Behind the 'backlash' of Fuyanjie's disrespectful marketing, how much further can Renhe Pharmaceutical's branding strategy go?

*Article by Spades and Longswords

Due to a 'marketing misstep' involving its Fuyanjie series of cleansing solutions, listed company Renhe Pharmaceutical has been embroiled in a public opinion storm.

The incident began just a few days ago. On May 17, some netizens reported that an advertisement for a 'Hyaluronic Acid Rose Nourishing Cleansing Solution' sold by Fuyanjie's official flagship store on Taobao contained content offensive to women, such as 'I’m getting darker, what should I do?' and 'Wash for a youthful pink complexion.' Once the news broke, it immediately triggered widespread online criticism. Many netizens questioned that pigmentation is a normal occurrence, yet the ad copy was riddled with disrespect and prejudice against women.

In response to the public outcry, Renhe Pharmaceutical reacted quickly. By around 5 PM that afternoon, the controversial product had already been removed from shelves. The company also publicly stated that it 'highly values' the matter and 'humbly accepts' all criticisms directed at Fuyanjie. Concurrently with removing the product, the company established a special task force to thoroughly investigate internal processes.

However, the subsequent exposure of some statements made by Fuyanjie's customer service reignited the emotions of netizens that had once been calmed—according to chat records, some store customer service representatives were subjected to cyberbullying due to 'malicious marketing by certain bloggers,' and many overzealous fans caused customer service staff to be abused. Many netizens felt that Fuyanjie was presenting one face publicly and another privately.

In fact, as a major brand specializing in women's hygiene products, this is not the first time Fuyanjie or Renhe Pharmaceutical has been embroiled in incidents deemed offensive to women. In 2016, Fuyanjie printed a promotional slogan on its wash product gift box: 'I cannot wash away your past, but I can clean up your future.' At that time, critics questioned whether Fuyanjie was objectifying, discriminating against, or even insulting women by implying their 'past' was something undesirable.

This is closely related to Renhe Pharmaceutical's long-standing marketing tradition; however, prior to 2016, Renhe Pharmaceutical’s marketing strategies often yielded positive results rather than public outrage.

Rewinding back to 1998, Yang Wenlong, the founder of Renhe Pharmaceutical, established Kangmei Pharmaceutical and Health Products Co., Ltd. in Jiangxi, which became the precursor to Renhe Pharmaceutical. Considering the market already had brands like Jier Yin and Fuyin Jie, Yang Wenlong took an unconventional approach, planning to carve out a niche through aggressive marketing.

In 2003, he invited Fu Disheng and Ren Jing, the couple who gained fame through the song 'Soulmate,' to become advertising spokespersons. Later, celebrities such as Ruby Lin and the band Phoenix Legend were also hired as endorsers for the company.

On the path of advertising and marketing, Renhe Pharmaceutical initially achieved great success, with distinct slogans effectively building the reputation of its products. For example, for the children’s cold medicine 'Youkadan,' Renhe Pharmaceutical enlisted Song DanDan, who starred in the TV series 'Home With Kids,' with the slogan 'For a family with kids, keep Youkadan at hand.' During the peak popularity of 'Home With Kids,' Renhe Pharmaceutical's promotional strategy proved highly effective. Additionally, the now-familiar slogan for Fuyanjie, 'Wash for better health,' also originated from that period.

As its reputation grew, Renhe Pharmaceutical’s products such as Youkadan, Fuyanjie, Shining Eye Drops, and Keli Ke generated significant revenue. According to annual financial reports, Renhe Pharmaceutical’s revenue was only 779 million yuan in 2007, but by 2011, it had skyrocketed to 2.208 billion yuan; correspondingly, its marketing expenses also rose to 388 million yuan.

Since then, Renhe Pharmaceutical's marketing expenses have consistently remained above 10%, and this trend continues to the present day. On the other hand, its R&D expenditure has been minimal; even in 2021 (the year Renhe Pharmaceutical invested the most in R&D), its R&D costs were only 50 million yuan, less than one-tenth of its sales expenses.

'The company is an OTC (over-the-counter) enterprise, not a new drug enterprise.' This has always been Renhe Pharmaceutical's self-positioning. As an OTC enterprise, there is little reason for Renhe Pharmaceutical to focus on R&D. After all, most OTC companies prioritize marketing. For instance, Jin Sangzi, a Guangxi-based throat lozenge brand that gained popularity around the same time as Renhe Pharmaceutical, similarly relied on advertisements and celebrity endorsements to boost recognition before eventually entering the secondary market with steadily growing performance. If robust marketing alone could achieve all this, what would be the necessity of heavy investment in R&D?

However, times have changed. With the implementation of the revised Advertising Law in 2015, celebrity endorsements for pharmaceutical advertisements were abruptly halted. OTC pharmaceutical companies such as Xiuzheng, Kuihua, and Jiangzhong could no longer rely on television ads to bolster their image. The era of blockbuster products created through heavy ad spending has become a thing of the past. Meanwhile, Renhe Pharmaceutical’s products have been repeatedly embroiled in safety controversies since 2011, with flagship products like Youkadan, Shining Eye Drops, and Keli Ke all having faced such challenges.

This has forced Renhe Pharmaceutical to consider reform, but given the long cycle required for developing new drugs, it is difficult to alleviate concerns about its core business in the short term. Renhe Pharmaceutical has chosen the OEM route, using a massive number of private-label products and a nationwide dealer network to compensate for losses.

While such actions have, to a certain extent, propped up Renhe Pharmaceutical's current standing, the extremely low barrier for private-label medicines and care products is eroding its brand power. Coupled with repeated marketing missteps in recent years, it remains uncertain whether Renhe Pharmaceutical can find its own path forward.

*Images sourced from Yandex and the company's official website.

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