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Time-honored Chinese Brands Face the Test of Time
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During his first visit to China in 1972 former US President Richard Nixon received two pandas from the Chinese Government as a sign of friendship. The gesture was greatly appreciated in the United States.

What's less well known is that President Nixon also took home some milk candy as a special gift from then Premier Zhou Enlai. The White Rabbit milk candy is a household name in China and the story goes that it was Zhou's favorite snack when working late at night.

It was also the secret love weapon of world champion weightlifter, Zhang Guozheng, who moved his girlfriend with 20 kilograms of the candy.

White Rabbit is one of many long-standing and famous Chinese brands tied to social development and key historical events.

Yesterday the Ministry of Commerce gave the designation of "time-honored brand" to 430 brand names throughout China. According to the selection criteria these brands must have been in existence before 1956 and very popular.

Worldwide China-made textiles and home appliances enjoy great popularity and contribute significantly to the country's trade surplus because of their low price and good quality. At home, however, old brands are struggling to gain a foothold in the domestic market where competition from multinational giants is intensifying.

These brands have experienced difficulties during their long histories. After being established by a family or individual possibly hundreds of years earlier most of these enterprises became state-owned in the 1950s. After decades under the planned economy they've started to face fierce competition from the market economy.

Fang Shuying, chairwoman and general manager of Tianjin Laomeihua shoe shop, said a heritage brand was more than a product. It represented the culture of China and had deep traditional roots.

Opened in 1911 her shop first became well-known for its specially made shoes for the bound feet of Chinese women living in the era before the People's Republic of China was founded in 1949. Back then the saying "3-inch golden lotus" described the ideal feet of Chinese women.

Many of these enterprises face various problems. Patents and intellectual property rights, for instance, are two concepts that are foreign to these historic brands.

Wangmazi, the best known and long-standing brand of scissors in China after being established in 1651, went bankrupt in 2004. "We were defeated by fake and inferior Wangmazi products," a spokesman for the enterprise said.

Chairman Mao Zedong was often quoted as saying, "Wangmazi, Donglaishun (the famous hotpot restaurant) and Quanjude (the well known Beijing duck restaurant) need to be preserved forever."

However, in 2004 more than five million fake Wangmazi scissors were found on the market. This was three times the output of the genuine brand itself.

Goubuli, a famous brand of traditional baozi, based in Tianjin faces a similar problem. Thousands of stores with the name are found nationwide but a company spokesman said that only a few of them have been authorized. The fake stores, he said, without the company's special recipe have ruined the product's image.

As new brands emerge every day in China traditional products attract more middle-aged and older people rather than the young. The famous Beijing bakery, Daoxiangcun, has long queues in the store most of the time but customers are generally in their 50s and 60s. The younger generation is more frequently seen in KFC or Pizza Hut.

However, some old brands are criticized for bad service and low efficiency. Tourists to Tianjin are urged to taste the best baozi ever but they often complain about the service at the flagship store of Goubuli. Heritage has become something businesses appear to take for granted and sometimes they are so proud of their brands they pay scant attention to customers.

Faced with increasing competition many brands have started to reform and build themselves a fresh image to attract new customers. The Flying Pigeon brand, the biggest bicycle maker in the 1980s, sold only single-gear bicycles in only one color back then. Now it has diversified its product range to include more than 300 models of racing and mountain bikes to meet new demands and tastes.

Some brands have flourished with new products and the courage to change. The sales volume of Wong Lo Kat herbal tea, for instance, has increased by more than 40 percent each year since its canned product came onto the market three years ago.

As a famous brand in southern China the herbal tea was often sold at the market with a bowl at a low price. Wong Lo Kat combined the recipe with the convenience of a canned beverage.

Though each can is priced at over 3 yuan (38 US cents), compared with less than 2 yuan (25 US cents) for Coca-Cola, its sales volume in China is higher than the soft drink, according to an official from the Guangdong Food Industry Association.

The delicate craftsmanship that made Laomeihua shoes famous in Tianjin has continued with its new target market. It now employs more than 70 workers making comfortable, low-priced shoes for the middle-aged and elderly, its chairwoman Fang said.

And on occasions tradition simply wins out. In a recent survey of Chinese female consumers Tongrentang surpassed other pharmaceutical brands. Founded in 1669 Tongrentang supplied medicines and prescriptions to royal families for 188 years. Today it has overcome the outdated, parochial connotations that go with being a heritage brand with new medicines and the opening of chain stores in shopping malls.

A spokesman for Huogongdian, a snack food shop in Changsha, Hunan Province, said it had imported various foods to attract new customers. They previously had only eight types of food but now more than 40 are available at the shop where annual sales are more than 100 million yuan (US$12.7 million).

Minister of Commerce, Bo Xilai, said the first group of time-honored brands employed more than 120,000 people and all such brands provided work for over 600,000. The longevity of these goods,  Bo said, displayed that China had started to pay attention to building brands.

(China Daily December 20, 2006)

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