Per reporter: Zhang Yun Per editor: Wen Duo
Recently, some media reported that Hershey (China) Investment Management Co., Ltd. (hereinafter referred to as Hershey China) is caught in the whirlpool of public opinion in China. Hershey Chocolate Sales (Shanghai) Co., Ltd. also issued a clarification statement on the "Hershey Chocolate" WeChat public account, saying that China has always been one of the important markets for Hershey. Together with distributors and partners, we will continue to promote business and business in the Chinese market.
Is it "intending to evacuate" or "still operating normally"? The words of all parties are conclusive, but they are in the opposite direction, and they are confused by the "melon-eating masses".
On February 10, the Daily Economic News reporter visited The office of Hershey China in Xinmei Union Square in Shanghai, and saw at the scene that the soft decoration of the two floors of the two floors has not been demolished, the remaining equipment has been emptied, one of the floors has welcomed new tenants, and the construction team is undergoing indoor renovation operations.
Where has Hershey China gone?
The reporter contacted some of the company's departing employees through the contact information left at the front desk, but most of them were silent about the company's current situation. Only one courier brother said: "(The company) has moved for more than half a year and almost a year, and I heard that I went to the opposite building and rented a few offices."
On February 11, this claim was confirmed by The Hershey China customer service hotline. According to the reporter's multi-party verification, the company still has more than ten left-behind employees in Pudong, Shanghai, and is dealing with related Chinese agency business.
It is worth noting that the customer service who answered the phone was the staff of Hershey's chocolate distributor Dashang Trade, who said: "The offline dessert shop and cold drink shop have been closed, and if there is any existing one, it is not officially authorized." ”
So why are the three Hershey stores in Shanghai still open? The person in charge of the original store dealer Ying Isaac said in an interview with the "Daily Economic News" reporter that Hershey has constantly disputed the handling of problems left over from the channel, and all appeals have been treated coldly, and because there are relevant legal documents to prove it, some shopping malls are operating.
On February 11, the 16th floor of Xinmei Union Square, which was the original office of Hershey China
Image source: Photo by reporter Zhang Yun
Hershey China's "new" office site may retain only more than a dozen people
On the 17th floor of Shanghai Xinmei Union Square, the concave floor and bare pipes have been emptied.
The Daily Economic News reporter saw in the miscellaneous objects left by the Hershey employees that some decorations were left in the conference room, and the names of about 40 employees who were made of cardboard and the notes printed with the names of the prizes were scattered on the ground.
Property personnel who came to check on the indoor situation said Hershey China had moved out last year. The new tenant on the 16th floor said that the place had been vacated in November last year, and the reporter called two building couriers to learn that the company had moved away for more than half a year.
According to Qixinbao information, Hershey China added a new filing information for the members of the liquidation team on November 16, 2021, the person in charge is ROHIT GROVER, and the members include Zhao Zhihua and WILLIAM CHRISTOPHER PRITCHETT.
Image source: Screenshot of Qixinbao
In addition, the reporter found that almost all the historical administrative documents left behind were missing from 2021. On the cultural wall, a photo of Hu Tingzhou, the former general manager of Hershey Greater China, occupies the absolute protagonist, and Hu Tingzhou officially announced his resignation as early as December 2020.
Where did the disappearing 2021 go? According to some departing employees told reporters, from the end of 2020 to the beginning of 2021, there were layoffs in Hershey China, and some grass-roots employees also left their jobs when they saw the momentum was not good, at the same time, a number of executives left one after another, for unknown reasons.
Where is the company that moved out now, and are there any left-behind employees?
The "Daily Economic News" reporter called the Hershey China customer service hotline, and the other party said in the conversation that he was dashang trade, "Hershey China does not work here, they have another office space, only know that it is in Pudong." ”
The reporter got a statement from the regional sales representative of The Upper Trade in the form of a procurement, now there are about ten people in Hershey China, tmall online stores are undergoing page optimization, including updating product descriptions, product pictures and product barcodes, Jingdong online stores are still operating normally. For the phenomenon of stock shortage, The trade indicates that there is no abnormality in the circulation of imported goods.
Hershey Dessert Shop Shanghai Store Image source: Per the reporter Zhang Yun photo
Terminated dealer: Hershey has no one to solve the problem
At the end of 2020, Hershey China announced that it would adjust its Business Model in China and decided to cooperate with a large local distributor, including channel authorization and the establishment of a supply system. The recent product packaging shows that the bagged products produced in September 2021 are imported and distributed by Dashang Trade.
The "Daily Economic News" reporter found that there are still three Hershey dessert shops in Shanghai that are operating normally. At the Daning Jiuguang Center store in Shanghai, the reporter bought a box of chunky chocolates produced in July 2021 and saw that the manufacturers were Bainuo Food and Shan long Food.
"The two are Hershey's subcontractors and it's unclear if they are still working together." Hershey's Chinese consumer hotline said that after that, all were imported from Malaysia, and chocolate products were uniformly distributed by Dashang Trade. When asked about the situation of offline stores, the other party responded that the existing offline dessert stores were not authorized by Heroshi.
From October to December 2021, the official WeChat public accounts of "Hershey Chocolate" and "Hershey Dessert Concept Store" have successively issued statements. First, Hershey China said it had terminated its trademark license agreement with Shenzhen Xintuo in advance on July 10, 2021, requiring all Hershey dessert shops to immediately stop using the Hershey logo. Subsequently, Shenzhen Xintuo responded that Hershey China requested the termination of cooperation between the two parties without reason and without early warning notice to cause dealers to suffer tens of millions of losses, and requested the regulatory authorities to suspend the deregistration procedures of Hershey China to obtain compensation.
The "Daily Economic News" reporter contacted the person in charge of Shenzhen Xintuo, Ying Isaac, to understand the latest situation, and Isaac said that from may last year to the present, no one in Hershey China was willing to come forward to negotiate follow-up matters with the terminated dealers, and no one even told the reason for the termination.
"The headache now is that Hershey China has entered the liquidation process, and the company's legal representative is not in China", Ying Isaac further said: "But our contract is that by 2025, there are about 20 or 30 stores in the country, each store has a million investment, plus the mall requires us to refund the loss of liquidated damages and employee severance pay, which is not a small amount." Fortunately, there are three other shopping malls in Shanghai that have agreed to continue our operation because we have the supporting documents of the lawsuit. ”
Is it a pre-calculated exit?
Just then, a coincidental point in time caught the attention of reporters.
Isaac mentioned that Hershey China sent a letter to stores and trading distributors on May 11, 2021 requesting termination of the contract, and according to Kaixinbao, Hershey Chocolate Sales (Shanghai) Co., Ltd. (hereinafter referred to as Hershey Chocolate Sales Company) was incorporated on May 13, 2021.
Statement in the "Hershey Chocolate" WeChat public account Image source: Screenshot of the web page
The reporter checked the relevant industrial and commercial information, but failed to compare the Hershey Chocolate Sales Company with the main personnel of Hershey China, but according to a dealer, the former's legal representative Zhao Zhihua was a regional sales representative of Hershey China before, and this name also appeared in the list of members of the Hershey China Liquidation Group.
What is the intention of terminating the contract with the distributor and setting up the Hershey Chocolate Sales Company?
According to one Hershey dealer: "Originally, the company had a business team of two or three hundred people in Xinmei Union Square, and each area had different dealers, about one or two hundred dealers. However, starting in 2020, when planning to adjust the strategy, the original dealer contract was slowly terminated, and after 2021, a new general dealer was found called Dashang Trade. ”
"Of course, Dashang Trading also left some (the original dealers) to become their subordinate distribution team, but Hershey China did not deal with other distribution contract disputes that were terminated without cause." According to Isaac, all of the dozen or so people left behind by the company moved to the new place in order to cut off the original distribution contracts and litigation disputes, "so they do not admit that they have any relationship with Hershey China."
According to previous media reports, on December 1, 2020, Hu Tingzhou left his post, but just four days before leaving office, Hu Tingzhou announced trade cooperation with Dashang to adjust Sales Channels in China.
Some of Hershey China's original dealers believe that Hershey China was liquidated and a new company was set up in order to withdraw existing assets from China, but some existing secondary dealers said that Hershey China's scale reduction was to comply with the structural adjustments made by local sales channels, and after stages of pain, it will gradually get on the right track.
"At the end of 2020, a notice of adjustment of labor relations was issued, which clearly stated that the company would change its business model and revoke the organizational structure, and eventually apply for liquidation and cancellation of the company." A departing employee said.
It is not known whether the two sides are right or wrong, and Isaac only hopes that the two sides can get together and disperse.
Why did Hershey China enter the whirlpool of public opinion?
In June 2019, Hu Tingzhou was promoted to general manager and began a product diversification strategy, launching some flavors that were considered quite peculiar. In 2020, Hershey China spent a huge amount of money on marketing, but unfortunately encountered the epidemic, the consumption scene was cut off, coupled with the slowdown in the market growth of new chocolate, it was not lucky to prepare for a big deal. Hershey China therefore handed over a poor report card, the financial report shows that the Performance of the Chinese Market is almost waist-to-waist, and the global net sales volume is up 2% year-on-year, and the Chinese market sales are down 46% year-on-year.
After this storm, can Hershey still have a second spring in the Chinese market?
Hershey's official response: it will continue to invest in the Chinese market
On the evening of February 12, Hershey Chocolate Sales (Shanghai) Co., Ltd. released a clarification statement on the "Hershey Chocolate" WeChat public account. Regarding the recent public opinion about the company's operation, Hershey Chocolate said that China has always been one of the important markets for Hershey. Hershey's commitment to Chinese consumers will continue its long-term development strategy in the Chinese market. Hershey will continue to invest in the Chinese market and work with distributors and partners to continue to promote business and operations in the Chinese market.
In response to the shortage of goods in online channels, Hershey Chocolate responded that due to the surge in sales of Hershey products during the Spring Festival, the supply of Hershey Jingdong self-operated stores was in short supply, and some products were currently out of stock. Hershey is working with dealers to solve the supply problem, with the end of the Spring Festival and the supply of new dealers, follow-up goods will continue to keep up. Hershey will continue to work closely with new distributors to ensure that Chinese consumers can always buy their favorite Hershey products.
"In order to better serve consumers, the Hershey Tmall flagship store has optimized and adjusted its e-commerce business model, and the Hershey Tmall flagship is currently undergoing renovation, and it is expected that the launch time of the new official flagship store will be at the end of February." Hershey chocolate indicates.
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