How far can Antarctic people go "without capital and profit" with trademark authorization

  "OEM" leads to a decline in brand reputation, more companies choose new marketing models to "make money on their own"

  "OEM" is nothing new now.

The most typical ones are Antarctic people. There are overwhelming online Antarctic products, and it is difficult to tell which Antarctic people produce by themselves.

There are many brands like Antarctic that rely on "trademark authorization" to do almost "no cost and profit" business, and there is a trend of spreading from the clothing and textile industry to other industries.

The Beijing Youth Daily reporter learned that with the emergence of new retail models and the decline in brand reputation caused by "OEM", the business of "trademark authorization" seems to have entered the Red Sea stage.


  Antarctic people rely on authorization to earn more than 1.3 billion a year

  The temperature in Beijing suddenly cooled. Consumer Mr. Yang decided to buy himself a warm jacket. With his simple impression of the brand, he was a little confused when he searched on the e-commerce platform.

"Brands are all Antarctic people, it is not clear which one is authentic Antarctic." Mr. Yang said.

There are not a few consumers who have doubts like Mr. Yang. Many consumers say that underwear products like Antarctic are often searched online, and the quality varies from good to bad. It is hard to believe that they are from the same manufacturer.

  This kind of situation not only exists in the underwear of Antarctic people. A reporter from the Beijing Youth Daily recently inquired on e-commerce platforms and found that not only thermal underwear, but also curtains, down jackets, beddings, and even breast pumps and miniatures can be searched online. Washing machines, electric massage chairs and tables, etc., seem to be "Antarctic for everything."

  Why is there such a situation?

According to public information, Antarctic is an underwear company established in the last century and pioneered thermal underwear products. After more than 20 years of development, Antarctic has achieved good results in product lines such as underwear, mothers and babies, and clothing.

However, since 2008, Antarctic people have started the transformation of the enterprise. They don't need factories and distributors, but only do "trademark authorization" business.

On December 28, 2010, Antarctic launched the "NGTT" community business model, dedicated to establishing an integrated e-commerce ecosystem service system.

Backdoor Jiangsu Xinmin Technology went public in 2015, and the stock market is referred to as "Antarctic E-commerce".

  Antarctica’s "trademark licensing" business with a gross profit of more than 90% has achieved the ultimate. In 2020 alone, the total revenue of Antarctic e-commerce's main brand licensing and integrated service business was 1.327 billion yuan, accounting for the company's entire year. About 1/3 of income.


  "OEM style" has spread to other industries

  In fact, it has long been more than an Antarctic family that does trademark licensing, which is commonly known as "OEM" business. Many old domestic brands in the textile industry have already embarked on this path.

  A reporter from the Beijing Youth Daily noted that some merchants said that they only need to pay a brand usage fee of tens of thousands of yuan each year, and then pay for the tag according to the sales volume, and the rest of the licensors basically no longer bother.

In some industry segments, the brand usage fee can even be as low as 10,000 yuan or less.

  On some brand licensing websites, some famous brands that were familiar to the older generations are also listed, such as Pierre Cardin, PLAYBOY, Cardinal Crocodile and so on.

The types of commodities involved in the "OEM" are mainly clothing, but also include shoes, accessories, luggage, daily necessities, maternal and child clothing, and home textile products.

  In addition, not only the textile industry, for example, Antarctic e-commerce also plans to enter the food, catering and other industries.

According to the Qicha APP, Shanghai Nanheng Network Co., Ltd. was established on September 15 with the legal representative Zhang Yuxiang and the registered capital of 10 million yuan. The business scope includes: technology development in the fields of network technology, software technology, and logistics technology , Technical services, technical consultation, technology transfer; catering management; domestic cargo transportation agency; wholesale of edible agricultural products, etc.

The company's equity penetration shows that the company is jointly held by Antarctic e-commerce and Hu Jiamin.

  Not only is the Antarctic e-commerce company, but the current "OEM style" is also popular in the cosmetics, health care products, food, and small household appliances industries.

Among them, Renhe's cosmetics and health products, modified cosmetics, and some small household appliances from Joyoung and Philips have also adopted this model.


  OEM business is difficult under the new retail model

  Is OEM a good business?

Judging from the history of Antarctic e-commerce all the way, this was indeed a good business with no capital and no profit.

In the year of the backdoor in 2015, Antarctic e-commerce achieved an operating income of 389 million yuan and a net profit of 172 million yuan.

By 2020, the company will achieve operating income of 4.172 billion yuan and net profit of 1.188 billion yuan.

The five-year operating income has doubled by nearly 9.5 times, and the net profit has doubled by nearly 6 times.

  According to the 2020 financial report of Antarctic e-commerce, the gross profit margin of its brand integrated service business reached 93.26%, the gross profit margin of the dealer brand authorization business was 94.37%, while the gross profit margin of "sales of goods" during the same period was only 1.17%.

The profit of the "OEM" business can be seen.

  However, as the market changes, the "OEM" track has become a red sea.

A reporter from Beijing Youth Daily noted that most of these OEM products are only sold on e-commerce platforms.

On the same e-commerce platform, “OEM” stores of the same purpose and brand have been saturated, and some platforms cannot even review and approve the opening of a new “OEM” brand store under a certain category.

  In recent years, some brand licensing companies have neglected to strictly control "OEM" companies, and quality problems have frequently occurred.

Among them, in the past few years, the Antarctic brand has repeatedly been blacklisted by regulatory agencies or consumer associations due to quality or sampling problems, which greatly affects the brand's reputation.

In the minds of consumers, the favorability of such “branded” brands will also be greatly reduced.

  In addition to the risks of quality and brand reputation, analysts said that changes in the market environment have also made it more and more difficult to do "OEM" business.

Under the new retail model, supply chain companies have increased their voice, coupled with changes in consumer shopping patterns, for production companies, using brands to support sales is no longer the only option.

More companies choose new marketing models to "make money on their own", among which the S2B2C model is the most prominent.

This model means that large suppliers organize the supply of goods, and channel suppliers become bridges, connecting large suppliers and down customers, completing the circulation of commodity circulation and user demand feedback.

In this mode, businesses can even complete customized services and products for consumers.

  It's no wonder that the days of the "trademark licensing" kings in the past were not easy.

According to the 2021 interim report of Antarctic E-commerce, the company's main operating income was 1.661 billion yuan in the first half of this year, an increase of 2.15% year-on-year; the net profit attributable to the parent was 246 million yuan, a year-on-year decrease of 42.85%.

Prior to this, in the fourth quarter of 2020, its net profit had declined significantly, from 582 million yuan in the same period in 2019 to 443 million yuan.

  Text/Reporter Zhang Xin Co-ordinated/Yu Meiying

Keywords: antarctic, people, oem, marketing models, products, decline, profit, companies, yang, ones, trademark authorization, capital, brand reputation, business, e-commerce