TAIPEI — China’s well-known and well-loved brands like Tong Ren Tang, Quan Jude, Liu Biju, Gou Buli, Wang Zhihe and Zhang Xiaoquan, to name a few, have earned a reputation throughout the last century, or more, since they have been in operation. However they are currently facing ordeals and challenges because of social and economical reforms.
Beijing’s Xinjing Bao reported that Beijing launched “Beijing’s Old Businesses Project” in June. Beijing will support 20 old Beijing businesses in the next two to three years. Beijing will implement a project to develop chain stores, help products enter the business market and gain lucrative commercial profit. They will form regional development strategies and enhance business management. Beijing also plans to accelerate state-owned business reforms and advance stock investment and shares for the reformed businesses.
Zhang Xiaoquan Scissor Company was established in 1663
In a market like today that is filled with adulterated products, many merchants are selling counterfeits, using well-known and established trademarks, thus hurting the reputation of established businesses. Established businesses also have a hard time adjusting to the new economic market and planning system.
The transition has made evident some problems with the older businesses such as obsolete business methods, high production costs and an older, less-educated staff. Older businesses also tend to lack innovation in terms of their organization, management, and product development, especially in terms of product diversity. Competitors, counterfeit products and urban reconstruction add to the internal difficulties that these businesses face.
Statistics indicate that among the 1,600 old businesses recognized by China in 1990, 70 percent of them barely survived, and almost 20 percent suffered from long-term deficits leaving them on the verge of bankruptcy, wiht only 15 percent bringing in a profit.
Due to urban reconstruction issues, older businesses have faced relocation and may have to discontinue operation. For example, among 23 old food businesses in Chengdu province, 15 have already vanished, including the well-known Tan Douhua, Lai Tangyuan and Fuqi Feipian.
The renowned Wang Mazi Scissors and Zhang Xiaoquan Scissors have both been in business for more than 300 years. Wang Mazi Scissors applied for bankruptcy because of its reform failures and issues related to being a state-owned enterprise. On the other hand, Zhang Xiaoquan Scissors is still doing well.
In addition, older businesses generally neglect advertising and sales promotion programs. They like to remain in their local region and rarely have an international marketing strategy. A survey of 15 old businesses shows that, only Tong Rentang and Quan Jude have won recognition from consumers in five cities throughout China, while the rest only exerted local influence.
Jingde County Ceramics in Jiangxi province, which is over 1000 years old, flourished under Beijing’s economic planning system, but has faded under its own economic market system. The Jingde County’s custom of seeking high quality products with disregard for the cost has caused it to lose its reputation as China’s Ceramic Capital. Instead, the title has gone to Guangdong’s Chaozhou, which has better market sense and business management.