”After getting the hang tag, you can set as much as you want.” Xiaofang confidently sells his business.
Xiaofang is an intermediary, but not selling houses, but selling brand authorization, commonly known as “OEM” business. In his circle of friends, there are all kinds of brand licensing advertisements, mainly clothing, and all of them are familiar brands to consumers. The reporter’s investigation found that nowadays, this kind of business is very common, not only clothing, but also medicine and other fields, there are widespread similar phenomena.
Image source network
Branded product authorization
The annual revenue exceeds one billion yuan
The story of Antarctica’s reliance on brand authorization “no capital and ten thousand profits” has long been a well-known business legend. Open the e-commerce platform, search for Antarctica’s store, there are dozens of them, the mobile phone has brushed more than a dozen screens, and it has not been finished. In addition to the underwear that started out, Antarctica also has home textiles, outdoor, men’s shoes, children’s clothing, small household appliances, and even food.
Moreover, Antarctica also has other sub-brands such as Cardil Crocodile, Boutique Teddy, PONY and so on. The data shows that in 2012, there were no directly operated stores of Antarctica on the street. In 2019 alone, Antarctica’s revenue reached 1.3 billion yuan through brand licensing.
Therefore, on the grounds that the cotton clothing business urgently needs brand cooperation, the reporter added Xiaofang’s WeChat, and the first brand to consult was Antarctica. Xiao Fang said very cheerfully: “Antarctica people are suitable, now Douyin and Pinduoduo are the hottest, you can do it.” He said that those who do OEM business are sold through e-commerce channels. In previous years, it was Taobao and Jingdong that were the most popular. Recently, Douyin and Pinduoduo have become rising stars.
The reporter asked another famous underwear brand if it could be branded, Xiaofang said, yes, but the licensing fee is too expensive, he does not do it. He also briefly described the specific authorization process. First, the two sides communicate their intentions. Then, the small party must conduct a production qualification audit of the reporter’s factory, and meet certain factory acceptance and product quality standards. Then, you can pay the brand licensing fee and sign the agreement.
”The current authorization fee of Antarctica is 4,000 yuan, plus 3,000 sets of labels (hang tags), and the authorization will be used until the end of next year. The price of the tag (hangtag) is 1.8 yuan a cotton coat and 1.7 yuan a cotton pants. As for what price the reporter sold after hanging the Antarctica trademark (hangtag), Xiaofang said, “at will.”
In Xiaofang’s circle of friends, the reporter also saw authorized advertisements for clothing brands such as Cadilla Crocodile, Woodpecker, and Bininu, and he said that “the threshold is not high.”
More powerful than Xiaofang, there are also some websites authorized by full-time brands. The reporter saw a website claiming that its authorized brands cover more than a dozen categories such as home textiles, home, underwear, men’s wear, women’s clothing, shoes, maternal and infant, children’s clothing, clothing accessories, bags, outdoor, home daily use, personal care and so on. The licensing fee given by the website ranges from 0 to 20,000 / year. The bidding fee ranges from 0.25 yuan per unit to 2 yuan per piece.
Customer service told reporters that some brands that do not charge licensing fees have requirements for the quantification of trademarks, such as at least 10,000 at a time.
In the promotional materials on another website, the reporter saw more familiar brands that claimed to be able to do OEM business, such as: Hengyuanxiang, Fuguiniao, Arctic Velvet, Yu Zhaolin, Pierre Cardin and so on.
Pharmaceutical companies set foot in private labels
Moved to the makeup industry
Business is not only in the clothing industry, medicine, health products is also another industry where OEM is prevalent. The one known as the “medical Antarctica” is Renhe.
Search for Renhe on e-commerce platforms, you can also see a variety of products, involving medicine, food, equipment and even cosmetics. In fact, it is more convenient to go to Renhe’s official website to check.
The reporter did his homework in advance, but in practice, he still didn’t expect that Renhe had so many official websites. In addition to the official websites of Renhe Group and Renhe Pharmaceutical, there are also the official websites of its pharmaceutical companies. In addition, its other brands, such as Gynecology, Youkadan, Shining, etc., also have official websites. More information can be found on the official websites of the commercial companies under the Renhe umbrella.
On the official website of Renhe Juhe Health, one of the commercial companies, it can be seen that Renhe has been involved in five major fields: personal care, beauty and skin care, nourishing health care, food and beverage, and medical devices. And this website is mainly to introduce its big health franchise product category.
Similar to Antarctica, Renhe Health also has many sub-brands, such as Yaodu Renhe, Renhe Ingenuity, Anqin Baby, Yijian Qixin and so on. And these big health franchise products are also mainly sold on online platforms. They take e-commerce, micro-business, Internet celebrities, etc. as the main investment targets. The website itself also promotes that Renhe Health products have created a number of Tmall category firsts. These include Renhe Lao Beijing Foot Patch, Renhe 159 Meal Replacement Powder, Renhe Tianshan Snow Lotus Antibacterial Gel, etc.
The reporter found that the latest recommended franchise products on the website are all cosmetics. On the website of the State Medical Products Administration, there is a domestic non-special purpose cosmetics filing service platform. With “renhe” as the keyword, more than 600 pieces of cosmetic information can be found (some of which have been cancelled). Every renhe cosmetics can find its manufacturer, and the manufacturer will have a remark, many of which write the remark “independent production”. In other words, although this cosmetic product bears the trademark of Renhe, it is produced in-house by another company.
The reporter also used the Tianyan inspection to inquire about the relationship between these manufacturers and Renhe.
”Oli Laiya (Guangdong) Jahwa Technology Co., Ltd.”, which independently produces “Renhe Ingenuity Eye Essence Milk”, has some connections with Renhe Group through other technology and investment companies.
”Guangzhou Shifei Biotechnology Co., Ltd.”, which independently produces “Renhe Ingenuity Blackhead Export Film”, is somewhat related to Renhe Group through equity participation and investment.
”Guangdong Yue Makeup Biotechnology Co., Ltd.”, which independently produces “Renhe Ingenuity Seaweed Plant Mask”, has not found a relationship with Renhe Group. There are many more similar cases.
You can’t put it on a brand
Regardless of product quality
The official website of Renhe Juhe Health is so self-promoted: “First-line brands, recognized by consumers, strong product premium ability, high conversion rate.” And on the official website of Renhe New Retail, they themselves described: “emerging brands of medicine Renhe, Renhe ingenuity, Yijian Xinxin, etc., provide Renhe OEM, Renhe OEM, Renhe OEM processing, one-stop one-stop business cooperation services…” OEM, generally provided by the brand side, designed products, produced by manufacturers.
Whether it is OEM, OEM or OEM processing, consumers see products that are Renhe’s brand identity. The reporter noticed that Renhe Ingenuity and Yaodu Renhe, although the brand names are different, but both use the iconic red and white logo of Renhe Group. On e-commerce platforms, although the products are printed with Renhe Ingenuity and Yaodu Renhe, most merchants still emphasize the four words “Renhe Pharmaceutical” on the promotional page. It is difficult for consumers to know the relationship between these products and the Renhe Group.
Shi Lichen, founder of Beijing Dingchen Management Consulting Co., Ltd., told reporters that in recent years, due to factors such as high operating pressure, many companies have embarked on the road of selling licenses and doing OEM business. “Everyone has seen the Antarctica, relying on the OEM business has a high net profit, the cost is almost nothing, and many companies are learning.” Taking Renhe as an example, relying on large-scale advertising investment in the past, it has achieved brand awareness and strong premium ability, and it is natural to embark on this road.
Moreover, Shi Lichen revealed that there are now special intermediaries to publicize brand companies, “They go to tell brand companies that there is such a way to make money, find ways to let brand companies sell licenses, and then they go to earn intermediary fees.” ”
Shi Lichen said that OEM is not illegal at the legal level, and the key is how to continue to control quality while authorizing. “Without quality control, consumers are dissatisfied. Consumers do not care whether you are OEM or OEM processing, consumers only know that it is you who bought the brand. The reputation of the brand declines, and finally the premium ability becomes lower and lower, and the brand becomes worse and worse. ”
The business situation of the Antarctica has already changed subtly. Reflected in the market, in the first half of this year, the net profit attributable to shareholders of listed companies of Nanji e-commerce fell by 42.85% compared with the same period last year.
”The Antarctica no longer has a main business, and his main business is to sell licenses. But pharmaceutical companies like Renhe also have the main business of pharmaceuticals. Therefore, we must pay special attention to quality, otherwise the authorized products are more and more, more and more miscellaneous, quality control can not be stopped, and finally affect the reputation of the main business, the gain is not worth the loss. ”
Shi Lichen believes that authorization cannot be given as soon as the brand is given, and then it is left alone, “To a certain extent, it is no problem.” However, brand enterprises should have special departments to manage the quality of OEM products. This is essential for sampling every batch. In the publicity of the product, it must also be controlled, so that the caliber is consistent and not exaggerated. ”
Beijing Evening News