How to Revitalize "Time-Honored Brands"?
In 2024, Chinese enterprises are not only gaining higher "visibility" in global sports events such as the European Cup and the Olympics, but some companies have also begun to seize open internet channels like streaming media to strengthen direct contact with overseas consumers.
In the past, when Chinese companies appeared on the international stage, part of the reason was to increase their visibility in the domestic market.
However, in the face of the trend that "not going global means being out," Chinese companies are now vigorously promoting brand globalization and expanding into more overseas markets.
Among the many international sports event sponsors, the Hengyuanxiang Group (hereinafter referred to as Hengyuanxiang) is a unique one and a pioneer: it does not have sports products and has a low association with summer, but Hengyuanxiang has been a steadfast sponsor of the Olympics for 20 years.
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"Through cooperation with the Olympics, the brand value of Hengyuanxiang has been enhanced," said Chen Zhongwei, Chairman and General Manager of Hengyuanxiang Group, in a recent exclusive interview with a reporter, telling the story of how this "old brand" has been revitalized through international events.
Despite Hengyuanxiang's nearly century-old establishment, Chen Zhongwei does not like others referring to Hengyuanxiang as an "old brand" company.
"Hengyuanxiang has been leading the industry since its inception and has been keeping pace with the times.
If it were an industry like pharmaceuticals, it might be better to be 'older,' but Hengyuanxiang is in the fashion industry, just like LV, Hermès, and other century-old enterprises," he said.
The Hengyuanxiang brand originated in 1927 when its founder, Shen Laizhou, opened a woolen yarn specialty store on Shanghai's Fourth Road, focusing mainly on wholesale and secondary retail.
However, since Xingsheng Street was the "distribution center" for woolen yarn sales in Shanghai at the time, Hengyuanxiang's business at the beginning was not as smooth as expected.
After gradually accumulating capital, Shen Laizhou spared no expense in opening a three-story, three-bay shop on Xingsheng Street.
The new store not only learned from department stores in terms of decoration and design but also featured large glass windows along the street, trendy neon lights, and glass counters, completely changing the traditional image of woolen yarn specialty stores with dim lighting and difficult consumer choices.
After the rise of the woolen knitting craze, Hengyuanxiang also seized the opportunity to hire knitting experts, including Feng Qiuping, to "sit in" at Hengyuanxiang, teaching knitting techniques, and invited movie stars of the time, such as Zhou Xuan, Shangguan Yunzhu, and Wang Danfeng, to be models, attracting a large number of consumers and becoming a fashionable luxury store with increasingly booming business.
After the founding of New China, Hengyuanxiang was once dormant under the joint public-private operation model, but continued to promote reforms in the 1980s, revitalizing its growth momentum in the field of woolen yarn production and sales, and once again expanding its market through the advertising "bombardment" of "Hengyuanxiang, sheep sheep sheep."
In 1991, Hengyuanxiang obtained the right to use the pure wool mark certified by the International Wool Secretariat.
Subsequently, Hengyuanxiang's hand-knitted wool production and sales volume increased significantly, once reaching 10,000 tons, and sitting on the global number one "throne."
"Around 1995, we were actually the 'invisible champion' of the industry, but unfortunately, the woolen yarn industry declined afterward.
If Hengyuanxiang had stubbornly stuck to the woolen yarn field at that time, it might not exist now," said Chen Zhongwei.
"Therefore, at the 1996 company strategy seminar, Hengyuanxiang proposed that since it was already the world's number one, could it expand into the international market to achieve growth?"
"But the expert consultation gave Hengyuanxiang a 'wake-up call.'"
Chen Zhongwei said, first, it is difficult for overseas consumers to recognize the Hengyuanxiang trademark, and the brand cannot actually be "internationalized"; second, there is a lack of sufficient financial strength to promote internationalization, such as entering the European market, which was estimated at the time to require spending all of Hengyuanxiang's annual operating income for brand promotion to be effective, which is obviously unrealistic; third, there is a lack of international operation talent teams.
If it cannot be internationalized, how can it continue to promote the enhancement of brand value?
"After discussion, it was hoped to rely on the three major sports events: the World Cup, the Olympics, and the F1 race."
Chen Zhongwei recalled that to become a global brand, one must choose global events, and the three major sports events all meet this requirement.
However, after repeated assessments, the Olympics were the most possible.
The association with the Olympics reshaped Hengyuanxiang's brand system.
"As early as 1996, Hengyuanxiang was involved in some activities related to the Olympics, and after Beijing's successful bid for the Olympics in 2001, we felt the time was ripe," Chen Zhongwei introduced, but from "thinking" to "doing," Hengyuanxiang not only had to persuade itself but also had to be accepted by the International Olympic Committee.
In fact, Hengyuanxiang's association with the Olympics was not high, and the internal division had always been great.
"On the one hand, Hengyuanxiang does not have sports products, and on the other hand, the Olympics are mostly held in the summer, and Hengyuanxiang's traditional woolen products are in the peak sales season in winter, but in the end, we still convinced ourselves that cooperation with the Olympics is not for immediate sales but for the enhancement of brand value," said Chen Zhongwei.
On December 22, 2005, Hengyuanxiang officially became the sponsor of the clothing and home textile segment of the Beijing Olympics.
At the 2008 Beijing Olympics, Chinese athletes entered in "tomato and scrambled egg" attire, and its red and yellow color scheme was impressive.
At this Olympic Games, Hengyuanxiang also provided formal attire for Beijing Olympic Organizing Committee officials and all technical officials of the Olympics, as well as bedding for the Olympic Village.
Currently, Hengyuanxiang has provided formal attire and other textile clothing supplies for several Olympic events.
Since 2019, Hengyuanxiang has officially become the official formal attire supplier of the International Olympic Committee and renewed its contract with the International Olympic Committee on January 18, 2024, to continue to provide formal attire for International Olympic Committee members and staff for the next two years.
"Hengyuanxiang has learned a lot from its cooperation with the Olympics," said Chen Zhongwei.
The audit and evaluation of Olympic sponsors are particularly strict, which is a multi-dimensional examination and selection of the company's industry status, reputation, profitability, social responsibility, etc.
Through the cooperation between the two parties, Hengyuanxiang's brand, intellectual property rights, and other aspects of standardized operations have been fully tested and improved.
Chen Zhongwei believes that sports event marketing has a huge impact on the enhancement of brand value, and international brands are also "borrowing strength" from sports events, but how to combine it is a test of the brand's operation.
Since the 1990s, Hengyuanxiang has been moving away from a single woolen yarn product, and its product system has extended to clothing, knitting, home textiles, children's wear, and other fields.
To date, the revenue proportion of traditional wool-related products has significantly decreased.
"Old brands" must also be sensitive enough to changes in the times.
"For example, in 2010, the impact of e-commerce platforms had just begun, and in 2011, we established an e-commerce company.
Faced with the changes in online and offline sales, Hengyuanxiang must integrate into the times," Chen Zhongwei introduced.
From 2012 to 2022, over the past 10 years, Hengyuanxiang's average annual compound growth rate reached 39.2%, and currently, 80% to 90% of the sales of many products have been completed online.
Low-carbon, digitalization, aesthetics: Hengyuanxiang's three major growth points for the future.
Looking at future development, Hengyuanxiang has been laying out new growth points, especially in the fields of low-carbon, digital transformation, and the aesthetic economy, making more attempts to create a larger growth space.
In Chen Zhongwei's view, e-commerce is just the beginning of a broader digital economy, and the development of the digital economy in the future will bring larger technical platforms.
Hengyuanxiang has paid more attention to the digital economy and artificial intelligence and has established a Metaverse Research Institute to create an immersive shopping space.
Regarding low-carbon development, Hengyuanxiang also launched research topics in 2023, including "carbon emission research of woolen knitwear."
"Europe and the United States are promoting carbon emission and carbon footprint certification for textiles and clothing, and the situation faced by the domestic textile and clothing industry is actually quite severe.
This means that clothing that does not meet emission standards may not be able to enter the market in the future."
It is understood that Hengyuanxiang's research has conducted a full analysis of the carbon emissions of clothing products, and the next step will be to launch new research topics, conduct a full industry survey, actively participate in the construction of China's textile and clothing carbon emission standards, and avoid the impact of future carbon tariff barriers.
In the field of the aesthetic economy, which is seen as more "elusive" by the outside world, Hengyuanxiang has actually gone quite far.
In 2020, Hengyuanxiang co-founded the Lifestyle Design Committee with the Chinese Academy of Art Research and the Chinese Society for the Anthropology of Art.
Its main task is to explore the future lifestyle needs of Chinese and global consumers.
"The committee has many experts, including those in design, anthropology, art, as well as some designers, enterprises, and media representatives," Chen Zhongwei introduced.
The committee has built a "five-in-one" platform, where committee experts are responsible for creating theories, artists transform theories into artistic expressions, designers convert theories and art into consumer lifestyles, enterprises turn them into products that consumers can see and touch, and the media can tell and popularize this lifestyle to consumers.
This year marks the 60th anniversary of the establishment of diplomatic relations between China and France.
Hengyuanxiang also hired Chinese and French artists in 2023 to jointly design related products and participate in the Sino-French Brand Forum, which also brought shock to Chen Zhongwei.
"In the exchange with French brands, the most impressive thing is inheritance.
Brands need to innovate in inheritance and inherit in innovation, rather than blindly emphasizing innovation.
Without inheritance, they lose their soul," said Chen Zhongwei.
Hengyuanxiang has hired an international consulting agency to sort out the 97-year history of Hengyuanxiang, extract the brand's DNA, and become the foundation for better inheritance of Hengyuanxiang in the future.
Undoubtedly, whether it is low-carbon, digitalization, or the aesthetic economy, it is difficult to bring visible benefits to Hengyuanxiang in the short term, but Chen Zhongwei believes that this is the future of the enterprise.
"Building a brand will not be achieved overnight, Chinese brands will also be world brands, and consumers are different from the past, and they can no longer use past experiences and methods for layout."
Chen Zhongwei said that in Hengyuanxiang's strategic development report in 2000, it was proposed to be careful that past experiences become the main reasons for future failures.当然可以，请提供您需要翻译的内容。
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