Consumer Reports 丨 Shoddy! The ELAND down jacket costs 75 and costs 1500

Reporter | Zhou Fangying

Edit | Lou Shuqin

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According to the Beijing Xicheng District Market Supervision and Administration Bureau, Yi Nian (Shanghai) Fashion Trading Co., Ltd. (hereinafter referred to as "Yi Nian Shanghai"), a registered company of ELAND Yi Lian Group in China, was administratively punished for violating Article 50 of the Product Quality Law of the People's Republic of China, involving adulteration and adulteration in products, using false to be true, shoddy, or passing off unqualified products as qualified products.

According to the penalty information, a total of 80 down jacket products involved in the case were produced by other companies entrusted by Yinian Shanghai, and the production cost was 75 yuan per piece, while the counter was priced at 1598 yuan per piece. By November 3, 2021, a total of 2 down jackets involved in the case had been sold, of which 1 was sold by spot check. Yi Nian Shanghai was fined 14,382 yuan by the Beijing Xicheng District Market Supervision and Administration Bureau and confiscated 1,322.45 yuan of illegal gains.

In fact, this is not the first time that Yinian Shanghai has been fined, many of the company's brands have been subject to administrative penalties for product quality, false publicity and other issues.

Founded in 1980 in South Korea, the Yilian Group owns more than 40 brands in ELAND, SPAO, Prich, Roem, Plory, paw in Paw. According to the State Administration for Market Regulation, at the beginning of 2021, a "women's wool coat" on the shelves of fast fashion brand SPAO actually has 100% polyester fiber and no wool component. Yi Nian Shanghai was fined 200,000 yuan for false propaganda.

Prior to this, in 2020, a washed jeans sold in the ELAND brand Tmall flagship store was judged to be unqualified. Yinian Shanghai was fined 553.2 yuan for confiscating illegal gains and fined 717.2 yuan for selling products with unqualified quality.

According to the statistics of Tianyancha, the cumulative amount of penalties received by Yinian Shanghai in the past two years is 246,000 yuan. Although the amount of penalties is not large, to a certain extent, it can reflect that there are not many problems of Yilian Group in the Chinese market. In fact, Yilian Group has already encountered walls everywhere in the Chinese market.

Yilian Group entered the Chinese market as early as 1994, and has introduced a number of popular fashion brands such as ELAND, SPAO, SCOFIELD, TEENIE WEENIE and so on. Since the opening of agent recruitment in 2013, more than 30 brands under Yilian Group have entered more than 7,000 Stores in China.

However, since 2017, the sluggish Yilian Group has gradually sold its brand assets to Chinese companies.

In that year, Yilian Group sold its brand Teenie Weenie to China's Vignace Fashion Co., Ltd. (later renamed Jinhong Group) for a transaction price of about 5 billion yuan. In 2019, the two parties went to court over a dispute over the sale and purchase contract, and Yilian Group hoped that Jinhong Group could pay the transfer price owed by 454 million yuan and the liquidated damages for late payment. Until October 2020, Jinhong Group issued an announcement that the two sides reached a comprehensive settlement with a total settlement amount of 476 million yuan.

Image credit: Teenie Weenie

In 2019, Yilian Group also sold all of its shares in E-Land Footwear USA Holdings to Xtep International for $260 million. The company sells K-Swiss, Palladium and Supra, three well-known global sports brands, as well as two sub-brands, PLDM and KR3W.

At the same time, Yilian Group also has to face the dilemma of the decline in the attractiveness of its brands in China.

In mid-2020, SPAO Guangzhou R&F Haizhu City store closed, which is the brand's first and only store in South China. After entering the Chinese market in 2013, SPAO once opened more than 50 stores. Since the large-scale closure in 2017, SOO has only more than a dozen stores left in China so far.

Interface Fashion has analyzed that with the improvement of consumption power in the Chinese market, supply chain reform, and the surge of online apparel brands, since 2016, international fast fashion brands have begun to retreat in China, frequently spreading the news of store closures and exits from the Chinese market.

Compared with the positioning of the main brand ELAND American college style, and the high-end pricing ranging from 300 yuan to 2000 yuan, the main price of SPAO, which focuses on fast fashion, is below 400 yuan, and often carries out discount promotions. Such positioning and price bands are not competitive in today's Chinese market.

The blow of the new crown epidemic to the retail market has more or less exacerbated the crisis of yilian group. Interface Fashion has reported that in the first half of 2020, the sales of Yilian Group showed the first double-digit quarterly decline since the establishment of the company, and Yilian Group has successively closed a number of stores in Daegu and Incheon. In addition, Yilian Group sold 10-year operating rights to parking lots in more than 20 stores to raise working capital of about RMB700 million.

In the past two years in the Chinese market, Yilian Group is trying to get rid of the dilemma of its declining influence through digital transformation.

According to the news of Seeing The Truth Technology, Zhang Kasawei, head of new retail of Yilian Group, said at the recent 5th User Conference of Yilian 2022 Yikr that in 2019, Yilian Group has just begun to explore some new retail stores.

In 2020, due to the catalyst of the new crown epidemic, Yilian Group quickly built key projects for digital operations such as mini programs, live advertising, data operation, membership system, and online and offline integration in this year. In 2021, Yilian Group will further lay out a more detailed digital direction such as private domain operations.

However, from the perspective of the overall e-commerce development environment, the digital transformation of Yilian Group has been slow. Another major difficulty of Yilian Group is how to integrate and manage its more than 30 brands to ensure the survival rate of the overall transformation.