Is it a false proposition for pharmaceutical companies to enter the beauty industry?

Recently, the National Enterprise Bankruptcy Reorganization Case Information Network shows that the First Intermediate People\'s Court of Beijing issued the Civil Ruling (2026) Jing 01 Qing Shen 240, ruling to accept the application for compulsory liquidation of Beijing Tongrentang Cosmetics Co., LTD. (hereinafter referred to as \"Tongrentang Cosmetics\").

The applicant is none other than the controlling shareholder of Tong Ren Tang Cosmetics - China Beijing Tong Ren Tang (Group) Co., LTD. (hereinafter referred to as \"Tong Ren Tang Group\").

This means that this is not a passive market clearance but an \"internal clean-up\" initiated by the parent company on its own initiative. This time-honored pharmaceutical company with a history of over three hundred years is now making a bold move into its cosmetics business.

The beauty business strategy of a century-old brand

The \"Tong Ren Tang\" brand was founded in 1669 (the eighth year of the reign of Emperor Kangxi of the Qing Dynasty). Since 1723 (the first year of the reign of Emperor Yongzheng of the Qing Dynasty), it has been providing imperial medicine to the Qing palace for eight emperors for a total of 188 years.

In 1992, the Beijing Tongrentang Group Corporation of China was established and was restructured into a wholly state-owned company in 2001. It has formed five major business sectors, with the pharmaceutical industry as the core and health and wellness, medical care and elderly care, commercial retail, and international pharmaceuticals as the support.

Cosmetics are not the main business of Tong Ren Tang, but it has also ventured into some areas, mainly focusing on two main entities:

In 2001, Tong Ren Tang Technology, a listed company under the Tong Ren Tang Group, jointly established Tong Ren Tang Mai Er Hai with Hong Kong Mai Er Hai. At present, the company is held by Tong Ren Tang Technology with 45%, Tong Ren Tang Chinese Medicine with 30%, and Jian Zhi Jia with 25%. It operates brands such as \"Tong Ren Tang\", \"Ben Cao Zhi Yue\", \"Ji Ben Dao\", and \"Fa Zhi Ziran\".

In 2005, Tong Ren Tang Group established Tong Ren Tang Cosmetics in a joint venture with Hong Kong\'s Guoxing Group. Tong Ren Tang Group, as the controlling shareholder, holds 51% of the shares, while Hong Kong Guoxing Group holds 49%. This company has launched brand products such as \"Tongren Bencao\", \"Yizhuang\", \"Liyanfang\", \"Pailang\" and \"Jiabao Le\".

Take a screenshot from the official website of Tong Ren Tang Group

With two main bodies, nearly ten brands and over two decades of time, it can be seen from the investment that Tong Ren Tang is truly dedicated to the beauty industry. However, the problem lies in that the parallel operation of multiple entities and the expansion of multiple brands do not lead to economies of scale but rather unclear positioning and scattered resources.

In contrast, in recent years, almost all the domestic brands that have truly emerged have followed the \"blockbuster product penetration\" strategy: Peraera has relied on its dual anti-disease essence, Winona on its special care cream, and Kefumei on its collagen bars, using a clear mindset to drive the entire brand. Tong Ren Tang took the opposite approach, diversifying its efforts with over ten brands and launching a multi-line offensive, which ultimately led to multiple lines of losses.

Why was it subject to compulsory liquidation?

Nowadays, the fact that Tong Ren Tang Cosmetics has reached the stage of compulsory liquidation is not a sudden collapse overnight, but a concentrated outbreak of problems accumulated over the past two decades.

The first predicament: Brand recognition has not been established

For more than two decades, Tong Ren Tang cosmetics have never developed an independent brand image. It is neither a representative of functional skincare, nor a benchmark for herbal skincare, nor a pioneer in a certain niche market. The three characters \"Tong Ren Tang\" have given it a large enough signboard, but the signboard itself cannot replace brand building.

The second predicament: The chaos of OEM and licensing

What is more fatal than the absence of a brand is the continuous depletion of its value. In recent years, the chaos of OEM and authorization of the \"Tong Ren Tang\" brand has frequently raised consumers\' doubts, among which there are no shortage of quality issues. In 2022, the National Medical Products Administration announced 50 batches of non-compliant cosmetics. The \"Tong Ren Tang Plant Essence Hair Repair Mask\", which was labeled as produced by Beijing Tong Ren Tang Cosmetics Co., LTD., was found to contain non-compliant ingredients such as methyl chloroisothiazolinone.

The third predicament: Sales data continues to collapse

Third-party e-commerce data shows that in 2025, the sales of Tong Ren Tang\'s beauty-related products on mainstream e-commerce platforms (Taobao + Tmall + JD.com + Douyin) were approximately 930 million yuan, a year-on-year decline of nearly 45.6%. In the first seven months of 2026, sales further shrank to 307 million yuan, a year-on-year decline of 50.5%. The continuous halving decline is not a cyclical fluctuation but a structural recession.

Meanwhile, Tong Ren Tang Group began to tighten brand licensing. According to the 2025 financial report of the listed company Tong Ren Tang Co., LTD., the trademark and business name \"Tong Ren Tang\" belong to the Tong Ren Tang Group, and the relevant subsidiaries are required to pay brand usage fees in accordance with the agreement. In 2025, the brand usage fee of Tong Ren Tang Co., Ltd. was 35.5794 million yuan, compared with only 8.9623 million yuan in the previous year. Within one year, the brand usage fee increased nearly threefold.

This was originally a defensive move by the parent company to protect the brand, but for the licensee, it turned out to be a sudden increase in cost.

Has Tong Ren Tang given up on beauty products?

However, the forced liquidation of Tong Ren Tang Cosmetics does not mean that the Tong Ren Tang Group has withdrawn from the beauty industry.

Specifically, the company that was liquidated was the joint venture directly under the group - Tong Ren Tang Cosmetics. Its cosmetics business also includes Tong Ren Tang Mai \'er Hai and the Meikang branch of Tong Ren Tang Technology, which was newly established in February 2026.

It is learned that Tong Ren Tang Technology has clearly put forward the \"One Core, Two Wings\" strategy in recent years - taking traditional Chinese patent medicine as the core of its main business and beauty and personal care as well as the big health industry as the two wings. This means that, at least in terms of strategic expression, beauty products remain a direction that the Tong Ren Tang system is reluctant to give up.

But the problem is that over the years, the cosmetics business within the Tong Ren Tang system has been scattered among multiple entities - Tong Ren Tang Mai \'er Hai, Tong Ren Tang Cosmetics, etc. - with multiple entities running in parallel, unclear positioning and scattered resources. Now, if one is cut off, can the remaining ones survive well?

Nowadays, it seems that Tong Ren Tang Group\'s layout in the cosmetics sector is like a piece of chicken rib - tasteless to eat but hard to throw away. For Tong Ren Tang Group, what needs to be seriously considered is: Does it really have the ability to do beauty products? How to build brand awareness? How to build an operation system? How can a bestseller come out?

There is no shortcut for pharmaceutical companies to enter the beauty industry

The predicament of Tong Ren Tang is not an isolated case.

According to incomplete statistics from \"Cosmetics Observation\", more than 400 pharmaceutical companies have completed the layout of cosmetics-related businesses so far. However, a review of the 2025 annual reports of over 40 listed or pre-IPO pharmaceutical companies reveals that only a few enterprises such as Fureida, Pianzhaihuang, Yisheng Pharmaceutical, and Harbin Sanlian have separately disclosed the performance data of their cosmetics business segments. The rest of the pharmaceutical companies have disclosed very little or no information about the revenue contribution of their cosmetics business.

This kind of \"collective silence\" itself is a signal - the beauty business of most pharmaceutical companies may not look good.

The logic of pharmaceutical companies venturing into beauty products seems quite self-consistent: they have a solid research foundation, consumers\' natural trust in \"safety\" and \"effectiveness\", and the differentiated advantage of \"pharmaceutical research\" endorsement under the trend of functional skincare. However, logical consistency does not equal commercial feasibility. The reality is that the beauty business of the vast majority of pharmaceutical companies remains in an awkward state of \"having products but no brand, having technology but no market, and having endorsement but no volume\".

Where is the problem?

Consumer decision-making for drugs is function-driven - they will buy if there is therapeutic effect. Consumer decisions regarding cosmetics are driven by emotions and experiences - whether they are good to use, whether they look good, and whether the brand story can touch people.

The research and development advantages of pharmaceutical companies are mainly concentrated in the drug sector. Raw material research and formula technology may not be directly transferred to cosmetics. From the laboratory to the consumer\'s hands, the skincare products are not separated by technical barriers, but by brand barriers and operational barriers.

Consumers will not automatically purchase a pharmaceutical company\'s skin care products just because it can produce good medicine. Brands need to be built independently, and minds need to start from scratch.

Putting the name of a \"pharmaceutical company\" directly on skin care products is not an extension of the brand but an overdraw of it - especially when the product\'s strength fails to meet the brand\'s expectations, the backlash will come even faster. Tong Ren Tang cosmetics are a typical example of such a backlash.

So there is no shortcut for pharmaceutical companies to take when it comes to cosmetics.

This article focuses on aromatherapy and fragrances, combining the latest industry trends to provide practical references for readers who are interested in fragrances.

Source: 品观网 (https://www.pinguan.com/)

This article is reproduced from the original source for information sharing only. If it infringes any copyright, please contact us and we will remove it promptly.

© 2026 CeresMall | www.CeresMall.com