In-depth Analysis and Reconstruction Strategy for Tongrentang's Brand Trust Crisis

The trust crisis currently facing Tongrentang is not an isolated incident but stems from deep-seated contradictions in its brand governance structure [1]. Since its founding in 1669, Tongrentang has accumulated a heritage of integrity culture with the motto ‘Although the processing is complicated, we dare not save labor; although the taste is expensive, we dare not reduce materials’ [1]. However, this cultural identity is being eroded by the chaos in the brand system.

In China, there are three time-honored brands named ‘Tongrentang’: Beijing Tongrentang, Tianjin Tongrentang, and Nanjing Tongrentang. Although they share the same origin from the Le family, they have long been separated due to historical changes and now belong to different state-owned or local-controlled entities [1]. This pattern leads to a market flooded with products of similar names and packaging but varying quality, making it hard for consumers to distinguish genuine from fake.

What’s more complex is that the three enterprises have been in constant disputes over trademark and brand name usage rights for years. Although Beijing Tongrentang Group announced the acquisition of 60% equity in Tianjin Tongrentang in 2025, bringing a turning point to the century-long legal dispute, Nanjing Tongrentang still operates independently, and its OEM products have repeatedly been exposed to quality issues, further diluting the overall value of the Tongrentang brand [1].

The core problem lies in the failure of the brand authorization mechanism. Authorized subsidiaries do not use the core ‘Double Dragon Logo’ of Tongrentang Group but register their own trademarks like ‘Neiting Shangyong’ and ‘Zhenhuang’ for filing, yet prominently display ‘Beijing Tongrentang’ on product packaging [1]. This practice uses consumers’ inherent trust in time-honored brands for misleading marketing, making it difficult for the public to clearly identify the true connection between the product and the group’s core brand.

In December 2025, a comparative test by the Shanghai Consumer Council on 15 popular Antarctic krill oil products showed shocking results for a product labeled ‘Beijing Tongrentang 99% High-Purity Antarctic Krill Oil’ [2]. The product advertised ‘high content’, ‘Chilean imported raw materials’, and ‘highly purified’ on its webpage, claiming a phospholipid content of up to 43%, but professional tests showed its phospholipid content was 0% [2].

Lu Yimin, a senior engineer at the Shanghai Nutrition Food Inspection Station, explained that krill oil from Antarctic krill must contain phospholipids, so a 0% content means the product has no krill oil at all and is suspected of fraud [2]. Even more shocking: the product consumers bought for 50-60 yuan per bottle had an ex-factory price of only 3.7 yuan [2]. The involved manufacturer, Anhui Habo Pharmaceutical Co., Ltd., admitted during an interview that it did not add the claimed ‘Antarctic krill oil’ in production [2].

The krill oil incident is not an isolated case. Recent years have seen frequent quality issues with Tongrentang products:

• 2018 Honey Incident
  : The entrusted manufacturer of Tongrentang Bee Industry (a subsidiary of Beijing Tongrentang) recycled expired honey and marked false production dates. As a result, Tongrentang Bee Industry was heavily fined, its food business license revoked, and the State Administration for Market Regulation canceled Beijing Tongrentang’s ‘China Quality Award’ title [2].
• 2024 Ren Dan Mercury Overreach
  : Some German consumers reported abnormal health after consuming Ren Dan from Beijing Tongrentang. Tests showed mercury content exceeded the domestic standard by 50,000 times [2].
• 2025 3·15 Foot Bath Package Incident
  : Multiple popular foot bath packages were exposed to excessive bacterial content, with Tongrentang-related products prominently listed [2].

The 2025 Q3 report shows Tongrentang achieved 13.308 billion yuan in revenue in the first three quarters (down 3.70% YoY) and 1.178 billion yuan in net profit attributable to parent (down 12.78% YoY) [1]. In Q3 2025, the company’s gross margin was 42.69%, down 0.54 percentage points YoY and 0.15 percentage points sequentially [1].

As the first listed company under Tongrentang Group, Beijing Tongrentang Co., Ltd. had a 2024 net profit of 1.526 billion yuan (down 8.54% YoY), its first negative growth in five years [3]. Currently, Tongrentang’s market value is about 44 billion yuan, while peers Yunnan Baiyao and Pien Tze Huang have market values around 100 billion yuan each [3].

In 2025, Tongrentang’s management underwent a major overhaul. From June to August, core executives like General Manager Zhang Chaohua, Chief Accountant Wen Kaiting, and Chairman Di Shubing left their posts, replaced by new directors Chen Jiafu, Pan Baoxia, and Wang Xingwu [1]. Zhang Chaohua, a ‘veteran Tongrentang person’ who had been group deputy general manager for only two months, took over as chairman to turn the tide [1].

Notably, many departing executives did not leave the Tongrentang system but were transferred to the group or tech subsidiaries at the same level [1]. Such internal rotations help maintain stability but may delay deep structural reforms. Without changing the governance mechanism, replacing personnel alone will not fundamentally eliminate accumulated ills [1].

Tongrentang needs to solve brand fragmentation from top-level design. First, accelerate integration of Tianjin and Nanjing Tongrentang to eliminate ‘one brand, multiple owners’. Second, establish unified authorization standards to clarify which products can use the ‘Double Dragon Logo’ (and which use sub-brands) and make these standards public. For OEM products, mandate prominent display of actual manufacturers to ensure consumer知情权.

The ‘collect fees but ignore quality’ model essentially trades the brand’s reputation for quick money [2]. Tongrentang needs a full-chain quality control system:

• Access Mechanism
  : Strict supplier screening and on-site audits of all entrusted manufacturers.
• Process Monitoring
  : Regular sampling and irregular quality tests of OEM products in the market.
• Responsibility Traceability
  : Rapidly trace and remediate issues once found.
• Information Disclosure
  : Proactively publish test results and establish a fast response mechanism for consumer complaints.

Performance pressure may have driven subsidiaries to adopt the ‘light asset, quick cash’ OEM model [1]. While this boosts short-term revenue, it undermines core competitiveness and leads to quality issues and false advertising, eroding brand value in the long run [1].

Tongrentang needs to refocus on core businesses to avoid over-expansion and brand overdraw. For cross-border operations, stricter risk assessments are needed to ensure all ‘Tongrentang’ products meet quality standards.

Chang Junhu (Beijing Enhe Law Firm IP lawyer) noted that as group-controlled enterprises, consumers have reasonable trust in ‘Beijing Tongrentang’ - this connection cannot be severed by one-sided group statements [2].

Tongrentang needs a more transparent communication mechanism: First, clarify relationships between the group and subsidiaries, core and OEM products for clear consumer distinction. Second, proactively disclose investigation progress and results for quality issues to show responsibility. Third, rebuild emotional connections via brand stories and cultural experiences.

Tongrentang’s crisis reflects the common dilemma of Chinese time-honored brands in modern transformation. Balancing growth with preserving century-old reputation is a question all such brands must answer.

Tongrentang is more than an enterprise: it symbolizes TCM integrity and quality and carries Chinese cultural heritage [1]. Consumers buy not just products but cultural trust [1]. Rebuilding this trust requires systematic efforts across integration, quality control, focus, and communication - plus the management’s resolute determination to make tough reforms.

The signboard of a time-honored brand is hard-won but easily destroyed. Whether Tongrentang survives this crisis depends on turning its ancestral motto into institutional practice.

— References —
[1] Guancha.cn - Tongrentang’s ‘Two Faces’: Century-old Motto vs. OEM ‘Gray Industry’
[2] Tencent News - Double Blow to Performance and Reputation: How Out-of-Control OEMs Hollowed Out a Century-Old Brand
[3] Chinanews.com - People’s Livelihood Survey: Tongrentang’s Golden Signboard in OEM