A store in Nanjing Tongrentang in Fuzhou City. (Visual China/Photo)
Although she knew that stretch marks were not so easy to remove, Chen Li still wanted to try. In June 2021, she bought a "Nanjing Tongrentang Scar Clean Care Ointment" on Taobao.
What seduced her was the countless "three days to see the effect" and "century-old brand Nanjing Tongrentang ancient fang heritage" publicity and "invalid full refund" customer service promises in the comment area.
But a month passed, and nothing worked. Chen Li wanted to ask the seller, but found that the Taobao store had been removed
On major platforms such as Taobao, Pinduoduo, JD.com, and Kuaishou, there are many products such as "Nanjing Tongrentang Men's Health Products", "Correction Freckle Cream" and "Renhe He Shouwu Shampoo".
On the Q&A platform, there are many questions about the revision of non-pharmaceutical products of brands such as Pharmaceutical, Renhe Pharmaceutical, and Nanjing Tongrentang, and the answer area often becomes a pain complaint conference, involving false publicity, business brushing, product invalidity, and even bad face use feedback.
In fact, these products are basically OEM. Some users know that users jokingly call these brand pharmaceutical companies the "Antarctic people" in the pharmaceutical industry.
Antarctica, a well-known underwear company that sells hangtags, went public in 2007 and changed its name to Antarctic E-Commerce (002127. SZ）。
<h3>Rampant brand licensing</h3>
Brand licensing of non-pharmaceutical products by pharmaceutical companies is not new.
As early as 2017, there were investment advertisements for Nanjing Tongrentang OEM processing in a number of Baidu Tieba such as OEM Bars, health and health care bars, including medical devices, cosmetics, daily necessities and food.
Shi Lichen, founder of Beijing Dingchen Management Consulting Co., Ltd., told Southern Weekend that the brand licensing of non-pharmaceutical products by pharmaceutical companies is very prosperous in the industry, which stems from the survival pressure brought about by fierce market competition.
Amendments to Pharmaceuticals, Renhe Pharmaceuticals (000650. SZ) and Nanjing Tongrentang and other pharmaceutical companies generally layout the outside market, and in recent years, affected by policies such as collection and procurement, the competition in the hospital market has intensified, and more and more pharmaceutical companies have begun to turn to the outside market, and their living space has been squeezed.
The private pharmaceutical company Correction Pharmaceutical Once became popular with an advertisement for a Starshu gastric drug. However, in 2012, the amendment pharmaceutical industry was exposed by CCTV that the chromium content exceeded the standard, suspected of illegally adding industrial gelatin, and the "poison capsule" incident triggered national public opinion. In 2018, many P2P platforms that were invested by the revised pharmaceutical industry such as "Wynn Bao" and "Fire Wealth Management" exploded one after another. In terms of new drug research and development, The Correction Pharmaceutical also has no impressive products.
Renhe Pharmaceutical once owned star products such as shiny eye drops and gynecological cleansing, but according to the company's annual reports in the past three years, its research and development investment was less than 1% of the revenue in the same period. In 2017, only one of the six chemical drug consistency evaluation research and development work was completed. In 2020, the sales expense is 14.5 times that of the research and development expense.
Under the pressure of competition, these pharmaceutical companies have relied on the brand afterglow accumulated in the early years to start a brand licensing business.
Renhe Pharmaceutical's 2020 annual report shows that the company achieved a total operating income of 4.106 billion yuan and a total profit of 848 million yuan that year, and Renhe's own products and OEM OEM products basically accounted for half of the revenue.
More and more pharmaceutical companies are joining the ranks of non-pharmaceutical product brand licensing. In Baidu bar such as brand licensing bar, BRAND bar, and micro-business bar, brand licensing advertisements in Guangzhou Baiyun Mountain and Beijing Tongrentang also appear frequently.
A number of pharmaceutical brand users told Southern Weekend reporters that under the brand authorization model, manufacturers and distributors are responsible for product research and development, production and sales as brand users, while pharmaceutical companies as brand parties are only responsible for brand authorization and do not participate in others.
Lin Yang runs a food enterprise in Guangdong, mainly engaged in the research and development and production of health food and functional food. While operating its own brands, it also produces OEM products of Nanjing Tongrentang, Correction, Baiyun mountain and other brand pharmaceutical companies.
He said vaguely to the Southern Weekend reporter that manufacturers seeking brand authorization from pharmaceutical companies is like asking celebrities to endorse them, which can expand the popularity of manufacturers, "If you don't give benefits to stars, how can stars come?" The "benefit" he refers to is the brand licensing fee that is given to the pharmaceutical company.
Before and after the OEM, the change in product sales is significant. Taking a protein powder produced by Lin Yang Company as an example, although the price before and after the OEM is similar, the sales volume after the OEM has increased by more than twenty times. On Taobao, it is sold under its own brand, with only 5 pieces sold per month. After adding the five words of Nanjing Tongrentang, the monthly sales of protein powders produced by the same manufacturer exceeded 100 pieces.
Products with pharmaceutical branding can not only sell more, but also sell more expensive.
He Shou Wu shampoo is a brand licensed product by many pharmaceutical companies, and similar products are available in Correction, Renhe, Nanjing Tongrentang, Beijing Tongrentang, etc.
On the procurement wholesale platform 1688, the "Zhi Nu" brand 280ml He Shou Wu shampoo produced by the source factory Guangzhou Shasha Cosmetics Manufacturing Co., Ltd., 8 yuan 3 pieces of batch, the same product on Taobao retail price of 25.9 yuan. After changing the packaging of "Renhe Ingenuity", the retail price of 300ml of He Shou Wu shampoo produced by the same manufacturer rose to 118 yuan.
<h3>Anything can be attached</h3>
Many consumers rush to buy in the name of brand pharmaceutical companies, but they do not know that many of these products are OEM, and the OEM threshold is not high.
The Southern Weekend reporter, who called himself a Taobao store, consulted a number of merchants from Correction, Renhe and Nanjing Tongrentang. According to them, the brand licensing model is very simple, and there are two ways to cooperate with dealers and factories.
Distributors only need to explain the product needs, such as efficacy, variety, packaging, budget, etc., by the brand side to choose the appropriate factory proofing quotation, the two sides reach an agreement, you can officially produce. The factory can obtain brand authorization through the inspection procedure of the pharmaceutical company.
After completing the above process, the distributor also needs to pay several fees to the pharmaceutical company.
The most important of these is the brand licensing fee. The most expensive amendment is the brand licensing fee of 70%-80% of the ex-factory price of the product. Renhe is second, which is about 42% of the ex-factory price of the product. Nanjing Tongrentang is 15%-25% of the ex-factory price of the product. Of course, according to the product variety and order volume, the brand authorization fee will be adjusted accordingly.
Pharmaceutical companies also put forward task requirements for distributors. If a cosmetics distributor uses a factory cooperated by Renhe, the product order payment (calculated at the factory price) shall not be less than 300,000 yuan, and the factory shall not be less than 500,000 yuan. The revision of the dealer needs to achieve the first batch of payment targets of 200,000 yuan and the annual order volume of 2 million yuan. Nanjing Tongrentang stipulates that the dealer's first order of payment is 50,000 yuan, and the annual task volume is 1 million yuan.
In addition, dealers are required to pay a certain amount of security deposit. The single product deposit of Renhe cosmetics OEM products is 100,000 yuan, the correction is 30,000 yuan, and the Nanjing Tongrentang ranges from 20,000 to 30,000 yuan. If the order quantity task is not completed, the security deposit is deducted. Compared with the dealer, the factory has to pay more money on the order volume and the security deposit.
On September 8, 2021, in the 13th floor office building of Nanjing Software Valley Science and Technology Innovation City, Su Xiaofei sat in front of a huge tea table for an afternoon, repeating a set of actions of washing tea, making tea, pouring tea, and drinking tea.
Su Xiaofei is the investment manager of Nanjing Tongrentang Green Gold Home Health Products Company, which is mainly engaged in the brand licensing business of "Nanjing Tongrentang Green Gold Home". He told the Southern Weekend reporter who claimed to have come to consult and cooperate, "The products that sell well on the market, you can get our side stickers, and you can make money by posting them yourself." ”
However, he said, "The quality problem is a matter for dealers and factories, and if it doesn't sell well, it is a matter for dealers, what is the relationship with our brand side?" ”
The office area across the wall from him was empty, and there was little movement around the entire floor. It is as if sitting around the tea table in the hall drinking tea and chatting is the company's main business.
In fact, pharmaceutical companies will also consider the risks of licensing. The licensing contract is usually signed by the various business units under them.
Huang Yiming, a Renhe investment officer, told Southern Weekend, "The authorization contract was signed with Jiangxi Juhe E-commerce Co., Ltd., which is a subsidiary specifically responsible for the field of Renhe Great Health. "The correction is similar to nanjing tongrentang.
In this regard, Lin Yang, who has been engaged in OEM work for many years, has long been strange. "Big brands will set up many subsidiaries to carry out brand licensing business, and the purpose is to share responsibilities."
Many large distributors or factories that have obtained brand authorization have turned around and started the secondary authorization business, and the brand authorization obtained will be sold again, and a pharmaceutical company in Bozhou, Anhui Province, where Manager Rao is located, is one of them.
He claimed that the company owned the brand authorization of Nanjing Tongrentang, Amendment, Renhe and other companies, and could authorize these brands for the second time, and the distributors who developed through him only needed to pay the brand licensing fee to the brand party.
For him, a secondary mandate can reduce the amount of his task. For subordinate dealers who seek a second authorization from him, the threshold for using a famous brand has become lower.
For example, Manager Rao explained that he was required to pay a 25% brand licensing fee to the superior group and a 30% secondary licensing fee to the lower distributor. Manager Rao earns 5% more of the brand licensing fee of the subordinate dealers, but the requirements for their tasks and margin are more relaxed, which is conducive to the authorization of the "lightweight" subordinate dealers.
"You (the dealer) want to brand it, it costs you money." He did not shy away from telling the Southern Weekend reporter, "As soon as the brand logo is printed on the box, this matter is over." ”
<h3>Who is Nanjing Tongrentang? </h3>
Working in the tonic health food industry for nearly 20 years, Li Tao has worked as a distributor of many brands such as Nanjing Tongrentang and Renhe. According to his observation, in the field of non-pharmaceutical product brand licensing of pharmaceutical companies, although Nanjing Tongrentang entered the market very late, it did the most extensive.
Nanjing Tongrentang Pharmacy is placed in various types of health tea products at the entrance. (Southern Weekend reporter Shi Xuan/Photo)
Anti-shedding shampoo, scar cream, male tonic aphrodisiac, women's intimate care, children's cough patch, protein powder for the elderly. A person from head to toe, from the inside to the outside, almost all difficult and complicated diseases, Nanjing Tongrentang has symptomatic products.
Su Xiaofei mentioned many times that Nanjing Tongrentang Green Gold Home Health Products Company now has more than a thousand products and dozens of distributors. Among them, the large-scale CAN open up more than a hundred new products by one person.
Nanjing Tongrentang not only has many OEM products, but also has unclear brand authorization subjects. Most of them claimed to have the authorization of Nanjing Tongrentang.
These brand licensing entities and Nanjing Tongrentang Pharmaceutical Co., Ltd. (hereinafter referred to as Nantong Pharmaceutical) have equity relationships, as well as the history of the court. Nanjing Tongrentang Green Gold Home Health Products Company (hereinafter referred to as Green Gold Home) is one of them.
Green Gold Home was established in 2012, and Nantong Pharmaceutical directly participated in 3%. As the Nanjing semicolon of Beijing Tongrentang, in 2006, the registered trademark of Nantong Pharmaceutical, "Lejia Laopu", was recognized by the Ministry of Commerce as "China Time-honored Brand".
Nantong Pharmaceutical has granted The right to use the "Nanjing Tongrentang" brand name of Green Gold Homeland, but it is necessary to "strictly regulate the use of the brand name, strictly manage the quality of products, and strive to maintain the reputation of the 'Nanjing Tongrentang' brand name.". For example, the five words "Nanjing Tongrentang" must not be highlighted or enlarged.
Nanjing Tongrentang Biotechnology Co., Ltd. and Nanjing Tongrentang Lejia Laopu Health Products Co., Ltd. are also in a similar situation, with Nantong Pharmaceutical holding 3% and 20% of the shares respectively, and the "Nanjing Tongrentang" font size can also be used.
These companies have all been sued by Nantong Pharmaceutical for "unfair competition" or "trademark infringement" for highlighting the words "Nanjing Tongrentang" in product packaging and publicity or excessive publicity.
In addition, Nanjing Tongrentang Traditional Chinese Medical Center Co., Ltd. and Nanjing Tongrentang Health Pavilion Co., Ltd., which are 80% controlled by Nantong Pharmaceutical, are also doing brand licensing business for non-pharmaceutical products of Nanjing Tongrentang.
Only the OEM products of these two companies can enter the offline store of Nanjing Tongrentang. At the entrance of Nanjing Tongrentang Pharmacy, located in Xuanwu District, Nanjing, there are various types of health teas printed with the words "Nanjing Tongrentang Traditional Chinese Medicine Hall" and "Nanjing Tongrentang Health Care Hall".
The complicated brand authorization subjects not only make consumers have no discernment about all kinds of products under the banner of "Nanjing Tongrentang", but also the distributors are equally confused.
Li Tao, as a distributor of Nanjing Tongrentang Biotechnology Co., Ltd., was also sued by Nantong Pharmaceutical. Before the cooperation, he also asked, "Who is Nanjing Tongrentang in the end?" ”
He claimed to have fulfilled his dealer obligations. Before signing the contract, I checked the company's trademark registration and the authorization contract of Nantong Pharmaceutical in advance, but did not find anything wrong. The lawsuit was eventually lost, and many of his Taobao stores needed to pay hundreds of thousands of yuan in compensation to Nantong Pharmaceutical.
He told Southern Weekend reporters that many people had encountered the same thing. Since 2021, more than 10 dealers have consulted him. The most serious of these was a pharmacy that sold only three cans of Nanjing Tongrentang Biotechnology Co., Ltd.'s products, and was claimed 1 million yuan by Nantong Pharmaceutical.
The reason why the brand authorization system of Nanjing Tongrentang is so chaotic may be hidden in the twists and turns of Nantong Pharmaceutical in the past decade.
In 2012, Nanjing Tongrentang Pharmaceutical Liability Co., Ltd., which originally belonged to the background of state-owned assets, was privatized, and the actual controller became Nanjing Sample Technology Group, which specializes in radio frequency identification technology. In 2017, Sunflower Pharmaceutical (002737.SZ) became the new owner of Nantong Pharmaceutical. In 2020, Nantong Pharmaceutical once again returned to the ranks of state-owned assets. According to the enterprise investigation information, the Qingdao Municipal State-owned Assets Supervision and Administration Commission held 50.1983% of the shares of Nantong Pharmaceutical, becoming its current actual controller.
Guo Wen, who is more than 50 years old, entered Nantong Pharmaceutical from the mid-to-late 1980s until she retired, and she recalled to Southern Weekend reporters, "Until a colleague was refused to retire according to the standards of state-owned enterprises, I didn't know that we (Nantong Pharmaceutical) was sold." ”
Guo Wen once stumbled upon the "Nanjing Tongrentang" brand freckle cream and asked colleagues in Nantong Pharmaceutical, but the other party said "not ours".
In February 2021, Nantong Pharmaceutical established Nanjing Tongrentang Health Industry Co., Ltd. (hereinafter referred to as Nantong Health), which is solely responsible for the production and operation of non-pharmaceutical drugs in Nanjing Tongrentang, and the various operating businesses and trademark use of other subsidiaries are managed by the company.
Yao Haimiao, head of brand operations at Nantong Health, explained to Southern Weekend reporters that the establishment of this company is to clean up the source and develop the non-pharmaceutical sector of Nanjing Tongrentang. Sun Huaidong, chairman of the company, said at the meeting many times that he hoped that the company could achieve 70%-80% of self-production and self-sales. However, she also can't tell the relationship between a number of Nanjing Tongrentang brand licensing entities.
<h3>"Strange stuff"</h3>
"Taobao sells Nanjing Tongrentang fakes" "Renhe facial cleanser smells pungent and has quality problems". On the black cat and consumer insurance complaint platforms, there are many complaints about the non-pharmaceutical OEM products of these pharmaceutical companies. Sometimes, the problems with these OEM products are unbelievably absurd.
In July 2021, Wang Shuo bought Nanjing Tongrentang Green Gold Home Brand Deer Whip Sea Cucumber Oyster Slices and Deer Whip Ginseng Maca in two Jingdong self-operated stores. He has worked in a state-owned traditional Chinese medicine enterprise for many years and has accumulated a certain amount of medical knowledge.
Wang Shuo found that products made of three high-protein materials, deer whip, sea cucumber and oyster, had a protein content of 0 in the nutrition composition table. The ingredient list of "microcrystalline cellulose" has also been mistakenly written as "microcrystalline cellulose". These two mistakes were made carelessly, leaving him speechless.
He then reported to the local market supervision department the distributor Nanjing Tongrentang Lujin Home Health Products Company and the manufacturer Guangdong Yirui Biotechnology Co., Ltd., and the two companies were eventually fined 20,540 yuan and 12,668 yuan by the Market Supervision Administration, respectively.
For consumers who do not know much about pharmaceutical knowledge, the non-pharmaceutical OEM products of these pharmaceutical companies often give people the illusion and have a strong misleading effect.
Before receiving the goods, Chen Li always thought that the "Nanjing Tongrentang Scar Net Care Ointment" she purchased was a kind of ointment. But when I saw the packaging, I found that the manufacturer of this care ointment was actually a cosmetics company.
The shop was removed from the shelves, and Chen Li returned 7 scar creams purchased for more than 600 yuan without a door. Taobao customer service said that the seller's account has no money and cannot pay Chen Li. Chen Li asked the platform for business information, but was told that she needed to go through a more complex information disclosure process.
Southern Weekend reporters asked Taobao customer service about this issue, and the other party could not provide further help in addition to expressing regret.
Chen Li suddenly remembered that the reason why she learned about the Nanjing Tongrentang Scar Cream was because she searched for similar products on Taobao a year ago. Since then, Taobao has been pushing all kinds of "strange things" to her.
(At the request of the interviewees, Chen Li, Lin Yang, Li Tao, Guo Wen, and Wang Shuo are pseudonyms)
Southern Weekend reporter Shi Xuan Southern Weekend intern Yan Yifan