An online store devoted to promoting historic Beijing brands sells everything from Peking Roast Ducks to traditional Chinese medicine (TCM), and probably can have it all delivered, as well.
Laozihao Eshop (lzheshop.cn) sells goods from 108 historic Beijing brands and 45 enterprises that were established as long as 100 years ago. Food makes up 80 percent of the products sold on the online store. Among the historic brands it offers are Quanjude Peking Roast Duck, Tongrentang Chinese Medicine and Daoxiangcun cakes and treats.
"The eshop is a low-cost channel for expansion and distribution, compared to building outlets," said Cai Jiayi, vice general manager of Laozihao Eshop. "It covers the nation and helps the historic brands expand outside Beijing."
"Roast ducks in Guanzhou are different," said Li, who used to live in Beijing but now works in Guangzhou. "I never thought I could buy a Beijing roast duck in Guangzhou."
This e-commerce site was developed by the Beijing Traditional Brands Association (BTBA) and is supported by the Beijing Municipal Commission of Commerce.
BTBA, a nonprofit organization founded 3 years ago, works to develop the brands, communicate their traditional value, and help them meet the challenges of economic reform. It communicates and coordinates between the government and historic enterprises, and facilitates experience sharing among entrepreneurs.
The historic enterprises pay nothing to enjoy the brand exposure, product display, consumer services, and events offered by the eshop.
Before the founding of the PRC, many historic enterprises were private companies or family businesses. After the founding of the PRC, they became State-owned enterprises (SOEs), subject to the central government's planned economy. Now, these SOEs are in a consumer market and must forge competitive strategies for the market economy.
About 160 historic Beijing brands are still operating, although only a few remain well-known. To expand outlets requires capital, and the majority of the historic enterprises are small and medium enterprises (SMEs) that seldom have abundant cash flows. The Morning Post reported earlier that Yushanfang, a Beijing historic restaurant, won a Qianmen Avenue storefront bid at a monthly rental of 1,800 yuan ($264) per sq m.
In an attempt to gain capital and technologies, Beibingyang (meaning the Arctic Ocean) entered into a joint venture with Pepsi in 1985. Unexpectedly, the Beibingyang brand was shelved, and the joint venture produced Pepsi only. Years later, this well-known carbonated soft drink brand, produced since 1936, disappeared and the joint venture finally turned to bankruptcy.
Quanjude, a SOE operated by the Beijing municipal government, has been listed on the Shenzhen Stock Exchange since 1994. Tongrentang went onto the Shanghai Stock Exchange in 1997 and the Hong Kong Stock Exchange in 2000.
"There are government funds for historic enterprises and SMEs-targeted funds. And some regulations and rules are introduced to support historic enterprises, especially those in reform," said Jiang Junxian, president of BTBA and the president of China Quanjude (Group) Co. "The government funds may cover research expenses in key projects, and even pay consulting firms to take care of new product designs, and brand images."
An iResearch report said 86 percent of the online shopping population in the first half of 2009 is between 16 and 35 years old. "A younger group of consumers who get used to shopping online are now covered by Laozihao Eshop," Cai said. "They have limited knowledge about historic brands. The site will communicate the brand value to them, and trigger sales."
The eshop has realized nearly 8,000 transactions since it was founded in May.
Qi, a university student from Beijing International Studies University, liked the convenience of eshopping. "I will get some Tongrentang TCM. No more spending one hour in traffic," she said.
