Tong Ren Tang vs. Tong Ren Tang: A trademark war has doomed the IPO of the lesser-known Tianjin-based TCM brand
Beijing Tong Ren Tang is China’s leading traditional Chinese medicine (TCM) brand, with a history dating back to 1669. Tianjin Tong Ren Tang has a history dating back to 1852, but its IPO has been defeated due to a trademark dispute with its much more famous namesake.
Tong Ren Tang 同仁堂 is one of the most well known brands of traditional Chinese medicine (TCM), and China’s largest producer of TCM. Originally established as a pharmaceutical supplier in Beijing in 1669 by Lè Xiǎnyáng 乐显扬, a physician at the Qing dynasty court of Emperor Kāngxī 康熙帝, Beijing Tong Ren Tang Group 北京同仁堂集团 was established in 1992, and became a fully state-owned company in 2001. The company listed three subsidiaries in Shanghai (1997) and Hong Kong (2000 and 2013), and established a manufacturing base in Hong Kong in 2004. It now claims to have business operations in 28 countries in five continents, serving Chinese communities at home and abroad.
Yet there is another Tong Ren Tang: Tianjin Tong Ren Tang 天津同仁堂 also has a history dating back centuries, and is a brand with no current relation to its more famous Beijing rival. The two brands originated in the same family, but operated separately and without any issues — until Tianjin Tong Ren Tang decided to go for an IPO.
An impossible journey: Tianjin Tong Ren Tang’s attempts to go public
Tianjin Tong Ren Tang was originally a Beijing Tong Ren Tang drug store in the city of Tianjin, but was taken over by Zhāng Yìtáng 张益堂, a son-in-law of the original founder. Zhang then established his own drug store in Tianjin, which served as an agent for Beijing Tong Ren Tang, until Zhang’s store was renamed Tianjin Tong Ren Tang in 1852. Nearly a century later in 1949, the two businesses went in opposite directions: Beijing Tong Ren Tang became a large state-owned conglomerate, while Tianjin Tong Ren Tang became a private enterprise.
In 2002, Tianjin Tong Ren Tang was fully established as a private enterprise with the approval of the Tianjin Municipal Government. In contrast to Beijing Tong Ren Tang’s traditional formulas, ingredients, and wide range of products, Tianjin Tong Ren Tang’s revenue has been almost exclusively based on three patented medicines: treatments for nephritis and chronic glomerulonephritis, blood stasis, and vascular rehabilitation. In 2021, Tianjin Tong Ren Tang had total revenue of just around a billion yuan ($141.90 million), while Beijing Tong Ren Tang had much bigger total revenue of 14.6 billion yuan ($2.07 billion).
Tianjin Tong Ren Tang’s first attempts to go public occurred in December 2015, when the company was successfully listed on the National Equities Exchange and Quotations board, also known as the New Third Board — an over-the-counter (OTC) market for SMEs established in 2013. The company was delisted from the New Third Board in 2017, however, and started preparing an application to list on the main board of the Shanghai Stock Exchange the following year. Yet this attempt was thwarted when the company’s auditing agency was investigated by the China Securities Regulatory Commission, and Tianjin Tong Ren Tang’s IPO was suspended in 2020.
New investor, same failure
In March 2021, reports emerged that a business group controlled by the businessman Zhū Bǎoguó 朱保国 — a prominent investor in China’s pharmaceutical industry with a net worth of 61 billion yuan ($8.65 billion), according to the 2022 Hurun Global Rich List — had acquired 40% of the shares of Tianjin Tong Ren Tang for 724 million yuan ($102.73 million), leaving Tianjin businessman Zhāng Yànsēn 张彦森 as the majority shareholder. In August 2021, when Tianjin Tong Ren Tang submitted its prospectus for a listing on the ChiNext board of the Shenzhen Stock Exchange, the company was immediately sued by Beijing Tong Ren Tang for copyright infringement and unfair competition. Beijing Tong Ren Tang demanded that the company immediately cease using the Tong Ren Tang brand, as well as compensation of 50 million yuan ($7.09 million).
In response, Tianjin Tong Ren Tang claimed in an updated prospectus that, as a producer of prescription drugs, it is not a competitor to Beijing Tong Ren Tang, and that the Tianjin Tong Ren Tang brand was recognized as a “China Time-honored Brand” by the Ministry of Commerce in 2006.
It did no good, however, because on August 30, the Shenzhen Stock Exchange issued an announcement that the IPO application of Tianjin Tong Ren Tang had been terminated.
For the mammoth Chinese TCM brand based in Beijing, there can be only one Tong Ren Tang.
