Beijing Tong Ren Tang Co., Ltd., a time-honored brand with a century-long history, has recently been embroiled in controversy over its "Antarctic Krill Oil" product. The Shanghai Consumer Council's testing revealed that the product claimed a phospholipid content of 43%, but actual test results showed 0%, raising allegations of false advertising. However, Tong Ren Tang Group responded by stating that "this product does not belong to us." Behind this "fraud" controversy lies the company's multifaceted risks in brand control, performance pressure, and governance structure.
1. **Product Fraud or Brand Mismanagement? Licensing Chaos Erodes Trust** The product in question was labeled as "Beijing Tong Ren Tang 99% Pure Antarctic Krill Oil," distributed by Beijing Tong Ren Tang (Sichuan) Health Pharmaceutical Co., Ltd.—a subsidiary indirectly owned by Tong Ren Tang Group. Although the group quickly distanced itself, claiming the product was not officially issued by them, a simple search for "Beijing Tong Ren Tang" on e-commerce platforms still reveals numerous licensed products, ranging from health supplements to daily necessities, spanning multiple categories.
While such licensing models generate short-term royalty income, they carry significant risks: once product quality issues arise, consumers often blame the "Tong Ren Tang" brand itself. Despite repeated statements from the group prohibiting subsidiaries from misusing the trademark, enforcement remains weak in practice. The brand's value is continuously diluted in a cycle of "licensing—scandal—denial," and this credibility drain may ultimately undermine its century-old foundation of trust.
2. **Declining Performance: Short-Term Tactics Amid Operational Pressure** Tong Ren Tang's recent financial performance has been lackluster. Its Q3 2025 report showed declines in both revenue and net profit, with net profit attributable to shareholders dropping by 12.78% year-on-year. In fact, since 2024, its net profit has recorded its first decline in nearly five years. With sluggish growth in core business, subsidiaries may increasingly resort to "asset-light" strategies like licensing to boost revenue quickly.
However, while such tactics may temporarily inflate financial statements, they do little to enhance core competitiveness. Instead, lax oversight leads to inconsistent product quality and misleading claims. As the "Tong Ren Tang" name appears on more low-quality, unrelated products, its traditional motto—"No shortcuts in preparation, no compromise in quality"—fades in consumers' minds.
3. **New Leadership: Can It Solve the Dual Challenges of Control and Growth?** In August this year, Zhang Chaohua assumed the role of Chairman of Tong Ren Tang. Previously serving as General Manager, she was already the company's highest-paid executive. Now, she faces a daunting management challenge: how to overhaul the chaotic licensing system, rebuild brand control mechanisms, and find a sustainable growth path amid weak core business performance.
Tong Ren Tang operates multiple listed companies with a complex ownership structure and numerous subsidiaries, making unified brand management inherently difficult. Without a robust trademark approval and quality supervision system at the group level, incidents like the "Krill Oil Scandal" may recur. Meanwhile, the company urgently needs to optimize its product portfolio and enhance innovation to strengthen market competitiveness—rather than relying on brand licensing as a stopgap measure.
**Conclusion** Tong Ren Tang's current predicament is not just about a single product's quality issue but reflects a classic dilemma for heritage brands in modern expansion: balancing brand value with commercial interests. In today’s consumer market, where integrity and quality are paramount, failure to address licensing chaos and strengthen internal governance will erode even the deepest brand heritage. For the new management, decisive reforms and a return to core values will determine whether this century-old enterprise revives or fades into obscurity.
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