Recently, Antarctic E-commerce disclosed an “Announcement on the Company’s Signing of Intent Agreement” and planned to acquire BASIC HOUSE, Mind Bridge, and JUCY held by Korean clothing retailer TBH GLOBAL CO., LTD for RMB 500 million. The trademark ownership of JUDY’s three major trademarks (including the Chinese trademarks Baijiahao, Baijiahao, etc.) in China, and the acquisition of 100% equity of Baijiahao (Shanghai) Fashion Co., Ltd. held by Baijiahao Hong Kong Co., Ltd. Previously, the story of Antarctic people relying on brand licensing to “make huge profits without capital” has long been a well-known business legend. At the same time, Renhe Pharmaceutical also began to follow the example of “Nanjiren” and started the business of “selling hangtags”.
Antarctic e-commerce accelerates the purchase of trademarks
Antarctic e-commerce’s ” A new member will be added to the “tag army”.
On November 2, the board of directors of Antarctic E-commerce decided to sign an “Intentional Agreement” with TBHGLOBAL CO., LTD. and Baijiahao Hong Kong Co., Ltd. to acquire BASIC HOUSE, Mind Bridge, etc. held by TBH GLOBAL. The trademark ownership of the JUCY JUDY trademark (including the Chinese trademarks Baijiahao, Baijiahao, etc.) in mainland China, Hong Kong and Macau, and 100% equity of Baijiahao (Shanghai) Fashion Co., Ltd. held by Baijiahao Hong Kong. After preliminary negotiations between the two parties, the overall transaction consideration was 500 million yuan. The announcement also shows that all parties will try their best to promote the signing of transaction documents before December 26, 2021.
It is understood that TBH GLOBAL is a Korean company founded in 1964, which started as an underwear wholesale and retail business. In 2000, the group launched its first independent brand BASIC HOUSE, deploying fast fashion, and became a well-known women’s fashion brand in South Korea. In 2004, BASIC HOUSE entered China, but faced a financial crisis in 2018. That year, TBH GLOBAL’s net loss reached 57.7 billion won.
Nanji E-commerce stated that the acquisition was mainly due to “the rise of content e-commerce. The value of some well-known and personalized brands has become prominent. The acquisition of such brands will help build the company’s brand system.” At the same time, , and can also make up for the company’s shortcomings in R&D, production, and quality management.
It is worth mentioning that the agreement of intent shows that after Antarctic E-commerce agreed to transfer the ownership of the subject trademark, it immediately authorized TBH GLOBAL CO., LTD, its affiliates and entrusted processors to license the subject trademark free of charge. The right to use, the scope of authorized use is the production of products in China (the scope of authorized use is limited to production, and sales of such products in China are prohibited) and the scope of reasonable use related thereto, and the authorization period is the expiration date of the trademark registration period (such as renewal of validity, This is the expiration date of the renewal validity period).
Recently, Antarctic e-commerce has accelerated its layout in the fashion industry brand matrix.
On July 3 this year, Anji E-commerce announced that it had established a joint venture with the international fashion retail brand C&A and became the only online operation partner of the “C&A” brand in China.
Anji E-commerce has stated that the company will build about 20 world-class brands through various cooperation and purchase models in the next five years.
The “selling tags” business is not working?
Data show that in the first three quarters of this year, the total transaction value of Antarctic e-commerce channels reached 28.09 billion yuan, a year-on-year increase of 22.92%, of which the Alibaba platform accounted for 12.901 billion yuan. , accounting for 45.93%, a year-on-year decrease of 5.35%.
From an overall perspective, the company’s transaction volume maintained a growth of 22.92% in the first three quarters. However, due to the slight decline in the growth rate of the traditional search channel Alibaba channel and the slowdown in the JD channel growth rate, customer inventory pressure is greater. As a result, the company’s comprehensive service revenue declined. Therefore, the company’s revenue in the first three quarters totaled 2.775 billion yuan, a year-on-year increase of 0.08%, of which the company’s headquarters revenue totaled 505 million yuan, a year-on-year decrease of 37.62%; Time Internet’s operating revenue totaled 22.7 billion, a year-on-year increase of 15.63%; net profit was 403 million yuan, a year-on-year decrease of 44.15%.
Actively incorporating the trademarks of overseas fast fashion brands with a certain degree of popularity may be related to the decline in profit margins of Antarctic e-commerce’s main “selling tags” business.
As we all know, Antarctic e-commerce also made its fortune by selling underwear in its early days. In 1998, Zhang Yuxiang founded the underwear brand “Nanjiren” and with the help of a strong advertising campaign, it became the number one thermal underwear brand in China. However, as the market for thermal underwear gradually matures and Yu Zhaolin, Hengyuanxiang, Beijijing, etc. rise rapidly, the advantages of Antarctic people are no longer there. In 2008, Nanjiren closed the factory and awarded the brand to its partners.
Through licensing, the brand will be infinitely expanded from underwear to men’s and women’s clothing, maternal and infant, outdoor, luggage, shoes, home textiles, small household appliances and other categories. By the end of the first half of 2021, the company’s Nanjiren and other brands have intensively covered e-commerce channels through nearly 10,000 online stores.
The 2019 annual report found that the company’s revenue in 2019 was approximately 3.907 billion yuan. Among the operating income components, 31.76% is brand comprehensive service business, with an amount of approximately 1.24 billion yuan; 1.68% is dealer brand licensing business, with an amount of approximately 65 million yuan. The total revenue related to brand licensing is approximately 1.3 billion yuan.
However, after the Antarctic people, in June 2016, Antarctic e-commerce spent nearly 600 million yuan to acquire 95% of Cartelo Crocodile Pte Ltd and acquired the Cartelo Crocodile series trademark; in November of that year, With another 50 million yuan, it completed the acquisition of classic Teddy and other series of trademarks, but it has never been able to reach new heights. The Antarctic brand is still the absolute “ballast stone.”
As the traffic dividends of e-commerce gradually disappear, it is difficult to create another Antarctic person. In 2020, Nanjiren’s entire network achieved GMV of 36.2 billion yuan, accounting for more than 90%. As the licensing scope of its major brands gradually becomes saturated, growth bottlenecks have emerged. In 2020, the company’s brand comprehensive service business revenue was 1.246 billion yuan, a slight increase of only 0.38% year-on-year. Nanji E-commerce (Shanghai) Co., Ltd., a subsidiary that mainly operates the Nanjiren brand, recorded a net profit of 280 million yuan in 2020, a decrease of 33% from 420 million yuan in 2019. In the first half of this year, the situation took a turn for the worse, with brand comprehensive service revenue plummeting 42.58% to 240 million yuan. Antarctic E-commerce mentioned in its third quarter 2021 financial report that the decline in net profit attributable to the parent company in the first three quarters was mainly due to the decline in profits of the Antarctic headquarters.
Faced with the downward trend, the company began to expand into food fields that had not yet been involved, and laid out cross-border e-commerce. At the same time, the charging standards for brand comprehensive services will be increased to pass on costs. On May 11 this year, Antarctic E-commerce announced its new cross-border e-commerce project Fommos for the first time at an investor meeting. Zhang Yuxiang, chairman of Antarctic E-commerce, said at the time that the cross-border e-commerce brand “is expected to go online around July.”
Trademark authorization is not a “one-stop deal”
There are many domestic brands currently doing this, such as Hengyuanxiang, Taizilong, Scarecrow, Catman, Arctic Velvet, Big Mouth Monkey, Yalu, etc.
Take Renhe as an example. Now when you search for Renhe on the online shopping platform, the brands that come out include Yaodu Renhe, Renhe Craftsmanship, Anqin Baby, Yijian Qingxin, etc. These are all authorized by Renhe to other brands. The company’s OEM production and sales involve five major fields: personal care, beauty and skin care, nourishing and health care, food and beverages, and medical equipment.
Like “Antarctic Man”, the 2020 performance report released by Renhe Pharmaceutical on April 13, 2021 showed that Renhe’s total revenue in 2020 was 4.106 billion yuan, and its total profit was 848 million yuan.
On September 1 last year, La Chapelle issued an announcement stating that the company proposed to adjust its online business from the traditional model of “planning and design-independent procurement-platform operation-online sales” to “brand authorization + A new model of operational services. And La Chapelle plans to add services such as brand design, brand management, development, transfer, and consulting of information technology and prevention technology to the company’s current business scope. It is reported that a total of 395 trademarks have been applied for under his name, of which he operates nearly 20 sub-brands.
Wu Zhaolong from Chongqing Southwest Intellectual Property Operation Group said that companies must not damage their brand image due to petty profits. The “decline” of many well-known brands is mainly due to two major issues: technological transformation and weak brand awareness. Some brands have not kept pace with the times and updated modern business concepts, causing their products to lose their competitiveness. </p
