When Los Angeles Spring and Summer Fashion Week 2009 was bleakly ended, the fashion week that gathered dozens of brands could not be held due to the lack of sufficient international brands. At the other end of the globe, a Chinese businessman is worrying about the big international brands he represents. With an agency agreement, it can no longer continue to operate. The “big brands” brought him far more trouble than happiness.

People in the industry believe that for a long period of time before, there were many restrictions in the Chinese market and the market prospects were unclear. Most brands chose to cooperate with Chinese agents in order to pass on risks. A group of large-scale private foreign trade companies became big brands of luxury brands and entered the Chinese market. Advance Army; In 2004, China complied with the WTO's commitment to fully open the retail industry to foreign capital and to eliminate institutional barriers. What followed was the game between luxury brand dealers and agents in the development of Chinese market rights. Under the influence of the financial crisis, this game may be even more intensifying.

When Los Angeles Spring and Summer Fashion Week 2009 was bleakly ended, the fashion week that gathered dozens of brands could not be held due to the lack of sufficient international brands. At the other end of the globe, a Chinese businessman is worrying about the big international brands he represents. With an agency agreement, it can no longer continue to operate. The “big brands” brought him far more trouble than happiness.

Broken supply of "dragons"

“In the past few days, sales in Hangzhou's various sales outlets are good. Some Montblanc counters open for 20 minutes and sell 100,000 yuan.” Zhu Xingyi, chairman of Shanghai Guo Ruixin (Group) Co., Ltd. (hereinafter referred to as “Guo Ruixin”) told reporter. The counter he referred to was the “Montblanc” brand sales counter that he once represented. However, such a good business has nothing to do with him. On May 15, 2007, Montblanc China headquarters terminated his agency agreement and "severed supply." Before this, Zhu Xingyi and this "Dragon" had a "honeymoon"-like relationship for 5 years.

“My store in Hangzhou Tower had set a record of selling more than 800,000 yuan in the next month in 2007. I was expecting to start earning real money in the past two years, but I did not expect this to be the result.” Zhu Xingyi reluctantly said: "This should be my business. I signed Montblanc's agency agreement in 2002 with an unlimited term. Who knows that it will be such an ending now."

In 2002, "Montblanc" was not a first-line brand recognized by Chinese consumers. Many people think that "Montblanc" is at best a pen with a slightly better quality, and one is also worth a hundred dollars. Zhu Xingyi said that when Montblanc was controlled by the Chinese market, it was not yet open to the outside world. Wang Zhiqiang, who was responsible for Montblanc's Chinese mainland market business, found Zhu Xingyi and had many discussions with him in China. He hoped that he could make him a general agent for Montblanc China. And Wang Zhiqiang also issued a very attractive price - if Zhu can become the general agent of Montblanc, they will sign a permanent agency agreement. Thus, in October 2002, Montblanc and Zhu Xingyi's Guo Ruixin signed an agency agreement with no deadline. Zhu Xingyi wants to maintain and develop the Montblanc brand's market in China. With the agency agreement, Zhu Xingyi really put real money into the development of Montblanc's Chinese market.

The initial purchase method was based on Wang Zhiqiang’s recommendations and requirements. The company was specifically incorporated in Hong Kong and then purchased through cash purchases by Hong Kong companies. After customs procedures were completed, Zhu Xingyi officially launched Montblanc’s products into the Chinese market.

Zhu Xingyi said that Montblanc’s purchase conditions were very harsh. Every time, 5 million units are required to be purchased. At the time, according to the purchase price of 3.5% of the retail price, the cost of customs clearance after importing is about 50%, plus the cost of opening a store, the cost of channels, personnel and various other costs. It is very difficult.

Due to the large number of smuggled goods flooding the market, Zhu Xingyi needed to convince retailers to abandon smuggled goods and sell genuine imported goods. “Our cost is very high. Plus the brand is not known, sales have been unoptimistic. We have invested a lot in four years. Ten million yuan. It was not until the second half of 2006 that we finally saw hope."

It was also at this time that Montblanc began to propose to re-sign the contract, "I justly rejected it." Zhu Xingyi said.

At first, Montblanc did not take any tough measures. There is also communication between them. Meetings will be held once a week almost every week, and there are also problems that can be discussed together. Zhu Xingyi himself is not willing to tear his face with Montblanc. "After all, they must rely on their supply. If the relationship is frozen, it will not be good for everyone," Zhu Xingyi said.

In Zhu Xingyi’s view, Montblanc’s ability to open up the Chinese market is inextricably linked to his relationship. What's more, the signing of an agency agreement with an indefinite period of time and the continued cooperation of Montblanc should not be a problem. However, in 2007, Montblanc's dissatisfaction with China Credit Suisse continued to increase. On the first day of May, Zhu Xingyi received a notification from Montblanc China Company that he had illegally used Montblanc's trademarks because he had set up sales outlets in Shanghai, Hangzhou, Yangzhou, Yantai, Yiwu, Yuyao, and Changzhou without the consent of Montblanc. Infringed Montblanc’s intellectual property rights and decided to stop supplying the company.

Zhu Xingyi said that in fact, the opening of these stores, including the newly opened Changzhou Taifu Store, was a stringent screening of Guo Ruixin, and the relevant responsible person of Montblanc China personally went to the scene to see, all the decoration needs the Montblanc company to check After agreeing to implement, after setting up these points of sale, Montblanc never said a single word, nor did it supply it normally. In fact, it is the legality of recognizing these points of sale. All previous stores are also opened in this way.

In the one-year period after Montblanc’s suspension of supply, Zhu Xingyi suffered a breach of contract by the retailer. He also required the placement of 16 sales teams to divert or obtain employment. He never expected that he would put Montblanc under more than four years of hard work. From the unknown to be famous, it would fall into such a situation.

The reporter once contacted Wang Zhiqiang, who was responsible for Montblanc's Chinese mainland market, because the person responsible for the interview was not in China and could not get a response.

The game between luxury brands and agents

The termination of the agreement between Zhu Xingyi and Montblanc is not a single case. With the full opening of foreign investment after China's accession to the WTO, luxury goods have been able to smoothly enter the Chinese market from the previous "curve-saving countries." The agents who used to be a good road for luxury goods to enter China have appeared so unsightly.

At the end of November 2008, the China Business Association’s Watch and Clock Merchants Branch issued the “Agreement on Watchmaking Commercial Sector Solidarity and Sharing Difficulties” to industry members. It called on all members to “adjust their stocks according to market demand and economic affordability in the current special circumstances. "The plan" also hopes that those world-famous manufacturers of fashion luxury brands "given understanding and rational treatment."

People in the industry believe that for a long period of time before, there were many restrictions in the Chinese market and the market prospects were unclear. Most brands chose to cooperate with Chinese agents in order to pass on risks. A group of large-scale private foreign trade companies became big brands of luxury brands and entered the Chinese market. Advance Army; In 2004, China complied with the WTO's commitment to fully open the retail industry to foreign capital and to eliminate institutional barriers. What followed was the game between luxury brand dealers and agents in the development of Chinese market rights. Under the influence of the financial crisis, this game may be even more intensifying.

In March 2008, Montagut France, which had been in the Chinese market for 30 years, began to gradually withdraw the agency rights of some products. In 2007, it set up a Chinese headquarters in Guangzhou to directly manage the business in the Mainland.

Giorgio Armani, a high-end Armani Group brand, uses agents in addition to Beijing and Shanghai. Since 2001, China has rapidly grown into the largest market for Armani except Asia. However, Armani established a Chinese company in China in 2007 and announced plans to open 50 directly-operated stores in China in 2008.

In May 2008, Coach announced the acquisition of Hong Kong, Macau and Coach retail businesses in Hong Kong, Hong Kong and Mainland China. In the coming year, Coach will take over all Coach retail businesses currently located in Hong Kong, Macau and Mainland China in phases. As a leading brand agent and distributor in the high-end consumer goods market in Greater China, Hong Kong Junsi Group has not been spared. Coach Company Road Frankfurt said: “We are ready to build the Chinese market into the third pillar and continue Coach's success in the United States and Japan.” But this success has nothing to do with Jun.

In 2008, there was a long list of brands that gradually recovered their agency rights: Zegna, Loewe...

Who will protect the agent's expected interest?

Zhang Hua, secretary-general of the China Business Association Watch & Watches Branch, expressed concern. He said that in recent years, some large brands have been unaware of the irregularities in the Chinese market, have unilaterally breached their contracts, abandoned their existing partners, and brought negative impact on the healthy development of the entire market. How to regulate the cooperation between the two parties is imminent.

Zhang Hua revealed that at present, it seems that the outcome after taking back the agency rights is different: either the agents continue to cooperate in another way by means of shares; or the brand owners give certain compensation and the agents draw a clear line; Discontinue the goods directly and unilaterally terminate the contract.

Dr. Lu Xiao, Assistant Professor of Marketing at Fudan University School of Management, is one of the few international experts in the study of the management of luxury goods and luxury brands. After analyzing a large number of cases, he came to the conclusion that luxury brands abandon their agents and choose to operate directly. Most of the reasons are that the management of agents is not up to international standards, and they are afraid of hurting the brand image that has been painstakingly managed for decades or even hundreds of years; A small number of brand dealers broke their faith and forcibly recovered the agency rights.

“Agents are pursuing short-term profit maximization, and brand owners will cherish the brand image as life. Once the above relationship is not handled well, friction will occur at any time.” Lu Xiao said.

For this phenomenon, the lawyer of Shanghai Jinmao Law Firm Chen Zhiqing told reporters that the earliest brand dealers and agents cooperated and did not even sign a cooperation agreement to act rashly or simply signed an agreement. The two sides obviously lacked the law. Normative consciousness is always the agent who always hurts.

Professor Chen Zhiqing suggested that Chinese law should draw appropriate reference from the legal provisions of some Western countries and properly protect the expected interests of agents (at present, Chinese law only protects the interests of enterprises’ actual expenditures). In this way, even if companies encounter “raiders”, they have previously paid The hard work and hardships can still be properly rewarded.

According to the reporter’s understanding, Zhu Xingyi’s investment in the Montblanc brand had a cost of nearly 50 million yuan in the early stage, and this part of the cost could not be recovered due to Montblanc’s “off supply”. "In addition to the initial investment, I expect that if I add the profits generated in the past few years, I should not lose more than 1 billion yuan."

Zhu Xingyi has no intention of resorting to legal channels to solve this huge loss. He said that as an international brand, Montblanc should be honest in its business operations. He hopes that the problem can be solved through communication eventually, but the heart can't conceal that concern.