The transformation of traditional enterprises into e-commerce has always been a problem, but Nanji people have made a lot of money by relying on “cheats”. According to the 2019 annual report previously released by Antarctic E-commerce (002127.SZ, formerly known as Antarctic People), the company’s total unpaid transaction volume (GMV) in various e-commerce channels reached 30.559 billion yuan, a year-on-year increase of 48.92%
Why is it so profitable? A porter who does not produce goods but only makes tags
When talking about Antarctic people, most people born in the 1980s are deeply impressed. Nanjiren was founded in 1997 and made its debut in the thermal underwear market with the motto of “thinner, warmer and more comfortable”. In the following years, it became popular all over the country with Ge You’s advertising slogan “Antarctic people are not afraid of the cold”. It became a household name through huge advertisements on major TV stations. It is one of the four major thermal underwear brands in the country along with Hengyuanxiang, Beijijing and Yu Zhaolin.
But what many people don’t know is that Anjiren’s business has long expanded from a single thermal underwear to a full range of categories.
Search Tmall and you will find that Nanjiren’s products range from silk quilts, cotton clothes, children’s clothing to hair clippers, hair curlers, children’s cars, diapers… everything. According to reports, its labels have appeared in 55 product lines in 9 categories, including maternal and infant, clothing, kitchen products, footwear, bedding, and home appliances. In addition to the flagship store, it also has official stores, corporate stores, specialty stores, direct sales stores, self-operated stores, factory stores, etc.
How did the Antarctic people become so strong? The answer is somewhat unexpected – none of the products currently on the market bearing the “Antarctic” brand are manufactured by it – the company has completely shut down all product production lines, without a single factory or a single worker.
The vigorous development of Antarctic people benefits from the chemical reaction of “brand licensing” and “e-commerce”. After 2013, Tmall stores adopted an invitation-only system and the application channels were narrowed. E-commerce companies without brand resources can only resort to authorization from brands. In 2015, Nanjiren simply gave up physical retail and direct sales and devoted all its energy to brand licensing. In December of the same year, Nanjiren went public through Xinmin Technology and changed its name to Nanji E-commerce.
According to its 2019 annual report, the company’s revenue was 3.907 billion yuan and net profit was 1.206 billion yuan. Among them, revenue related to brand licensing was 1.305 billion. During the reporting period, the company had a total of 1,113 cooperative suppliers, including about 500 major cooperative suppliers; a total of 4,513 cooperative dealers and 5,800 authorized stores. It is worth noting that in 2019, the gross profit margin of its brand comprehensive service business was as high as 93.36%, which means that almost all of Antarctic e-commerce’s profits come from “OEM”.
But for the thousands of manufacturers who pay for hangtags, can they really get a share of the OEM business and achieve a win-win situation with the brand?
The profit behind the tag is 98 yuan to get the goods, and the price after labeling is 238 yuan
“When it comes to underwear and sweaters, almost everyone knows Nanjiren and Hengyuanxiang. What we buy is not just the tag with the logo printed on it, but the customers accumulated behind the tag.” 2014 , when Qin Yue (pseudonym) put the Nanji Renhe and Hengyuanxiang tags on the products in her factory, she firmly believed that it would be a “win-win”.
Judging from the brand influence at that time, Qin Yue’s decision was well-founded – from “Antarctic people are not afraid of the cold” to “Hengyuanxiang, sheep, sheep and sheep”. 10 years ago, these Brainwashing advertising slogans have probably become the deepest impression that many people, especially young people in first- and second-tier cities, have on these brands.
As a result, many people believe in the influence of trademarks and are willing to pay heavily for it. Among them are not only factories eager to join, but also many individual dealers. The four major warm clothing brands in Shanghai quickly sensed the business opportunities and invariably cut down their production lines and started selling hang tags in a low-key manner.
The “brand authorization” models of these brands are similar. There are mainly two types of cooperative customers. One is the dealer, that is, the cooperative dealer, and the other is the supplier who opens his own factory. . However, the authorization thresholds are slightly different: taking Tmall as an example, Hengyuanxiang factory needs to pay a deposit of 1 million yuan, Antarctic needs to pay a deposit of 100,000 yuan, Yu Zhaolin’s deposit is 50,000 yuan, and Beijijing does not need to pay a deposit.
“For traditional manufacturers like us, we are not competitive on e-commerce platforms, are not good at marketing, and have no idea how to operate online promotion and operations.” Qin Yue told reporters , because the categories it sells are relatively single and the profits are not high, so “if you want to make money, it all depends on ‘volume’. We initially opened an online store with our own brand name, but found that according to the e-commerce…, curling irons, massage sticks and other products.
According to media reports, Antarctic e-commerce can no longer provide brand authorization from JD.com and Taobao due to the increasing requirements of the platform for merchants to enter. Currently, Antarctic e-commerce is trying to transfer its platform and gradually tighten its authorized categories.
Quality problems caused by excessive authorization
In addition to product quality problems, many Antarctic e-commerce stores There are also cases where operators and addresses have changed many times, and 27 companies directly or indirectly controlled have been cancelled. Among them, most of the stores that have changed their names, addresses, or operators have one thing in common – that is, the GMV (gross transaction volume) increased sharply in 2019.
For example, the operator behind the “Nanjiren Duchamp Store”, which ranks seventh in sales on Taobao, is Nantong Huidao Textile Co., Ltd. This company was originally named “Shanghai Dushan Information Technology Co., Ltd.” In January 2019, the company’s registered place was changed from Shanghai to Nantong, and its name was also changed accordingly. “Antarctic Duchamp Store” had only 85 million GMV in 2018. By 2019, its GMV reached 489 million yuan.
The operator of the “Nanjiren Weihao Store” is Nantong Shuozhou Home Textile Co., Ltd., which was renamed from “Shanghai Weihao Industrial Co., Ltd.” before January 2020. The registered address was also changed from Shanghai to Nantong. The Nanjiren Weihao store had a GMV of 29 million yuan in 2018. By 2019, the GMV soared to 282 million yuan.
This inevitably makes people question the authenticity and reliability of Antarctic e-commerce data.
The shortcut to “electric shock” is more like a detour
“Thinking about it now, although the listing did benefit initially, it has been going downhill in recent years. If we persisted at that time Using your own brand as an e-commerce company should be an uphill process over time, and it will also be more conducive to the long-term success of our factory.” Now, Qin Yue once regretted her “short-sightedness” at that time, “The main reason at that time was that I was reluctant to waste human and financial resources. , in the long run, we should actually build our own brand.”
Now, Qin Yue has begun to shift her energy, recruiting professional operations personnel, focusing on building her own brand stores on platforms such as Pinduoduo, ” After all, the sales volume of brand-authorized stores has become increasingly ugly.”
In fact, this road, which many manufacturers regard as an “electric shock” shortcut, may be more like a detour.
“Many manufacturers are trapped by the so-called brand effect. In fact, any cooperation model can succeed in a short period of time. and results are all accurate captures of human nature – manufacturers want to make quick money with the help of brands, but this is not a long-term solution.” Deng Qi (pseudonym), who has worked at Anjiren for many years, told reporters that manufacturers believe that as long as there is a brand effect , they can quickly maximize profits, but they don’t know that if the money they use to buy licenses and bids is used to develop their own brands down-to-earth, they may actually have more long-term benefits in the future.
“After all, in the field of interests, there will be no permanent friends. The relationship between brands, suppliers and distributors is not as friendly and win-win as imagined. In terms of innovation, it is more of a battle of intrigues and intrigues,” Deng Qi said.
Former Coca-Cola Chairman Woodruff once said, “If my factory is destroyed by fire, if there is a world financial crisis, as long as the Coca-Cola brand is there, I will stand up again the next day.”
Indeed, brand has always been a powerful endorsement. For authorized manufacturers, the most important thing in the OEM business is the “brand”. Brand equity is the source of this business model. If the value of the source continues to depreciate, and the accumulated reputation and feelings are continuously consumed, then manufacturers will naturally be left with nothing to do.
After all, this is an era where consumers vote with their feet. If the brand is already in name only, how can a small hangtag that lacks quality assurance make consumers pay? </p
