The outstanding Chinese time-honored enterprises represented by Tong Ren Tang represent the essence and soul of China's commerce. Such brands have become so precious that their image in consumers' minds should not be changed. But they are now entering the sensitive direct selling industry because their performance has fallen sharply and they want to regain market share. However, some people in the industry believe that "Tong Ren Tang has no experience in this field", which is doomed that Tong Ren Tang's direct selling is only an experiment.
Time-honored brands participating in direct selling
Beijing Tongrentang (Group) Co., Ltd. is a well-known time-honored brand in Chinese medicine industry. Founded in 1669 (the eighth year of Emperor Kangxi in Qing Dynasty), it devoted itself to imperial doctors from 1723, and experienced eight emperors 188. In the course of more than 300 years, Tongrentang people have always adhered to the old adage that "although the processing is complicated, they will not dare to save labor, and although the taste is expensive, they will not dare to reduce materials", and have established the self-discipline consciousness of "no one knows everything", which has created the rigorous spirit of meticulous and Excellence in the pharmaceutical process. Its products are famous at home and abroad for their unique formula, excellent materials, exquisite technology and remarkable curative effect.
Today, Tongrentang has decided to enter the direct sales plan. According to sources close to Tongrentang, in order to prepare for entering the direct selling industry, Tongrentang Group set up a special health department years ago and appointed a special person in charge. "The final plan has not yet been worked out, and the top management is still considering it further."
"Tong Ren Tang also wants to do direct sales", which is really surprising. In this regard, Jin Yongnian, director of the propaganda department of Tongrentang Group, told the media that at present, he has not been authorized by the leaders to disclose information outside the report, and he is operating a subsidiary listed company there. The details are not clear. Other leaders of Tongrentang Group also kept a low profile to the outside world and did not disclose more information.
The reporter learned that Tongrentang Group plans to set foot in the direct selling industry, which mainly focuses on drugs and health care products. As early as 2004, Beijing Tongrentang Group formed a strategic partnership with Hong Kong Weique Bio. A series of new health care drugs developed by Weique Bio used Tongrentang brand and were sold in Tongrentang stores nationwide.
According to relevant sources, Tong Ren Tang also contacted relevant officials of the Ministry of Commerce, and the Ministry of Commerce welcomed Tong Ren Tang. "At present, the domestic direct selling industry lacks benchmarking enterprises." Mei Xinyu, a research institute of the Ministry of Commerce, said that if Tong Ren Tang enters direct selling, it will not only enrich the varieties of direct selling, but also set a benchmark. "The government will welcome it."
According to the article of Guodu Securities Research Institute, Tongrentang Group's involvement in the direct selling industry will not only help the group to improve its own performance and find new profit model and marketing model, but also provide relevant experience for the company's marketing reform and provide strong support for further enhancing the brand awareness of Tongrentang.
However, some people are worried about this. In the past two years, in order to standardize and rectify this industry, the state has successively promulgated the Regulations on Direct Selling Management and the Regulations on Prohibiting MLM, and the issuance of direct selling licenses is also cautious. Up to now, some enterprises have failed to obtain direct sales licenses, while some enterprises have obtained licenses and their licenses have been revoked due to violations. Even a licensed enterprise does not necessarily operate according to law, let alone an enterprise that has not obtained a license. Whether it is true or not, whether it is fact or manipulation, there are still many problems in the direct selling industry, and it is impossible to get rid of the shadow of honesty.
An expert who asked not to be named said that the direct selling industry is burdened with too many problems and a different vision from society. At least, it is incompatible with a century-old brand that operates in good faith. Tongrentang Group set foot in the direct selling industry. "It may also lead to the weakening or even loss of the original brand. I can only say that I will try it first. "
Looking for a new profit model
Does Tongrentang's involvement in direct selling really have an impact on its own brands? It's too early to answer. However, "commodity economy can not be separated from marketing, and which model enterprises are suitable for needs to be decided according to their own conditions." An industry insider judged.
In the past two years, Tong Ren Tang has made great efforts in the marketing model. The first round of marketing reform measures implemented at the end of 2005: the core idea is to clean up 10% of non-core distributors and adjust five regional branches into four product branches. And highlight the responsibility of variety show, and tailor the promotion plan for each product. However, due to the lack of good connection between mode conversion, this reform has had a negative impact on Tongrentang's product sales, leading to a decline in Tongrentang's product sales. With such a frequent decline in sales volume, it is not surprising that Tongrentang is involved in direct selling that is favored by the public and can save costs.
According to public information, Tongrentang's main business income in 2006 was 2.397 billion yuan, down 8.03% year-on-year. Realized a total profit of 290 million yuan, a year-on-year decrease of 37.20%; Realized a net profit of 654.38+0.56 billion yuan, a year-on-year decrease of 48,265.438+0%; The return on net assets was 6.5 1%, which was 6.3 1 percentage point lower than that in 2005.
Wang Bin, an analyst of Industrial Securities Pharmaceutical Edition, told reporters that the performance of Tong Ren Tang has fallen sharply. Last year, the company's net profit decreased by 48.2 1% year-on-year, mainly because the equity incentive mechanism was not established. Wang Bin said that if you enter the direct selling business, "Tong Ren Tang has no experience in this field". But "if direct selling can be incorporated into the new marketing reform, it will be beneficial to the whole group." An analyst at Huatai Securities said.
Mei Qun, general manager of Tongrentang Group, said in a recent medical article that in recent years, Tongrentang has continuously strengthened the development and management of domestic and foreign markets, and its products have been sold to more than 40 countries and regions around the world. In 2005, Tongrentang's sales revenue reached 5.4 billion yuan, and its export earned 20.4824 million US dollars, ranking first in the Chinese medicine industry.
The reporter learned that Tongrentang focused on its main business, insisted on quality first, innovated corporate culture, standardized brand management, and constantly strengthened national brand building. At present, the pharmaceutical industry, retail business and medical service are interdependent and complementary. The production line has 4 1, which can produce 26 dosage forms, 1, and more than 1,000 products.
At the same time, Tongrentang has been accelerating the layout of the international market. The reporter learned from the overseas office of Beijing Tongrentang Group that Beijing Tongrentang has opened more than 20 branches and pharmacies overseas. Ding Yongling, general manager of Beijing Tongrentang International Co., Ltd. said that Tongrentang will devote more energy to developing the EU market, North America market and Australia market.
"It should be said that enterprises like Tong Ren Tang have fully met the conditions for entering direct sales. It has products, many stores of its own, and it is doing well, and it also has franchise business. " Liu Zhong, a direct selling expert, said that a group enterprise like Tong Ren Tang would be more mature in sales if it set foot in the direct selling business. "Entering direct sales is a brand-new marketing model for Tongrentang, which will bring it new profit points."
The health cause of Tongrentang
Walking into any Tong Ren Tang drugstore, you can feel its emphasis on historical inheritance from many nuances. If you pay a little attention, you can see that the counter of Tongrentang has two floors: the dispenser is at the counter inside, and the customer who takes the medicine is waiting at the counter outside. Between the two floors, there is an experienced old pharmacist to check. These old pharmacists take the medicines they have prepared from the inner counter, check them with the prescriptions one by one, and then put them on the outer counter for customers. It is easy to avoid this practice of two hands on one side.
Stable quality concept and good industry reputation are the key driving forces for the success of Beijing Tongrentang. On March 7th, Beijing Science and Technology News and Beijing Youth Daily jointly held an award ceremony for the large-scale survey on the influence of brands on life. After tens of thousands of votes, Tong Ren Tang was also named "Top Ten Brands Affecting Life" together with well-known brands at home and abroad such as Nokia, McDonald's, Haier, FAW-Volkswagen, Sony and Microsoft.
For enterprises, direct selling, as a brand-new marketing model, expands the sales ideas of enterprise products and greatly saves costs. Tongrentang, the first brand of traditional Chinese medicine in China with a history of 338 years, is ready to enter the direct selling industry. Many places have begun to learn from Tiens Group, the leader of China's direct selling industry.
Tianjin Tiens Group, as a national direct selling enterprise in China, has become a diversified large-scale multinational enterprise led by high-tech bio-industry after more than ten years of hard development, and has successively landed in Nasdaq capital market and AMEX. Today, Tiens Group's business has spread all over 190 countries, set up branches in 105 countries and regions, and formed strategic alliances with first-class enterprises in more than 20 countries around the world.
Tiens Group, guided by scientific and technological innovation, has established a technological innovation mechanism, mainly achieved leap-forward development from three aspects: network boutique supermarket, diversified brand management and six-network interaction, and made every effort to create innovative management means. Now it has opened direct-selling supermarkets.
The advantage of Tong Ren Tang is brand value. Now Tong Ren Tang's intangible assets have surpassed tangible assets. The reporter learned from China Brand Research Institute that in the first Top 100 list of China's time-honored brands, the brand value of Beijing Tongrentang topped the list with 2.955 billion yuan. Jin Yongnian told the reporter of "Successful Marketing" that although it ranked first with a value of 2.955 billion yuan, this value was somewhat low. "Tangrentang's tangible assets have reached 7.4 billion yuan."
In 2002, Tongrentang formulated a medium-and long-term development plan. The strategic orientation is: "take modern Chinese medicine as the core, develop life and health industry and become an internationally renowned modern Chinese medicine group". The strategic goal is to "strive for zero in 10 year", that is, to 20 1 1, the total sales and profits are respectively 201growth 10 times, the sales reach 30 billion yuan, and the profits reach1300 million yuan.
Around this goal, Tong Ren Tang still has a lot to do. Because of the declining sales, sensitive direct selling industry and the integrity of time-honored brands, the combination of the three is very intriguing. Some direct selling experts said that Tiens has been developing for more than ten years, but the direct selling road of Tongrentang is brewing and has not yet started. How to learn from the existing examples will be a major issue in the direct selling process of Tongrentang.