Reporter | Chen Qirui
Edit | Lou Shuqin
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Another luxury brand has been punished for product quality problems.
The official website of the National Enterprise Credit Information Publicity System recently announced that the Beijing branch of Bally (Shanghai) Commercial Co., Ltd., an affiliate of the Swiss luxury brand Bally, was fined 41,900 yuan by the Beijing Chaoyang District Market Supervision and Administration Bureau, and the amount of illegal gains of 4,085.5 yuan was confiscated.
Penalty information shows that Bally violated Article 39 of the Product Quality Law of the People's Republic of China. The Ordinance clearly requires brands not to sell adulterated or counterfeit products in the course of their business, and prohibits counterfeiting and shoddy products.
Specifically, Bally Beijing Branch imported 75 pieces of women's knitted tops for 1904.5 yuan on May 27, 2021, and then distributed a total of 7 pieces of clothing to sales stores on July 26 and August 2 of the same year. However, the market supervision department found that there were quality problems with the product. The store price of the sold clothing is 5990 yuan, of which the profit is 4085.5 yuan.
After the punishment decision was reported by the media, it quickly fermented on social media. As of press time, the entry related to this incident, "5,000 yuan of clothing profits of 4,000 yuan is also shoddy", appeared on the hot search list of Sina Weibo and received more than 200 million reads. But Bally did not respond to the matter on platforms such as the official Weibo and the official WeChat public account.
This is another recent product quality problem for Bally. In 2020, Bally's Shanghai affiliate was named for not matching the standard for the value of the sunglasses' light transmittance. In January 2021, Bally's Beijing branch was fined 25,000 yuan for failing the starting project because the women's top was sampled.
It is worth mentioning that the unqualified women's tops that were sampled were sold at 4190 yuan in the store, and the actual cost was 1331.95 yuan. Unqualified product quality but sold at a high price is the focus of netizens' attention to such incidents. Previously, the Korean women's clothing brand Yilian had also been involved in controversy because of the down jacket with a cost of 75 yuan and a price of 1598 yuan.
However, unlike ordinary mass brands, luxury brands themselves have the characteristics of high premium. Luxury brands emphasize originality and craftsmanship, and are often more expensive to produce. The brand's historical story, aesthetic system and intangible attributes such as its social status further push up the price of the product.
Image source: Weibo@Bally China
Consumers are willing to pay high prices for luxury goods, which means that they have a sense of identification with the brand's craft design and value system. Although the globalization of sales and the production line of the luxury industry in the past two decades have given way to some of the process pursuits to efficiency, quality is still an important criterion for measuring the value of luxury goods.
As a brand that started with leather goods, Bally has also emphasized product quality in its promotion. It was one of the first Western luxury brands to enter the Chinese market. In order to promote the transformation, in recent years, Bally has settled on online platforms such as Tmall and JD.com, and selected Huang Jingyu as the brand spokesperson, while also using festival-limited series and pop-up stores for marketing.
In 2018, Shandong Ruyi and JAB Group reached an intention to acquire Bally. The deal was seen at the time as an important step in the global expansion of the Chinese fashion group. Subsequently, Shandong Ruyi was deeply involved in a debt crisis and was unable to pay the acquisition payment to JAB Group for a long time, which eventually led to the termination of the acquisition. At one point, this put Bally's China expansion plans in a passive state.
Bally's largest shareholder is still the JAB Group, but the group's core business has shifted to the coffee beverage sector. According to the Women's Daily, the Chinese market accounts for about 30% to 40% of Bally's overall sales. After the epidemic situation returned to calm, Bally's performance in China began to gradually recover. However, compared with other brands, Bally's response in the market is still relatively flat, and the lack of brand image and lack of explosive products are the main reasons.