Longrich was executed behind 600 million yuan: without waiting in the live broadcast room, some dealers said that it was difficult to recover the cost

Time Weekly

2024-06-30 17:30Times Weekly official account

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01Longrich, a veteran domestic brand, recently added 1 piece of information on the person subject to execution, with an execution amount of about 609 million yuan, which attracted attention from the outside world.

02Due to the low price and long repurchase cycle, some Longrich dealers said that their profits were low and it was difficult to recover their costs.

03In order to find a new growth track, Longrich began to embrace live broadcast e-commerce, inviting well-known celebrities such as Hua Shao and Ma Yili to enter the live broadcast room.

04However, Longrich's performance in the live broadcast channel was mediocre, with nearly 3,000 new fans in the past 30 days, and a total GMV of 2.5 million yuan ~ 5 million yuan.

05Experts believe that Longrich needs to continue to strengthen and optimize its investment in live broadcast channels, update and iterate products, and strengthen the marketing of offline business.

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Source of this article: Times Weekly Author: Ye Manzhi

Source: Picture Worm Creative

The old domestic brand has fallen into turmoil again.

A few days ago, Jiangsu Longrich Group Co., Ltd. and its subsidiaries added 1 piece of information on the person subject to execution, with an execution amount of about 609 million yuan. The news has caused concern about this well-known daily chemical brand, and some netizens have called on consumers on social media to "wild consumption".

Longrich has been going uphill for a long time. According to Southern Metropolis Daily, Jiemian News and other media outlets, citing insider information, in 2023, Longrich founder Xu Zhiwei was rumored to be released on bail by the Suzhou police; In February of the same year, Longrich was on the hot search due to the withdrawal of the Guangzhou branch.

Founded in 1996, Longrich was once known as the "Light of China", and its snake oil series products carry the memories of the post-80s and post-90s generations. At its peak, Longrich sold 7 billion yuan a year, and was once regarded as a rival by the global daily chemical giant Procter & Gamble.

With all kinds of negative turmoil, Longrich's sales were not as good as before.

A number of Longrich dealers told Times that although snake oil ointment, hand cream and other products still have good reviews, their profits are often low due to their low prices and long repurchase cycles. After being caught in public opinion turmoil many times, it is even more difficult to move sales.

"I don't have any more stock now, and I plan to do it again after emptying my inventory." Some dealers said bluntly.

In order to find a new growth track, Longrich changed its marketing model of "offline is king" and began to embrace live streaming e-commerce. As early as 2019, Longrich entered the live broadcast to bring goods, and invited well-known stars such as Hua Shao and Ma Yili to enter the live broadcast room. At present, the Douyin account of "Longrich Skincare Flagship Store" has 700,000 followers. According to Gray Dolphin data, during the past June 18 period (May 24 to June 18), the daily GMV of the account was mostly maintained at 100,000 yuan ~ 250,000 yuan.

With the decline of offline advantages and mediocre online response, can Longrich break through the encirclement and regain its past glory? In response to questions about online layout planning, offline development status and the company's operating conditions, the Times reporter sent an interview letter to Longrich in the form of an email, but as of press time, no reply has been received.

It has become difficult to recover the cost, and some offline dealers have cleared the goods online

In recent years, with the rise of many domestic brands, Longrich's brand appeal has gradually declined.

At the beginning of 2017, Jiang Jun became a distributor of Longrich's direct selling business. He told the Times that Longrich's traditional business and direct sales business are not the same pallets, and the product pricing is also different. From the perspective of product sales profit margin, the traditional business is about 2%~3%, and the direct sales business is above it.

Unlike traditional businesses that rely on offline retail sales such as physical stores and supermarkets, direct sales rely more on multi-level distribution channels, and Longrich distributors can directly promote products to consumers, eliminating the need for intermediate links.

He told the Times reporter that in the three years since he became a Longrich distributor, he has invested nearly 160,000 yuan in franchise and purchase, excluding costs, and made a net profit of 50,000~60,000 yuan. ”

A number of Longrich dealers told the Times that Longrich is taking the popular route, adhering to the low-price strategy, and hoping to gain market scale with "small profits but quick turnover". This strategy once laid the foundation for Longrich's development, but in the long run, the profit margins of the products were squeezed, and the dealers' business became more and more difficult, and "it was difficult to recover the cost".

In order to quickly empty inventory, some offline dealers have started to sell goods online. A reporter from Times Weekly found that some Longrich distributors sold products on social platforms, and even "poured products" into the hands of daily chemical retailers for secondary resale.

However, the Times reporter learned from two Longrich related people that the sales channels of dealers are offline channels, and individuals are not allowed to sell products on the online platform on their own, and the sales network of online and offline channels is not connected.

In response to this phenomenon, the reporter of the Times Weekly asked Longrich about the company's countermeasures on the grounds of consulting franchise dealers, and said: "We now have a third-party anti-counterfeiting agency and a price control agency to intervene (in the above situation). ”

walked into Li Jiaqi's live broadcast room, and did not usher in "splashing wealth"

With the rise of the short video and live broadcast industry, many domestic brands have ushered in "wild consumption", and Longrich has also focused on live broadcast e-commerce.

As early as 2019, Longrich entered the live broadcast to bring goods, and invited well-known stars such as Hua Shao and Ma Yili to vigorously promote Longrich in the live broadcast room. According to the "Tianwu Journal", Xu Zhiwei's single live broadcast GMV once reached one million yuan.

The Times reporter noticed that Longrich only opened self-broadcasting on the two major live broadcast platforms of Douyin and Kuaishou, and opened a brand matrix account on the Douyin platform.

In addition to self-broadcasting, Longrich has also cooperated with Internet celebrities to bring goods, and its products have also appeared in the live broadcast rooms of top anchors such as Simba and Li Jiaqi many times.

The reporter of the Times Weekly, as a self-media expert, learned about the situation from the relevant people in charge of Longliqi's broadcasting sector, and the other party introduced to the reporter of the Times Weekly that Longrich's Dabo team has been established for five years, mainly cooperating with anchors and influencers on Douyin, Kuaishou, Channels and Taobao platforms. The company will allocate personnel according to different live broadcast platforms, and each live broadcast platform has 5~6 people responsible for business docking with Internet celebrities.

The above-mentioned person also revealed that Longrich will provide fixed pallets for co-hosts, and settle commissions through the platform, and the commission settlement ratio is generally between 20%~30%, "There can be dozens of signed influencers on the whole platform every day. ”

However, from the perspective of market effect, Longrich has not ushered in "pouring wealth" like other domestic brands.

At present, the Douyin account of "Longrich Skincare Flagship Store" has 700,000 followers, which is the highest number of followers among the matrix accounts on all platforms. According to Gray Dolphin data, as of press time, the account has added nearly 3,000 fans in the past 30 days, with a total GMV of 2.5 million yuan ~ 5 million yuan.

In addition, in the 6.18 period officially announced by Douyin this year, Longrich's self-broadcast results were mediocre. Taking the above-mentioned Douyin account as an example, Gray Dolphin data shows that from May 24 to June 18, the daily GMV of the account was mostly maintained at 100,000 yuan ~ 250,000 yuan, which was basically the same as the GMV of live streaming during the non-major promotion period, with no significant growth. According to the data of the 6.18 battle report of Douyin Mall, Longrich is also not seen in the top 10 of the daily care list.

The "standard king" scenery is no longer there, and the old domestic products are waiting for new machines

Before being caught in many turmoil, Longrich also had a glorious time.

In the 90s of the last century, Longrich became popular all over the country with its snake oil series products, and Xu Zhiwei became the "King of Chinese Snakes". In order to expand the brand's momentum, Longrich invested heavily in marketing, not only inviting popular stars such as Chen Kun, Ma Yili and Tong Dawei to become brand spokespersons, but also winning the "Standard King" of CCTV's advertising department for three consecutive years.

In 2008, Longrich ushered in a highlight moment, with annual sales exceeding 7 billion yuan, and once became the best snake oil brand in China.

When it comes to the reasons for joining Longrich in the past, many dealers invariably mention that they are interested in the quality of its products and brand reputation.

"At that time, Longrich always advertised, and hand cream, snake oil ointment, and other washing and care products were also very popular, and selling products at least in those days could at least pay off." A dealer who has been working at Longrich for 8 years said.

Jiang Jun recalls that when he first joined Longrich, he had a large internal dealer team and a large scale of the company, and he felt a sense of pride every time he went to participate in the company's offline training. "It really started at the time, and then it started to go downhill." He sighed.

However, in recent years, Longrich products have failed to pass many random inspections, and it has been revealed that the advertising effect does not match the actual results of the products, and the public's trust in Longrich has begun to waver.

In Jiang Jun's view, Longrich has not regained its former glory mainly because the company has "taken too big a step" in the development process and there are problems in its operation and management model. Some dealers believe that Longrich "burned too much money" in advertising in the early years, and the capital chain was under too much pressure, which increased the company's operating load. On the other hand, Longrich has no shortage of SKUs, but what really comes out are products such as hand cream, snake oil ointment, and toilet water with low gross margins, and "the profit margin is too low".

In an interview with Times Weekly, Feng Jianjun, a daily chemical expert, said that Longrich's decline is not only due to the single brand product line and the lack of youthful innovation, but also to the company's failure to maintain offline channels represented by pharmacies.

"In the later stage, Longrich's categories are small, which cannot support the operating expenses of the main channel, and since it focuses on solving skin problems, it should grasp the cosmeceutical channel." Feng Jianjun believes that the live broadcast channel has become one of Longrich's main sales channels, and the company should continue to strengthen and optimize its investment in the live broadcast channel if it wants to activate the brand. "In addition, it is also important to update and iterate products and continue to strengthen the marketing of offline business."

Longrich's brand name in English is "Longrich", which translates to "long-term prosperity and long-term stability", which expresses Longrich's ardent expectations for its future development. However, looking back on Longrich's ups and downs in the business world, this veteran domestic product has faced public opinion turmoil several times in the past 38 years. Between the brand vision and reality, Longrich still needs to overcome multiple obstacles.

(At the request of the interviewee, Jiang Jun is a pseudonym)

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