Out of control Tongrentang, can it hold up the "hundred-year-old mansion door"?

Can the Tongrentang that is out of control hold up the "hundred-year-old mansion door"?

A butterfly flapping its wings in Brazil can lead to a tornado in Texas one month later. A drop of honey made by a small bee will eventually cost a century-old shop a huge price.

In the evening of December 15, 2018, Jiangsu TV revealed that Yancheng Golden Bee Food Technology Co., Ltd. hereinafter referred to as Yancheng Golden Bee had illegal operations in the production process and recovered a large number of expired and temporary honey. The surface publicity was "retirement.""In fact, feeding bees to beekeepers" is actually sent to the raw material warehouse. At the same time, according to law enforcement officials, in October 2018, the company also changed the production date of honey and prolonged the "life" of the product illegally.

Yancheng Golden Bee is one of the producers of Beijing Tongrentang Bee Industry Co., Ltd. On the morning of December 16, 2018, Tongrentang Bee Industry issued an apology statement urgently, claiming that it has the responsibility for poor supervision and serious oversight, and has notified Yancheng GoldBee was suspended from its entrusted processing and production activities during the investigation.

However, an apology clearly cannot erase such a big stain. After the incident broke out, the stock price of Tongrentang, the parent company of Tongrentang Bee Industry, was implicated. From the opening on December 17, 2018 to the closing on December 19, 2018,Tongrentang's market value evaporated 1.248 billion yuan in 3 days.

formerly "Legend"

"Xipi Jingyun Erguotou, Tongrentang outside the front gate building", this is an old Beijing saying that has been circulating for many years, saying that Tongrentang's place in the life of Beijingers.

From a small drug store to the world-renowned “Chinese Time-honored Brand”, Tongrentang has come along with the word “Integrity”. In 1989, the State Administration for Industry and Commerce awarded Tongrentang the title of the nation ’s first “China Well-known Trademark.”"Although it is difficult to save labor, it is expensive to taste, but it is not to reduce material resources" is its motto.

Beijing Tongrentang was formerly known as Beijing Tongrentang Lejia Shop, and its birthplace was No. 24 Dashilan outside the front door of Beijing. Le Xian of the Le Family was founded in the eighth year of the Qing Emperor Kangxi 1669 and founded the Tongrentang Pharmacy.The connotation of the two characters "gong and elegant", Le Xianyang made it a custom name. Since the Yongzheng period, Tongrentang worshipped the royal medicine, and it has passed through eight generations of the emperor for 188 years.In the spirit of hundreds of years.

After the founding of New China, Tongrentang responded to the government's call and took the lead in realizing public-private partnerships. In 1957, Tongrentang Chinese Medicine Refinery was officially established. In 1992, Tongrentang formed a group company. In July 1997, Tongrentang was listed on the Shanghai Stock Exchange, which marked thatTongrentang has taken an important step in the process of transforming itself into a modern enterprise. Three years later, Beijing Tongrentang Technology Development Co., Ltd. was listed on the Hong Kong Start-up Edition. In July 2001, Beijing Tongrentang Group Co., Ltd. authorized by the Beijing Municipal GovernmentThe company was officially unveiled, and Tongrentang realized the transformation of a standardized modern corporate system. Through the above series of steps, Tongrentang has solved the problems that restrict the old and established enterprises and become a modern enterprise in a complete sense.

From the pharmacy to the "company", Tongrentang has done a lot of things with "bones" and is worthy of its own "signboard". The Palace Museum still has the medicines produced by Tongrentang at the end of the Qing Dynasty. These pills, which have been used for hundreds of years, are still bright in color,The medicinal fragrance is strong and the efficacy is not diminished.

In 1957, just after the Tongrentang Refinery was established, it successfully trial-produced artificial bezoar, completely replacing natural bezoar, greatly reducing costs, and was welcomed by the people. Tiger bone wine is a good medicine for rheumatism, and it is also an ancient medicine of Tongrentang.When China joined the International Convention for the Protection of Wild Animals, Tongrentang also found that there is a plateau zokor on the Qinghai Plateau. Its bones not only prevent and treat arthritis obviously, but also can relieve pain and promote fracture healing, and enhance the body's resistance to fatigue and resistance.Frostbite, its efficacy is equivalent to that of tiger bone. This is also the first new animal medicine in China.

In 1995, the demand for Tongrentang Hemiplegia Recovery Pills increased sharply, and medicine-drawn cars lined up at the entrance of the workshop. This abnormal phenomenon caused the alert of Jin Renying, deputy director of Tongrentang Pharmaceutical Factory at the time. She found after the investigation, It turned out that some dealers hyped the effect of Hemiplegic Recovery Pills in the media, claiming "to treat all hemiplegia, just eat it and never relapse."

"Doing so will destroy Tongrentang's credibility." Kim Min-young ’s proposal to reverse this phenomenon was supported by the group company. The company held a press conference to expose false advertisements and issued a statement calling for symptomatic use of hemiplegia recovery pills.In addition, Tong Ren Tang also organized an expert consultation to introduce the knowledge of stroke and reasonable medication, and broadcast it live on TV. After a year of hard work, the sales volume of Hemiplegic Recovery Pills declined. Jin Yiying said: "My heart alsoSure. "

During the SARS period in 2003, although the purchase price of raw materials and medicines has soared exponentially, Tongrentang insisted on no price increases and non-stop sales. In the meantime, 61 stores in Tongrentang met 1/3 of Beijing's anti-SARS drugs and sold 1.98 million servings.Decoction pieces and more than 1 million bottles of decoction, lost 6 million yuan.

Coincidentally. In 2006, the seawater was flooded in Macau, resulting in a "salty tide period" of up to 4 months. All tap water was salty and could not be drunk at all. The prices of mineral water and pure water were soaring and often sold out. Tongrentang, MacauIn order to not affect the drug effect, the shop decided to switch to pure water decoction, and the cost of the medicine did not increase. An old customer said, "Because of the salty tide, the restaurant's tea prices have risen. Drink it.The fried medicine has the same taste as before. It is really reassuring. It is indeed an old name. "

Expansion pain, no cure?

Tongrentang has become a brand trusted by the public, and it has gone through hundreds of years of sedimentation, but if you don't care about your feathers, it will only take a night to destroy it.

In September 2001, a survey on the whereabouts of private purchases of medicines in Beijing showed that Tongrentang, with a history of more than 300 years, topped the list of Beijing pharmacies with absolute advantages and was the best pharmacy in Beijing.

Today, Tongrentang has grown into a giant in the Chinese medicine industry, with two domestic and overseas listed companies, more than 800 retail stores, and 28 overseas joint ventures stores in 15 countries and regions. But quietly, TongrentangChanged the taste.

This outdated honey incident is not an example. In recent years, Tongrentang has been repeatedly notified by local food and drug supervision departments for product quality issues. "Chinese medicine quality" can be said to be the most serious problem of Tongrentang. There is no one. The latest qualityThe problem is that in November 2018, CCTV reported that, in the results of the 11th Chinese medicine decoction quality sampling results released by the Shandong Provincial Drug Administration in 2018, 53 batches of Chinese medicine decoctions produced by Beijing Tongrentang Yuzhou Decoction Pieces Co., Ltd.Shows disqualified. According to public information, Tongrentang Yinzhou Decoction Pieces Co., Ltd. is a subsidiary of Beijing Tongrentang Medicinal Materials Co., Ltd., and is the only Chinese medicine decoction piece manufacturer in Beijing. The main business is Chinese medicine decoction pieces and Chinese medicine health products.

In the 2017 Topl0 list of the “Black List” of the Food and Drug Administration of China, Tongrentang ranked second with 15 “scores.” As early as January 2013, Beijing Tongrentang President ’s broken bee pollen tablets were exposed.Illegal addition of mannitol as a pharmaceutical ingredient.

Hong Kong Food and Environmental Hygiene Department announced that Tongrentang's Jianwuwubu Chinese patent medicine has a mercury content about 5 times higher than the standard. Since then, there have been reports from the media that the bezoar Qianjinsan produced by Tongrentang has a cinnabar content of 17.3%, exceedingIt meets national standards, and the main ingredient of cinnabar is mercury sulfide, which has been proven to contain highly toxic substances. On August 21, 2018, the UK Medicines and Health Products Administration issued a warning on Chinese medicine, saying that products such as Tongrentang Niuhuang Jiedu Tablets contain a large amount ofArsenic is what we commonly call "arsenic."

In addition, Tongrentang's nationwide chain pharmacies have been notified as "sources of inspections" 10 times. For example, the content of Guanxin Qiwei Tablets sold by Beijing Tongrentang Chain Pharmacy Co., Ltd. was unsatisfactory.

Why did Tongrentang, which used to be of the highest quality, become a frequent guest on the "black list"? Maybe it was the fault of expansion.

Tongrentang is no longer a single Chinese patent medicine production and sales company. Its business scope has expanded significantly. It has become a six-tier group, three hospitals, and two reserve units, integrating modern pharmaceutical industry, retail business, and medical service.A large Chinese medicine group with a large sector and three listed companies. Wind data shows that Tongrentang currently owns or holds 167 companies, of which 163 have consolidated statements with them.

The brand is expanding rapidly, and the OEM model is naturally introduced. In recent years, the main subject of Tongrentang ’s quality problems has been its subsidiaries. The protagonist of this outdated honey incident is Tongrentang Bee Industry, which is Tongrentang.The company invests in its subsidiaries, and Yancheng Golden Bee is its foundry.

In order to reduce costs, many well-known brands now choose OEM production methods, which is a normal behavior of the market economy. However, it should be noted that "OEM" cannot completely "responsibility".

Tongrentang ’s huge brand matrix is ​​seen by Qu Shiyin, Haitong Securities' Shanghai Institutional Director, as a manifestation of its brand operation capabilities, but with it comes the hidden dangers of quality control. “Tongrentang is a company with a major brand valueHigh, so the foundry form is used in the non-core business part, but the quality control of the foundry has not kept up. This is actually a common problem. Previously, McDonald's and KFC suppliers had quality problems. "

China Food Industry Analyst Zhu Danpeng said in an interview with the media that the construction of the product quality internal control system has not kept pace with the expansion of the enterprise, which is the root cause of the outbreak of the honey incident. "Tongrentang has a joint role in this honey incident.Responsibility, because of its large flaws in the entire top-level design, management span and quality internal control system. "

Tongrentang mask to find out?

In fact, honey is just one example of Tongrentang's diversified products. According to Tongrentang's official website, in the past 20 years, Tongrentang has developed 679 new products, including 176 medicines, 92 health foods, 288 foods, and 123 cosmetics. Among them,The latter three together account for 74.07% of newly developed products, which may mean that Tongrentang is expanding rapidly.

In March 2016, Tongrentang entered the FMCG market and launched two tea beverages—Tongrentang Herbal Tea and Maca Oolong Tea, which reportedly signed 300 million yuan a day. On the shelves of Tongrentang Pharmacy, you can see these twoHerbal tea.

A person related to Tongrentang Health said that Tongrentang Health's previous products were mainly high-end products, including bird's nest and cordyceps, etc. However, due to the restriction of "San Gong Consumption", the company's high-end consumer business was limited, so it began to deploy.Some FMCG products are affordable for ordinary consumers. Although Tong Ren Tang is trying to launch some more affordable products, the price is still "unfriendly". The price of a 310 ml Tong Ren Tang brand herbal tea is 5.50 yuan per can.The price of the other two herbal teas in the same package is only 3-4 yuan per can.

Tongrentang herbal tea belongs to Tongrentang Health, not a listed company. This is also Tongrentang's development strategy. The main business of listed companies is still pharmaceutical production and sales, and try to diversify with the help of subsidiaries.

At present, Tongrentang's subsidiaries include Tongrentang Technology, Tongrentang Commercial, Tongrentang Natural Medicine, Tongrentang Jilin Ginseng, Tongrentang Lingchuan Codonopsis, Tongrentang Inner Mongolia Traditional Chinese Medicine, Tongrentang Bee Farming, Tongrentang Anguo Processing, Tongrentang Anguo Logistics, Tongrentang Shaanxi Musk Industry, Tongrentang Shanxi Vinegar and other subsidiaries.

Tongrentang Technology is mainly engaged in the production and sales of traditional Chinese medicine products. Its products cover Chinese patent medicine, food, cosmetics and other fields. Tongrentang holds 46.85% of shares. In 2017, this subsidiary achieved 5.025 billion yuan in operating income, a year-on-year increase of 7.71.%, Net profit was 969 million yuan, a year-on-year increase of 13.97%.

In addition, Tongrentang also holds a stake in Beijing Tongrentang Cosmetics Co., Ltd. You can see on the official website of Beijing Tongrentang that Tongrentang cosmetics has a total of more than a dozen series, and also has flagship stores in Jingdong and Taobao. There are also people on Xiaohongshu"Amway" Tongrentang mask product.

However, Tongrentang ’s medicinal makeup has always been tepid, which is related to its original strategy. Tongrentang has been involved in the cosmeceutical market since 2001. As a traditional old store, Tongrentang is not short of mysterious formulas, including beauty formulas passed down from the court.At that time, Tongrentang had two choices: to make original ecological traditional Chinese medicine cosmetics or to extract certain types of ingredients from Chinese medicinal materials for research and development. The former was expensive and not easy to save, and was mainly targeted at the high-end market. The latter was cheap and safe. Tongrentang chose the latter.Therefore, they are caught in the low-end market and compete with brands such as Dabao and Longliqi.

In addition, Tongrentang also does investment management. Beijing Tongrentang Commercial Investment Group Co., Ltd. has a registered capital of 208 million yuan, of which Tongrentang accounts for 51.98%. This company's main business includes investment management. In 2017, the company achieved revenue of 6.922 billion yuan.Yuan, a year-on-year increase of 16.67%, net profit of 298 million yuan, a year-on-year increase of 11.28%.

In addition, the business scope of Tongrentang listed companies also includes renting office space and commercial space; the branch's business scope includes sales of stereotyped packaged foods including dairy cold foods, health foods, retail Chinese medicine tablets, books,Manufacture of liquor, health wine, nutrient solution nutrition solution without medicinal effect, technical consultation, technical service, technology development, technology transfer, technical training; breeding and planting of medicinal animals and plants, design of Chinese and western medicine advertising, breeding sika deerAnd black-bone chicken.

Currently, listed companies including Jiangzhong Pharmaceutical, Dong'e Ejiao, etc. have laid out large health consumption areas. Jiangzhong Pharmaceutical's layout in the large health area has attracted market attention. In addition to monkey mushroom biscuits, the company's first half of 2015 annual reportAccording to the disclosure, research on new products and technologies is also being carried out, research and development of major new products such as bird's nest beverages, and process improvement of sugar-free digestive tablets are completed.

"From the perspective of enterprises to increase profits, it is understandable to do so", a pharmaceutical industry analyst said, "For some pharmaceutical companies, when the main business is under pressure, some new product lines need to be added,To ease performance pressure. "

Don't go to the end, only a brand is left

Once upon a time, the label on Tongrentang was "both respect the tradition and not be bound by the tradition; it is bold and innovative, but also not apostate."

Even in the "cold" capital market, Tongrentang is a rare "conscience" company. Wind statistics show that since its listing in 1997, Tongrentang has raised 4 financings in total, including an initial public offering of 354 million yuan.In 2001 and 2004, shares were allocated at the price of 11 yuan, and the financing amount was 220 million yuan and 330 million yuan, respectively. In addition, a convertible bond was issued in 2012, and the amount of raised funds was 1.2 billion yuan.

Compared with the accumulated financing amount of 2.1 billion yuan over the past 20 years of listing, Tongrentang has maintained the tradition of cash dividends each year. So far, it has implemented 21 cash dividends and the dividend amount is close to 3.3 billion yuan. This means that the companyThe total amount of cash dividends since listing has exceeded the total amount of financing since listing. The dividend rate of more than 36% is even higher than the 30% dividend ratio proposed in the "Guide to Cash Dividends for Listed Companies" issued by the regulator.early.

It is not difficult to find from Tongrentang's capital moves that Tongrentang aims to create a diversified and full industrial chain development path through mergers and acquisitions.

With the 80s and 90s growing into the new middle-class consumer group, the older generation of consumers gradually withdrew from the main consumer market. This group of people has undergone huge changes in product cognition and consumption habits. The decline in cognition of traditional Chinese medicine has made traditional Chinese medicineIt is very likely that the mainstream consumer's vision will gradually fade away; and after the traditional health care product market has peaked, its attractiveness to the market will also gradually weaken.

Tongrentang is facing the inevitable road of business shrinking and diversification. However, in the face of frequently exposed product quality problems, excessive general use of brands has become a "difficult" problem.

At present, Tongrentang has clearly shown signs of weak growth. From the perspective of profitability, the company's revenue in the first three quarters of 2018 was 10.477 billion yuan, a year-on-year increase of 7.09%; net profit was 850 million, a year-on-year increase of 3.72%;The growth rate of net profit has gradually decreased from 30% in 2012 to the current single-digit growth rate. Looking at the time, the company's average net interest rate over the past five years has been only 11.33%, which is a certain gap from the average profit rate of the industry of 15%..

In the 2017 annual report, the gross profit margin of Tongrentang's two main types of business both declined. The gross profit margin of the pharmaceutical industry decreased by 0.36 percentage points year-on-year, and the gross profit margin of the pharmaceutical business decreased by 0.04 percentage points year-on-year. Compared with the decline in performance growth,, Is the company's current price-earnings ratio of up to 35 times, according to choice statistics, the current pharmaceutical industry's average price-earnings ratio is only 17 times.

Coincides with the bear market, the "tough" period of pharmaceutical stocks is obvious to all, a large number of pharmaceutical stocks have plummeted, but Tongrentang's stock price is still firm, which may also be the market's trust in this century-old brand; only, when the subsidiaries frequentlyThe product quality problem was revealed, and the poor performance growth was superimposed. How long can this trust be maintained? A big question mark must be placed.

Not only Tongrentang, many established companies face similar problems. With the increasingly fierce market competition, some old problems of the established brands have not been completely solved, but they have encountered new problems. Insufficient innovation ability, conservative marketing concepts,Low marketing level, aging staff, brain drain ... According to statistics, the number of time-honored companies has decreased from about 16,000 at the beginning of liberation to the current 1,128, and more than 90% of the time-honored companies have become memories. Among the existing time-honored companies, 20% Long-term losses, 70% sluggish development, only 10% of a certain scale and good economic benefits, most of the poor business conditions. Some of the oldest brands are the only ones left proud of the old gold signboard.

For consumers, when the same product quality is similar, the reason why they prefer old-fashioned brands is the only factor is emotion, which is accompanied by emotional consumption in the process of consuming old-fashioned products. However, once the quality problems of old-fashioned brands appear,Even conscious counterfeiting will inevitably cause emotional harm to consumers, and to be “reconciled as before”, old brands need to pay a huge price. If you do n’t see this, the century-old brand may become dead and not dead..

How does the old name bloom new vitality? On the basis of sticking to the lifeline of quality, we must continue to improve our own innovation and make young people like it.

Alibaba Research Institute has been researching the time-honored brands since 2014. At present, Baihua honey has a market share of more than 40% in the Tmall supermarket Hong Kong station.Flowers bloom, making the brand hot; National Hand Cream "Mejiajing" and Big White Rabbit jointly launched a toffee-flavored lip balm, setting off waves of memory killing ...

People's consumption patterns are changing. How to find consumption concepts and methods that both retain the elderly and adapt to the young, this requires innovative development ideas, changes in sales methods and product research and development, and adapts to the needs of the new era.The mixed change, the mixed change, this cross-border cross-border, allows the "old-time" enterprises passed down from the ancestors to take the lead in the times.

Of course, the most important thing is to ensure the high quality of the product.

Zhou Qian recommended from "See the World"

Author: Anonymous

Source: "East, West, South, North"

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