comes to WANT WANT, consumers still immediately think of Hot Kid Milk, WANT WANT Senbei, and QQ candies. Unfortunately, this brand recognition is increasingly difficult to convert into actual consumption. As Gen Z consumers become the mainstream, the consumption logic of blockbuster products is gradually collapsing. Market demand is shifting from standardized, large-scale mass consumption toward more personalized, niche-focused precision consumption. Industry data shows that the average cycle for a beverage new product from launch to fading popularity has shortened from 18-24 months five years ago to 6-9 months in 2025, while the iteration cycle for viral snack products has dropped to as low as 2 months. The days of relying on a single hit product are over. Consumer brands in a stagnant market must now wear the "red dancing shoes," constantly chasing the next breakout product.

Layoffs and internal reviews take center stage

As the first step in its self-rescue efforts, WANT WANT has chosen to cut jobs. Public reports show that WANT WANT Group has recently initiated layoffs, with a target of approximately 1,000 employees. About 400 have been laid off so far, with some departments seeing an optimization ratio of up to 8%. Supervisors are encouraging employees to resign voluntarily, and local factories are prioritizing the removal of hourly workers. Additionally, the company has required all headquarters staff to conduct reviews based on facts and data, reflecting on their actual work results over the past year. These self-assessment reports are scored item by item by direct supervisors and second-level supervisors, while top management is excluded from the process. Many employees worry that these written self-assessments could later serve as references for job transfers, salary cuts, or even layoffs, putting them at a disadvantage.

Interestingly, despite lower profits despite higher revenue in fiscal 2025 and a nearly 40% drop in first-quarter net profit in fiscal 2026, WANT WANT remains generous with dividends. According to announcements, for the year ending March 31, 2026, the company plans to distribute a dividend of US$0.0138 per share, equivalent to HK$0.11. Based on the total share capital at period end, the total cash dividend for this round is approximately HK$1.27 billion, or about RMB 1.099 billion, representing 29.2% of net profit for the period. Looking at historical dividend data, WANT WANT's average net profit over the past three years was approximately RMB 4.054 billion, while cumulative cash dividends approached RMB 5.6 billion, resulting in a payout ratio as high as 138.0%.

As a typical family enterprise, Tsai Eng-meng directly or indirectly holds 53.5589% of the company's shares, while his sons Tsai Shao-chung and Tsai Wang-chia hold 26.0032% and 25.9926% respectively through family trust funds. Together, the three Tsai family members hold more than 55% of the company's equity through entities such as Full Confidence Company Ltd., Want Power Holdings Limited, Top Quality Group Limited, Twitcher Limited, and ThemePark Dome Limited. This means that in the latest dividend round, approximately RMB 608 million flowed to the Tsai family, and cumulative cash dividends over the past three years reached RMB 3.092 billion.

On one hand, the company is tightening its belt through cost reduction and efficiency measures; on the other, wealth is being concentrated into the pockets of the founding family. This striking contrast not only tests internal morale but also quietly erodes market confidence in the brand's long-term value. To truly "get to the root of the problem," WANT WANT needs more than just patching up its channels and products. It requires a deeper transformation that spans organizational culture and mechanisms, as well as the logic of benefit distribution.