Time-tested brands must still be modernized

TONGRENTANG, a time-honored brand based in Beijing, sells honey mixed with herbs as one of its products. Yet Yancheng Jinfeng, one of its honey suppliers, reportedly supplies it with out-of-date honey. Tongrentang has apologized to its customers. But the reports have already dealt a heavy blow to its reputation. The Mirror comments:

The local food and drug administration of Daxing district, Beijing municipality, has said it is investigating the case. But although there is no conclusion about the exact responsibility of Tongrentang yet, at the least its supervision over its suppliers would appear to be not up to scratch. That in turn shows Tongrentang has a not-so-good internal management system, which is a common problem among many time-honored brands.

According to official data, the number of time-honored brands has already dropped from 16,000 in the early 1950s to 1,128 today.

Worse, of those that are still in existence, 20 percent suffer from long-term losses while 70 percent are far from being prosperous. Only 10 percent have good profit rates.

That has much to do with the poor management of the time-honored brands, which have not undergone any modernized management reform. They lag behind in innovation, production, human resources, public relations, as well as financing.

Time has granted these brands an incomparable advantage in the market competition, because consumers tend to have a kind of natural trust for them due to their staying power. However, such trust cannot be overdrawn. When time-honored brands are found to have lax quality control, as in the case of Tongrentang, their reputation will suffer. If any time-honored brand is found to have compromised its products' quality in pursuit of profits, that would likely be a fatal blow to its reputation, even threaten its survival.

It is time for such brands to undergo modernized management reform. Only by combining the wisdom of modern management and that of our ancestors will the time-honored brands prosper again.