Companies achieve revival through keeping up with the changes

Heng Yuan Xiang

A report released by Alibaba in 2017 has listed wool wear brand Heng Yuan Xiang as the No 1 time-honored brand among the 100 nominated brands in terms of e-commerce development. The next year it was again awarded by Alibaba as the time-honored brand that has sold its offerings to the most overseas markets in 2017－188 countries and regions in total.

But Chen Zhongwei, the company's general manager, has been quoted by Chinese media as saying that the decision to take Heng Yuan Xiang online in 2012, one of the earliest among all time-honored brands, was rather "hasty".

Started in 1927 as an wool import dealer in Shanghai, it was not until eight years later that its founder invested in a factory to produce its own wools, in order to fight against the monopoly of imported goods. In 1987, when the brand was transferred from a State-owned company to a private business, its new helmsman again removed its own production business and focused on sales and marketing by partnering with more than 100 supplying factories in neighboring cities.

Over the following two decades, it achieved robust growth by bombarding consumers across the country with its bold TV commercials. One of its memorable ads, for example, was simply to have a girly voice read the slogan "Heng Yuan Xiang, sheep, sheep, sheep" three times on China Central Television. The shoddy piece, mainly because of limited budget, cost 100,000 yuan, the total annual profit of the brand in 1991, and in return boosted the sales to 3 million yuan the next year, up by more than 50 percent.

Since 2000, however, the competition with Western fast fashion brands and more premium cashmere left it at quite a disadvantage, while the lure of TV commercials was also losing its magic. During the 2008 Beijing Olympic Games, the brand remade its 1991 TV ad piece by expanding it into reading the brand's name and all of the 12 Chinese zodiac animals.

In order to save cost and leverage the power of Alibaba, which the general manager considers as influential as CCTV in the 1990s, it called up its more than 100 distributors and encouraged them to sell online.

In 2017, its annual sales reached 5 billion yuan, with nearly 60 percent coming from online, up by 26 percent.