Beijing Municipal Bureau Of Market Supervision

A few days ago, three pieces of colored cotton kimono and underwear for infants and young children with the trademark of "Antarctica" were notified by Beijing Municipal Administration of market supervision that there was a problem of unqualified ropes. The authorized person of the trademark was Antarctica (Shanghai) Co., Ltd. This is not the first time that Antarctic e-commerce has been found to be unqualified. In fact, in the past five years, in addition to Antarctica, the Antarctic e-commerce brands such as Cartier crocodile and Jingdian Teddy have all failed in quality inspection.

In recent years, with the development of Antarctic e-commerce brand authorization business, some kinds of products with the brand of "Antarctic" are flaunting on the market. From underwear, silk quilt, children's clothing, assault clothing, to electric scissors, curlers, massage sticks, children's cars, etc., as long as the merchants are willing to pay the licensing fee, "everything can be Antarctic.".

However, the quality problems of the whole category of products entitled "the Antarctic" have frequently exposed, which makes this traditional brand focusing on the field of thermal clothing suffer from a Waterloo.

Despite the continuous complaints from consumers about the products of Antarctic e-commerce, they can not stop the "blind running" of the Antarctic people on the road of wealth. In 2019, the battle report of tmall's double 11 Carnival shows that during this period, the Antarctic brand has become one of the 15 brands with sales exceeding 1 billion yuan, with sales of more than 1.5 billion yuan. From the perspective of stock price, the Antarctic e-commerce has been on the rise for several months. According to wind data, the stock price of Antarctic e-commerce rose by 106.59% from April 1 to July 10.

Antarctic e-commerce is one of the successful cases of traditional enterprises transforming into e-commerce. The large-scale brand authorization has won a huge profit space for the traditional textile brands represented by the Antarctic people. However, the corresponding lack of quality assurance monitoring has also brought about brand value overdraft and other problems. The business model of Antarctic e-commerce has been controversial for a long time, which makes people wonder how long such a lucrative business can win and how much brand value of Antarctic people remains?

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The OEM empire of Antarctic E-commerce

"Lying and earning" business with no production but listing

The Antarctic e-commerce, formerly known as the Antarctic people, was founded in 1997. It is one of the earliest underwear enterprises in China and the first to create thermal underwear products. With good product quality and the brand communication strategy of stars endorsing TV advertisements, Antarctica has become a well-known brand in China. In the field of thermal clothing, its sales and market share has always been in the forefront.

In order to find out more consumers who are willing to buy more famous brands in the financial market in 2008, they are willing to buy more famous products in the e-commerce market. After the financial crisis, with the same sense of smell of traditional textile enterprises, Antarctica began a significant transformation, shutting down all its factories and production lines. Most of its offline physical retail channels have also been abandoned. Since then, Antarctica has embarked on the road of no production and only listing, trying to make the brand licensing business to the extreme.

For young e-commerce brands with low popularity, in order to get dividends faster, many businesses begin to wholesale the products of Antarctica offline, and then sell them on Taobao. The brand of Antarctica is gradually popular in the major e-commerce platforms. It's hard to find a brand in Taobao. In addition to underwear, socks and other textiles, you can also find Antarctic brand foot bathtubs, cockroach medicine, halitosis spray and even cream stickers.

By the end of 2015, Antarctica will use Xinmin technology to land on the small and medium-sized board and change its name to "Antarctic e-commerce". Today, after one acquisition, the Antarctic e-commerce company has owned other brands besides Antarctica, such as Cartier crocodile, Jingdian Teddy, and Antarctica optimization, providing authorized services for partners with different brand positioning. The 79 yuan jeans will be sold for 129 yuan in the exclusive shop of Antarctica. The target profit is 8 yuan, and there is still 42 yuan.

According to IC lab, 1.5 million to 2 million "brand service fee" can be used to buy a tmall store with the name of a Antarctic. Antarctic e-commerce will draw 3% - 6% of the Gmv (total transaction volume) of each store every year. In addition, the Antarctic will also get a set of "label use fee" from the white brand businesses with the Antarctic tag. Judging from the current financial report data of Antarctica, the gross profit margin of brand authorization is as high as 93%, even surpassing Maotai.

During this period, the cost of selling "sweet pot" and "hanging pot" only reduced because of the "sweet pot" and "hanging pot" mode. According to the 2019 financial report data, there are 1113 cooperative suppliers, 4513 cooperative distributors and 5800 authorized stores. Brand licensing alone will make the company 1.3 billion in 2019, accounting for 33.2% of the company's revenue.

In the view of Cheng Weixiong, an expert in textile and garment brand management, this is not a business model that can prosper for a long time. The brand value of Antarctica is decreasing under this mode. "Only focus on short-term interests, not long-term interests. To some extent, its existence is a squeeze on the industry, which is bad money driving out good money."

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The mode alienation of brand authorization

The "ceiling" of the tag business is gradually emerging

Brand licensing originated in the United States and has developed into a global industry. As the originator of brand authorization, Disney has a set of strict audit mechanism. In order to become a Disney certified factory, it is necessary to go through the strict Disney Fama (production facility commodity authorization) inspection process, including providing attendance records, payroll, labor contract, etc. in the past year. In addition to the excellent audit mechanism, Disney also sets a high threshold for licensors. In addition to the authorization deposit of hundreds of thousands of dollars, Disney also requires more than five years of industry experience in manufacturing, distribution or retail.

Since 2008, Antarctic e-commerce has designed a business model of "supply chain and e-commerce service based on brand authorization" in order to solve the problem of overcapacity of traditional enterprises. This mode not only retains the core value of the Antarctic brand, but also realizes the accurate allocation of market, goods and people and the reasonable division of resources, upgrading from single clothing brand operation to industrial ecological service. With the promotion of the model, more and more partners join the Antarctic e-commerce, and quality problems follow. The phenomenon of "selling dog meat with sheep's head" is common.

According to the statistics of the "black silk products" of China National Press and China Southern Newspaper, all the products failed to be listed in the "black silk clothing inspection list" by China National Press and China Southern Newspaper for 10 years. In March 2020, according to the disclosure of "the list of unqualified products and enterprises in the second batch of online products quality national supervision special spot check in 2019" issued by the Quality Supervision Bureau, the luggage produced by Antarctic e-commerce (Article Number: c487811011) also appeared on the list.

Obviously, the quality control of Antarctica is not in place. According to the southern weekend report, although before selling the bid, the Antarctic will ask manufacturers to provide product quality certificates, but these certificates can be bought on Taobao for 100 yuan. Many dealers who sell the subject matter will buy the tag of the Antarctic in the name of the factory, and then sell it to small manufacturers. After the small manufacturer pastes the tag, it will be handed over to the dealer for sale. It is more difficult for Antarctica to spend energy on strictly controlling and tracking product quality.

In addition to the hard damage of quality control caused by the unequal product quality and brand volume, the development space of cross-border brand authorization remains to be seen. Antarctic e-commerce wants to achieve business growth by expanding the categories of authorized products, such as licensing small appliances such as massage chairs, foot basins and electric fans, which are not highly concentrated in the industry and have few brands. However, the cross-border products with high durability requirements, including electrical appliances, often have a long production time span and low turnover rate, and need to provide high-quality logistics, door-to-door installation and other after-sales services, which are not the advantages of the Antarctic people.

At the same time, the business in the South needs to pay attention to in 2019. The year-on-year growth rate of revenue and net profit began to decline significantly, and the main business expansion speed of Antarctic e-commerce slowed down significantly. The reason is that, on the one hand, the market of brand authorization in China may have been saturated; on the other hand, due to the "quality control failure" of the Antarctic, the price of the brand's full category expansion bonus is the decrease of customer recognition. Various factors lead to the market demand for Antarctic brand is not as strong as in the past.

As a matter of fact, Antarctica is not the first enterprise in China to abandon factories completely and implement brand authorization strategy instead. Heng Yuanxiang, Yu Zhaolin, and Arctic velvet have also made the business of hanging cards prosperous. They are called "the four big demons of the labeling universe" together with the southerners. In addition to the textile industry, well-known brands such as Adidas, Nike and puma have also started the light asset mode of brand authorized operation. They focus on the product categories that the company is good at and overcome the problem of quality control while achieving profits. It can be seen that the fault lies not in the brand authorization, but in a "alienated" brand authorization mode.

Lu Pengfei, a senior e-commerce industry observer, said, "at present, many local brands have relatively extensive authorization modes, and the brands do not have a large premium in the market. They still focus on price war. There is the situation of overdraft of brands to obtain profits, which eventually leads to the decline of brand value. Local brands should learn from the harsh management of foreign capital on brand authorization. For example, it is required that authorized enterprises must have certain brand cultivation capabilities, rather than focusing on short-term profits. "