Written by: Bai Yun
Posted on: September 13, 2018 | 
| 中文
Wuyutai Tea Shop
“Good wine needs no bush.” This old maxim upheld by old and famous shops doesn’t seem suitable in the internet era. Despite their long history and good reputation thanks to their exquisite craftsmanship and cultural background, many brands find it hard to survive if they cannot adapt to the new retail era full of fast-changing business impacts. However, as time-honoured enterprises have started to embrace the internet in recent years, this situation is beginning to improve.
At the beginning of 2018, Alibaba issued the 2017 National Digital Economy Development Report, which gives a panorama t the vitality of digital economy in different provinces of China in 2017 through e-commerce, new retail, payment, logistics and other big data, employment index and cloud index as well. As for Beijing which has plentiful time-honoured brands, e-commerce has helped the old-line companies enter markets across China and even the world.
Time-honoured Brands Sold to Overseas Market via Internet
With the development of times, e-commerce is booming. In the era of new retail, old brands have also embarked on the road of using the internet.
“Our offline consumers are mainly middle-aged and elderly people, so we want to reach more young consumers to enlarge our business,” said Tian Kun, vice director of the sales department of Daoxiangcun Food of Beijing. He said that as their market is expanding, their online sales and growth rate have become really impressive, with the sales growth in 2017 reaching 200%.
Through new retail, this old and famous brand has got better access to young consumers. “Our offline consumers are mainly the aged between 45 to 70,” Tian Kun said that the increase of online consumers enabled Daoxiangcun to reach more and more young consumers aged between 18 to 30. Besides covering more consumers, the northern China-based food company has also aroused interest from southern consumers with its pastries becoming increasingly popular among Zhejiang and Guangdong consumers.
Chen Qiao, director of Wuyutai Tea’s online business, said that Wuyutai is a typical regional time-honoured brand, with its offline shops mainly distributed in Beijing. However, over 80% of its online orders come from areas outside Beijing. The online selling channels enable non-natives who are fond of Beijing cultural products and local consumers who leave Beijing to buy Wuyutai’s products. It is worth mentioning that Baihua Bee, Xinyuanzhai Food, Sanyuan Foods and many other time-honoured and local brands in Beijing are entering the international market through e-commerce platforms.
According to surveys of statistical departments, in 2015, 11 of the 47 time-honoured retailers have designated use of e-commerce transaction platforms to sell goods or provide services, accounting for nearly a quarter of the total. These retailers are engaged in food, clothing, medicine and books. Their total sales volume of e-commerce registered 260 million yuan, with an operating revenue growth of 9.5%, which was much higher than the 6.9 % growth of traditional established enterprises not using e-commerce at all.
The Report on Beijing Time-honoured Brands Using New Retail released recently by Aliresearch shows that from January to August in 2017, the top 10 Beijing time-honoured brands had gained more than 800 million yuan in sales, with many of them using Tmall to sell to overseas markets. According to the statistics, 1.2 billion yuan worth of goods of over 70% of Tmall-registered businesses have sold to overseas markets in more than 220 countries through Tmall and Lazada.
Use of New Fashion Lets Young People Fall in Love with “Old Products”
When it comes to old and famous brands, the words that come to our mind first are often “authenticity”, “specialty”, and “gifts to the elders”, which seems to have nothing to do with young people. In fact, nowadays the “old” brands have changed their dull image of the past and started to follow the new fashion of using the internet. Remember Pechoin that attracted numerous followers by using an extra-long narrative graph in WeChat Moments? Regards from Royal Me, an H5 advertisement for the Imperial Palace mooncakes, and Wufangzhai that crossed over to cooperate with a video website for its ACG AR mooncakes, all are favored by young consumers. Who would say these products are “old-fashioned”?
Behind these amazingly creative marketing cases is the rapid growing sales performance. According to the aforementioned Aliresearch report, in the past two years, the sales growth of top 10 e-businesses of Beijing time-honoured brands exceeded 40%, and that for 2016 reached 59.5%, hitting a new record high in recent years. In 2016, the threshold for finalists of the top 10 was over 20 million yuan, 2.5 times that of 2014. E-commerce has directly propelled sales growth of time-honoured brands.
However, Wang Rui, Associate professor of Marketing Department, Guanghua School of Management of Peking University said that time-honoured brands do not want to be remembered by consumers for just festivals, so more and more of them are trying to embrace the marketing and operations trend of new retail through product innovation and collaboration with e-businesses to realize the everyday consumption of their products.
All Parts of China in Action for Innovative Development of Time-honoured Brands
Luyang District of Hefei city in Anhui province of China set up a “cluster” to build the Hefei version of Qinghefang Street, a historical tourist resort in Hangzhou, to revitalize the old brands. By supporting time-honoured brands to integrate with tourism and building a featured commercial street for them, the city guides them to gather in the cluster, which aims to introduce old and famous enterprises not only from within the city and province, but also from other parts of China.
As Tongrentang Traditional Chinese Medicine, Wangzhihe Food and some other CTBs successively started business in Yutian County in Hebei province of China, the number of CTBs that have invested or started businesses here has reached 20. In October 2017, Yutian CTB Production and Processing Cluster and CTB Tourism and Sightseeing Base officially became the first multi-functional CTB base of its kind in China. Yutian will develop sightseeing tours around the time-honoured shops, build the CTB Cultural Museum, CTB Cultural and Commercial Street and a live theatre for CTB Tales.
In 2017, Sizhitang Medical Management from Ruzhou in Henan province of China cooperated with NCI Health to launch the model of “CTB + modern new experience” for the first time. By using the strengths of the famous brand and traditional Chinese medical treatment, as well as the existing medical foundation of NCI Health Examination Centre, the two jointly built a medical institution integrating traditional Chinese medicine, modern western medicine and disease screening and prevention, to play to the advantage of traditional Chinese medicine in preventive treatment for disease, and to promote integrated development of treatment and convalesce.
Translated by Xu Donglin
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