"Selling Tags" Is Not A Life-Saving "Panacea"

With the help of several trademarks such as "the Antarctic", Antarctic e-commerce is engaged in the business of selling tags and making big money in a shares, which makes many people envious.

With the example of Antarctic e-commerce, many listed companies, such as Aokang international and La chapel, also tried to save the crisis by selling tags when the main business was difficult. The idea is good, the result is not ideal.

Even in the past two years, the Antarctic e-commerce industry has also fallen into a growth bottleneck. Can the business of selling tags in A-shares be easy to do?

All things can be "Antarctica"

Do people who often shop online have such an impression that there are many products of the Antarctic brand on the major e-commerce platforms, which are almost all inclusive.

Imagine a scene like this: when you get home, you take off your shoes, expose your socks, and put on your slippers; Take off the coat and trousers of the Antarctic, which is the underwear of the Antarctic, and change into the Nightgown of the Antarctic. After a hard day outside, you can soak your feet. You can use the foot bath of the Antarctic people and turn over the snacks around you. Inside are the crab roe pot and snail powder of the Antarctic people. You can wash your whole body with the shampoo and shower gel of the Antarctic people. There are bath towels and hair dryers waiting for you. When you come to the bedroom and lie on the bed, what you cover on your body, what you pad under your head, and what you have under your head are the four piece suits of the Antarctic people, quilts and pillows. Wake up and welcome a new day.

In China, there should be no brand that can cover so many categories like Antarctica. The above scenes are just the tip of the iceberg for the products of Antarctica. If you want, the Antarctic can do almost everything in your life.

How does it work?

As a matter of fact, the Antarctic e-commerce enterprises that hold the "Antarctic" brand do not produce any products themselves. Instead, they authorize the brand to dealers to organize product production and open stores on the e-commerce platform.

By 2021, Antarctic e-commerce has authorized 10311 dealers, opened more than 13000 online stores, covering more than 60 product categories. Underwear, home textile, women's wear, children's wear and other categories have been in the forefront of sales on mainstream e-commerce platforms all year round.

This is known to the outside world as the business of selling tags. This business is certainly not the first creation of Antarctic e-commerce, but it is definitely the most skilled one in China. Moreover, it has pushed the company to the capital market.

What is more enviable to the outside world is that the company's brand comprehensive service + dealer brand authorization business, the gross profit margin is more than 90% all the year round, and the average net profit rate is maintained at about 75%. In front of it, Guizhou Maotai can only bow to the wind.

Those who came after came one after another

The Antarctic brand was founded in 1998, initially mainly engaged in autumn clothing and warm underwear and other knitwear. Once upon a time, wearing a set of warm underwear of Antarctica was a big dream of many people in winter.

Its brand awareness is established by a large number of advertising and image spokesmen. Liu Dehua, ge you, Xu Fan, Haiqing and other film and television stars have worn the warm underwear of Antarctica and appeared on the major advertising platforms.

The same period with the Antarctic thermal underwear brands, such as Arctic velvet, Yu Zhaolin, also rely on a huge amount of advertising, competing for market share.

With the appearance of thermal underwear category, many Chinese people take off the bulky trousers in winter. However, with the aggravation of market competition, the profits of major thermal underwear brands are getting thinner and thinner.

In 2008, Antarctica put forward the "brand authorization" mode, closed its own factories, authorized the brand to suppliers and dealers, so that they could produce and sell the products of the Antarctic brand, while the company started the business of "selling tags" with all costs and profits.

Just like the appointment, norpolar, Yu Zhaolin and other brands, like Antarctica, have successively started the business of brand authorization and continue to fight on a brand-new track. Neither Arctic velvet nor Yu Zhaolin are listed companies, so we can't know their specific business situation. But we can be sure that the business models of these two brands are the same as those of Antarctica.

Since it is so profitable to sell hanging cards, there are naturally new participants in the market. Many A-share listed brand enterprises, after encountering difficulties in the traditional main business operation, have also made the idea of selling hanging cards.

Aokang international is a well-known leather shoes manufacturer in China. It has been focusing on shoe making, especially men's shoes, for more than 30 years. In the past two years, on the e-commerce platform, you should not be surprised to buy Aokang brand men's and children's wear.

In December 2019, Aokang international signed an agreement with Hangzhou kangmiba and Wenzhou Xiangye e-commerce companies, authorizing the two companies to sell Aokang brand men's wear, children's wear and children's shoes on the e-commerce platform.

At present, there are flagship stores of Aokang brand for men's wear and children's shoes on major e-commerce platforms, but the sales situation is not very ideal.

In Aokang International's financial report, there is no evidence of brand licensing revenue. It should be that the revenue is negligible.

La chapel, once the "king of stores" in China's clothing industry, at its peak, the total number of its multi brand stores was close to 10000, and all of them were direct sales. The company is also a Chinese clothing industry, an enterprise with "a + H" two listing platforms.

In 2018, the company's revenue exceeded 10 billion for the first time, and then began to decline. Closing stores, opening up to join in, selling land and selling houses can not completely reverse the crisis. In 2020, the company will take the next step of risk and adjust its online business to "brand authorization + operation service", that is, the model of selling tags by the Antarctic.

In 2021, the revenue of La chapel brand authorization business is 60.45 million yuan, with a year-on-year increase of 215%, and the gross profit rate reaches 100%. Does this save the cost of purchasing hangtag?

Before the company could be supported by the brand authorization business, lashabel withdrew from the Shanghai Stock Exchange in May this year.

It's not a life-saving "panacea"

The "fruit" is delicious, but the "tree" is difficult to plant.

The reason why Antarctic e-commerce can do well in this business is that the company has built its brand for ten years. In addition, it has set foot in this industry early, catching up with the dividend period of e-commerce growth. When its products are filled with every corner of e-commerce, it is also a kind of feedback to the brand itself.

Of course, what's more important is that Antarctic e-commerce is actively transforming, completely and thoroughly. After more than ten years of exploration, it has fully grasped the door of brand authorization mode, and has formed a complete system for the selection of distributors and suppliers, as well as the control of supply chain and product quality.

However, Aokang international and La chapel both chose passively when the company was in trouble. Traditional main business can not be lost, brand authorization can not be carried out in a large scale, otherwise, once the distributor's products have any problems, the damage to the brand will be more and more. It's a double-edged sword that's hard to control.

Even senior players in the Antarctic e-commerce industry have encountered development bottlenecks in the past two years and their performance has declined sharply.

In 2021, the comprehensive service business of Antarctic e-commerce brand decreased by 47.63% on a year-on-year basis, with a sharp drop from 1.246 billion yuan in the previous year to 652 million yuan, which directly led to the double decline of the company's annual performance, and the net profit attributable to the parent company decreased by 59.84% year-on-year.

With the increase of categories and authorized dealers, the company's Gmv on the e-commerce platform is still growing, but the monetization rate is constantly declining. From 2018 to 2020, they are 4.55%, 4.28% and 3.30% respectively, and in 2021, it drops to 1.72%.

Since this year, there has been no sign of easing the decline of Antarctic e-commerce. In the first three quarters, the net profit attributable to the parent company fell again by 38.27% year-on-year.

In 2016 and 2017, the company acquired two brands of "Cartier crocodile" and "Jingdian Teddy" to expand the category. It also spent 956 million yuan to acquire time Internet, set foot in mobile internet marketing business and improve the company's revenue scale.

This year, the company started cooperation with C & A (China), and acquired 100% equity of baijiahao with 180 million yuan, and acquired 78 trademarks such as basic house, mind bridge and Jucy Judy held by TBH Global Co., Ltd. in mainland China and * * region with RMB 330 million, so as to expand its trademark database.

However, can all the new trademarks acquired reach the height of "the Antarctic"?

The market is not optimistic. In July 2020, the stock price of Antarctic e-commerce was once as high as 24 yuan, and the total market value was close to 60 billion yuan. Then, the stock price fluctuated all the way down. Since the beginning of this year, the stock price of Antarctic e-commerce has always been kept below 7 yuan. The closing price on December 2 was 4.75 yuan, and the total market value was only 11.66 billion yuan.