Core Viewpoint - The article discusses the potential risks and implications of the brand expansion strategy employed by Beijing Tongrentang, a well-known traditional Chinese medicine brand, highlighting issues related to product quality and brand integrity due to extensive licensing and outsourcing practices [1][3][10]. Group 1: Brand Integrity and Quality Issues - Beijing Tongrentang issued an apology regarding a product quality issue with its "99% high-purity Antarctic krill oil," which claimed a phospholipid content of 43% but was found to be 0% in actual tests [3][10]. - The brand's licensing model has led to a proliferation of products under the Tongrentang name, many of which are produced by third-party manufacturers, raising concerns about the authenticity and quality of these products [3][4][10]. - The complexity of brand ownership and licensing has resulted in confusion among consumers, as multiple entities within the Tongrentang group produce and sell products under similar names, leading to difficulties in distinguishing genuine products from counterfeit ones [6][7][10]. Group 2: Business Model and Market Strategy - The company has expanded its product offerings significantly, including health supplements and daily necessities, which has been referred to as the "Tongrentang Universe," but this expansion raises questions about brand dilution [3][4][10]. - Beijing Tongrentang Health Pharmaceutical has adopted a direct sales model for its health products, which is often associated with negative perceptions in the market, potentially risking the brand's reputation [10][12]. - The company is facing financial challenges, with a reported net profit of 1.526 billion yuan for 2024, marking an 8.54% decline year-on-year, indicating a need for strategic reevaluation amidst its aggressive expansion efforts [12]. Group 3: Consumer Trust and Brand Management - The article emphasizes the importance of establishing modern corporate governance and a robust authorization system to restore consumer trust in the Tongrentang brand, which has been built over a century [12]. - The dual approach of maintaining traditional practices while attempting to attract younger consumers through innovative strategies reflects the internal contradictions faced by the brand during its rapid expansion [12].