Core Points - Shanghai Wahaha Drinking Water Co., Ltd. has launched a new brand of bottled water called "Hu Xiaowa" due to a trademark dispute with Wahaha Group, which has decided not to renew the trademark usage rights [1] - The conflict escalated when Wahaha Group demanded the transfer of sales rights for bottled water to Honghui Company, controlled by Zong Fuli, and subsequently reported Wahaha Shanghai Water Factory for trademark infringement, leading to a factory shutdown [1][2] - The ownership structure of Wahaha Group complicates the situation, as the major shareholder, Hangzhou City State-owned Assets, does not have absolute control, while Zong Fuli effectively controls decision-making [2] - Zong Fuli's strategy involves abandoning the Wahaha trademark and launching a new brand "Wawa Xiaozong" with a sales target of 30 billion yuan by 2026, which is approximately 80% of Wahaha Group's current scale [3] - The ongoing power struggle and market saturation pose significant challenges for both Zong Fuli and Hangzhou City State-owned Assets, leading to a situation where both parties may suffer losses [3][4] Company and Industry Summary - The trademark dispute highlights the risks associated with shared ownership structures, where unanimous consent is required for brand usage, leading to potential deadlock in decision-making [2][4] - The case serves as a reminder that ownership does not equate to control, emphasizing the importance of aligning control rights with ownership stakes to protect interests [4] - The beverage market's saturation and the negative impact of the ongoing conflict on Wahaha's market reputation could hinder the success of new product launches like "Wawa Xiaozong" [3][4]

Core Viewpoint - The launch of the "Hu Xiao Wa" brand bottled water by Shanghai Wahaha Drinking Water Co., Ltd. is a response to a trademark usage dispute with Wahaha Group, which has decided not to renew the trademark rights, forcing the Shanghai plant to rebrand while continuing its production and sales [1][2]. Group 1: Trademark Dispute - The trademark usage rights for Wahaha have expired for the Shanghai plant, leading to a rebranding to "Hu Xiao Wa" [1]. - Wahaha Group has demanded the Shanghai plant to transfer the sales rights of bottled water to Honghui Company, which is fully controlled by Zong Fuli, and has also requested the cessation of Wahaha trademark usage [2]. - The conflict escalated with Wahaha Group reporting the Shanghai plant for trademark infringement, resulting in a complete shutdown of the plant and disruption of its supply chain [2]. Group 2: Shareholder Dynamics - The current shareholding structure of Wahaha Group requires unanimous consent from all shareholders for trademark usage, creating a situation where any shareholder can veto decisions [3]. - Zong Fuli, holding only 29.4% of the shares, faces challenges in exerting control over the group, while the state-owned shareholder from Hangzhou has expressed disapproval of the trademark dispute handling [2][3]. - The conflicting interests between Zong Fuli and the state-owned shareholder lead to a scenario where both parties are likely to pursue separate paths, resulting in a "zero-sum game" [3]. Group 3: Strategic Responses - Zong Fuli's strategy involves abandoning the Wahaha trademark and launching a new brand "Wawa Zong," with a sales target of 30 billion yuan by 2026, which is approximately 80% of Wahaha Group's current scale [4]. - The state-owned shareholder is left in a passive position as Zong Fuli controls the sales and production system, while the Wahaha trademark lacks alternative monetization routes [4]. - Despite Zong Fuli's proactive stance, the saturated beverage market poses significant challenges for the new brand, and the ongoing shareholder conflict could negatively impact Wahaha's market reputation [4]. Group 4: Lessons on Control and Ownership - The design of the unanimous veto power among shareholders was intended to ensure brand unity and protect collective interests, but it has led to significant conflicts in a deteriorating market environment [5]. - The case illustrates the importance of aligning ownership rights with control rights to safeguard property interests effectively [5].