A recent livestreaming scandal involving Haihe Dairy, a venerable name in China’s dairy industry, has exposed a growing rift between legacy brand identities and the chaotic reality of modern digital distribution. The controversy erupted when consumers, believing they were purchasing from an official brand outlet, encountered unprofessional conduct in a livestreamed session, prompting a public apology from the Tianjin-based firm. While the company blamed a third-party distributor, the incident highlights a systemic vulnerability for 'Time-Honored' brands trying to scale rapidly across China’s e-commerce landscape.
Haihe Dairy, established in 1956 through the socialist transformation of Tianjin’s dairy farms, has spent decades as a regional staple. Under the recent leadership of Zou Yang, a biotech PhD from Tianjin University, the company pivoted from basic fresh milk to a high-growth strategy focused on flavored milks. By 2024, Haihe had successfully leveraged these products to achieve a national market-leading position in the flavored milk category, covering 95% of Chinese cities. This expansion, however, relied heavily on granting third-party e-commerce entities the right to operate 'flagship' stores on platforms like Douyin and Tmall.
The convenience of delegating digital sales to agile middlemen has created a 'reputation arbitrage' problem. On platforms where consumers are presented with a dizzying array of 'Official' and 'Authorized' tags, the distinction between the manufacturer and the store operator is often invisible. In this instance, two different 'flagship' stores for Haihe were managed by separate e-commerce firms from different provinces. When a distributor-run livestream fails, it is the 70-year-old brand name that bears the brunt of the consumer backlash, rather than the anonymous logistics firm behind the screen.
This crisis arrives at a precarious moment for the Chinese dairy sector. Recent data from NielsenIQ indicates a sharp divergence in the market; while offline dairy sales saw a precipitous 22.3% drop in early 2026, online channels continued to show resilience and growth. For regional players like Haihe, the internet is no longer just a supplementary sales channel but the primary battlefield for survival. This shift forces a reckoning for old-school management: they must master the granular details of digital governance or risk seeing their historical prestige eroded by the very partners they hired to grow it.