Author | Ding Qianwen Edit | Fan Zhihui
K-Pop is becoming more and more popular in the mainland, but South Korean audio-visual platforms are facing cross-border landing.
On April 19, with the release of return materials by K-Pop artists such as SEVENTEEN, aespa, and LES ERAFIM, the "China-lose war" also kicked off. When SEVENTEEN took the lead in becoming the first Korean group to lose more than one million, the Korean audio and video platform KMStation (hereinafter referred to as KMS) also took advantage of the victory to launch platform offers such as flash cards and selfie cards, continuing to attract fans to place orders.
However, despite KMS's many benefits, it is inevitable that many fans will be included in the "blacklist".
As early as early April, KMS was frequently rumored to be closed by fans who were late in receiving the album, and it was once "crusaded" by fans for refusing to refund and no news of delivery, and was pointed out by some offline album stores in the mainland as suspected of smuggling audio and video publications. However, according to a statement issued by KMS on April 7, due to the change of its business name, the original company is going through the process of deregistration, and the new company is operating normally. But this statement is not bought by consumers.
However, this farce, which looks like gossip, has also invisibly set off a "gray area" that wanders away from the mainland on Korean audio and video platforms.
The "butterfly effect" caused by the explosion of lightning on a cross-border audio-visual platform
In fact, as a Korean audio and video platform, KMS is positioned as "a fan circle star chasing shopping platform specially created for fans at home and abroad", and has a special Chinese app, website and micro-store store "KR-AM video store" to provide one-stop overseas direct mail and micro-store sales order purchase services.
But just as the so-called cunning rabbit has three caves, the seemingly legal and compliant buying and selling transactions are actually hidden secrets.
According to the recent feedback from consumers who purchased albums on the platform, KMS's delayed delivery for half a year or even a year is not uncommon, and some consumers complained to the regulatory platform in February this year, saying that "according to the page, it should be shipped within 7 days, but it has not been shipped so far, and the refund email is also refused to be refunded." Many fans who have suffered the same experience have also defended their rights through 12315 and 12345, but few have succeeded.
According to netizen "Two People and One Fish", after learning that BLACKPINK-related direct mail products ordered from the KMS App port have unofficial product risks, he called 12315 to complain about one of KMS's business entities, "Beijing Xinghui Audio and Video Products Store".
However, according to the Beijing Shunyi District Supervision Bureau, to which the company belongs, Beijing Xinghui Audio and Video Products Store has provided certificates confirming that it is not the current operator or partner of KMS. AT THE SAME TIME, THE REGULATORY BUREAU ALSO INDICATED THAT THE REGISTERED LEGAL PERSON OF KMS KOREA COMPANY IS CALLED "LI HUANHUAN", AND THE ACTUAL ONE THAT CAN BE QUERIED IS THE LEGAL PERSON OF "SHANGHAI ZHIYOU CULTURE" COMPANY.
It is worth noting that "Shanghai Zhiyou Culture" is the company belonging to the new Sino-Korean cooperation audio-visual platform TOU Market, which will soon set up online and offline stores in the mainland market.
According to KMS's public business licenses and permits, new "vests" such as Xingmeng Bookstore in Xiangcheng District and Fengwantu Store in Chaisang District are also shells for KMS to obtain business licenses and permits in the mainland. Tianyan investigation shows that these "vests" have all been cancelled or operated abnormally recently, and after investigation of KMS by the Chaisang District Cultural and Tourism Bureau, it found that KMS has recently registered more than 2,000 business licenses and permits, and the addresses used are all false content.
On the same day that KMS issued a statement clarifying the "rumor-mongering", the person in charge of the "Daifuku KPOP Album Store" in Xiamen issued a reprimand to KMS, saying that the store originally scheduled to open in April has now been reported for rectification, because nearly 800 albums purchased from KMS have been investigated and confiscated by the local cultural and tourism bureau because they cannot provide import and export certificates for publications.
After the seizure incident, KMS staff disappeared without replying to messages or blocking. Daifuku KPOP album store also reported to the police in Shunyi District of Beijing and Chaisang District of Jiangxi Province one after another, and pointed out that the clarification statement issued by KMS was not true, "(KMS) WeChat Store guaranteed to have import and export certificates and backups in advance, and later said that it was not qualified to provide it to us, shirking responsibility." ”
In addition, there are also record store owners in Qingdao, Shaanxi and other regions on major social platforms, but because the amount is small and it is a personal act, they have received certain refunds and refunds.
Under the review of successive complaints, KMS also closed its store at the end of March and changed all the links to the sale of spot albums in its stores on the micro-store platform with "direct mail".
Another person familiar with the matter revealed that KMS's move was due to the fact that it did not have the qualifications to sell overseas audio-visual publications in the form of "spot", and its business scope indicated on the business license provided by the e-commerce platform was Internet retail.
"Generally speaking, overseas direct mail albums cannot be circulated and traded in the mainland market. However, in order to sell overseas albums in the mainland, it is necessary to have a business license, publication permit, import and export certificate for each audio-visual publication, customs declaration, customs clearance certificate, etc., which can complete the import filing procedures, which is equivalent to having a proof of legal source and a complete import and export qualification certificate before you can sell spot goods. ”
At present, the KR-AM video store and the second store operated by KMS on the micro-store platform can no longer search for any spot links.
Daifuku KPOP Album Store also admitted frankly, "KMS has blocked us, and refused to submit certificates, is not qualified to sell spot albums, is suspected of distributing a large number of illegal imported publications, and we have not faced administrative penalties from the publication business unit established in accordance with the law, and are busy cooperating with relevant departments to inspect and entrust lawyers to prosecute materials." ”
To put it bluntly, KMS is already within the scope of illegal smuggling.
However, it is worth noting that according to the registration status of KMS App on the official website of the Korean government, the operator is from a company called "MS International Co., Ltd.", which has ceased business on November 11, 2022. In other words, KMS's overseas direct mail, sales and other business activities in Chinese mainland in the later period are also suspected to have no business qualification in Korea.
However, according to the statement released by KMS a few days ago, although it indicates that it is a "corporate change", it is still focusing on cooperating with well-known Korean brokerage companies such as SM, JYP, YG, CUBE, etc., and is also regarded by fans as an "endorsement" in the name of others, but it is silent about defaulting on shipments and refunds. A small number of successful consumers who have successfully defended their rights have also been blacklisted by KMS, banning user App accounts and WeChat store accounts.
It is not difficult to see that the illegal operation of Korean audio and video platforms involved in the collection of offline album stores has also exposed the behavior of Korean audio and video platforms to plunder the mainland fan economy at the edge of the rules, which is actually full of security risks.
Why is cross-border "cutting leeks" so chaotic?
As a big cake of "fan economy" that has not yet been eaten and wiped clean, the mainland market still has dividend value to be tapped.
According to South Korea's import and export trade data, the export scale of K-Pop records reached 230 million US dollars last year, an increase of nearly 10 times from 24 million US dollars in 2012; Among them, the Chinese mainland of imports affected by the epidemic still set a record of 51.33 million US dollars in K-Pop record imports, becoming the second largest contributor after the Japanese market, an increase of about 3% compared with 2021.
This year, the ranking competition between the mainland K-Pop fan groups around the sales of China has also become more intense, not only SEVENTEEN became the first Korean group to lose more than one million in the first album in 8 days of pre-sale, but aespa, les SERAFIM, IVE, etc. have also set new records in five generations of girl groups.
It is worth noting that even if the global export scale of K-Pop records has made a breakthrough increase, according to South Korea's "East Asia Daily", looking at the world market, K-Pop record sales in 2022 will account for only 2% of the total global record sales, in fact, it is difficult to match the sales ratio of the three major records of Universal Music, Warner Music and Sony Music to account for more than 60%.
This means that the $230 million export scale created by K-Pop records last year is not optimistic in comparison, and if it wants to gain a foothold in the international market, its record sales growth still needs to be made in overseas markets with a significant long-tail effect. Compared with the online and offline improvement of Japan's local record distribution system, Chinese mainland is still "in ruins", which also gives Korean audio-visual platforms the opportunity to take advantage of the void.
At present, in addition to KMS, Ktown4u, StarRiver, Yetimall, WITHMUU and many other Korean audio and video platforms have also taken root in the mainland, but compared with KMS's multi-channel sales form, Ktown4u, Yetimall and other platforms still adopt a more secure overseas direct mail method to sell albums to China.
This is also because overseas direct mail, unlike imported audiovisual publications, is a common trading method for Korean audiovisual platforms. And most of these platforms also offer limited offers and platform benefits to mainland fan groups, such as region-limited video signing parties, undisclosed limited bonus cards, etc., and even according to local conditions, it has also spawned new audio-visual platforms such as TOU for Sino-Korean cooperation. However, the channel of overseas direct mail is also inevitable because it is an overseas account collection, which makes it difficult for fans to refund once they place an order.
In order to compete for customer consumption, platforms have also reached cooperation with artist fan stations in the form of "purchasing and losing sales" at group buying prices lower than those in other countries and regions such as South Korea and Japan. This kind of overseas direct mail implemented in the name of group buying actually allows these audio and video platforms to evade certain import tax payments, and provide fans with non-after-tax pricing and rebate points to achieve high sales.
For example, in the order link opened by the platform in the name of a fan site, if the order quantity exceeds the number of discussions, the fan site has the opportunity to receive a quantitative percentage as a "subsidy". Yoyo, who used to be the manager of a fan station of an NCT team, said, "Although nominally the fan site only provides a link to cooperate with various platforms to place orders, there will be an estimate of how many people will place orders in this link, and the fan site will deliberately remind you to place orders at this link, and if you don't worry about sales, the K-Pop artist fan site will have a higher percentage of cuts." Platforms compete for fan consumption, not only to avoid paying high taxes in the form of overseas direct mail, but also to have greater publicity channels, which is a harmless way of cooperation. ”
However, she also pointed out that as fans gradually develop fixed purchase preferences and have their own trusted platform, "No matter which platform the fan station cooperates with to open a group purchase link, fans actually have their own choices and will not be influenced by the fan site, so the rebate cooperation gradually disappears, the fan station no longer has a highland advantage, and the platform has the right to speak." ”
This change is also reflected in the price fluctuations of fan sites and platforms for group purchase price negotiations, "At least before 2019, fan sites with a certain number of fans in the mainland jointly lower prices on the platform, and they can basically talk about a relatively cheap price." Assuming that the price of an album is converted to about 110 yuan at the exchange rate, the Chinese mainland can press the group purchase price ranging from 60 yuan to 80 yuan, which is far lower than that of other regions. ”
However, with the post-epidemic epidemic, the global market's consumption of K-Pop in 2020 and 2021 has become more and more high, and the gap between K-Pop artists and the loss has become more and more obvious, which has also prompted the platform's album pricing in the Chinese market to gradually match that of other regions, "This is because some brokerage companies explicitly prohibit the platform from giving mainland fans group buying discounts, and the loss is not optimistic, and the platform cannot accept the price reduction." For example, the Chinese fan station of the boy group ENHYPEN once jointly pressed the price to K4, but in the end it was not cheap, because the loss was indeed less than 20,000 copies, the amount was small, and it was basically counted in K4 orders. ”
But paradoxically, some personal daigou can cooperate with the platform to obtain a low price. According to the chat records published by ENHYPEN fan sites, after the joint price reduction failure of the fan site, a sales link of about 20 yuan opened by a certain person to purchase and Ktown4u appeared. Ktown4u explained that it would be "forcibly removed from the shelves and will not be out of the warehouse", but did not respond to fan sites' questions about its "internal channels". This also means that regardless of whether it has a large price reduction, the platform's initiative to influence the mainland fan market is gradually rising.
Such a steady profit in the audio-visual circulation business has also led many mainland platforms to enter one after another.
As early as around 2015, the two fan platforms of Yinyuetai and idou have tested the waters to open "Yinyue Mall" and "idou mall", and reached authorized cooperation with Korean brokerage companies to carry out formal sales in the form of imported audio-visual publications; After the emergence of main e-commerce pan-entertainment apps such as OWhat and Gongyu, it also established cooperation with Korean audio and video distributors Kakao M and YG Plus, opened up the logistics business sector in South Korea, became an online platform for domestic self-owned agency direct mail, and at the same time completed the one-stop synchronous parallel sales method of overseas direct mail and import sales, following the Korean local platform to build offline book signing parties and offline K-Pop album stores in the mainland.
Nowadays, under the collection of past experience, the emergence of Chinese and Korean distributors such as Nanyi and idol convenience stores has further relied on logistics, price and other advantages to seize this market, and these platforms are mostly sold by overseas direct mail. Of course, this situation that causes a blowout of various similar platforms is also because everyone wants to get a piece of the "fan economy".
However, due to the high tariffs, formal imports are not conducive to the advantage of after-tax price differences between platforms, and at present, only offline formal sales such as Gongyu and WeChat Park with "gold label" certification have the qualification to sell audio-visual publications, and the prices of the records sold are also higher than those of group purchase direct mail.
The clerk of Beijing has always been entertaining store pointed out, "Although offline sales are tens to hundreds higher than direct mail, this is also an after-tax price based on tariff adjustments, and direct offline sales without filing are illegal and will face penalties such as closing stores and sealing." Therefore, most fans who are worried about the flaws of online purchases and spend offline can understand the problem of higher pricing than direct mail. ”
This also exposes the lack of certain supervision and regulation of direct mail spawned by overseas audio-visual platforms in the mainland. As mentioned above, KMS can rely on direct mail to pass the album and then convert it into a micro-store "spot", and create more than 2,000 false business licenses and permits, which is already a fatal loophole. Correspondingly, "backdoor" re-emergence is also an unavoidable means, such as the recently released audio and video platform TOU, which is the "one mother compatriot" of KMS.
It can be said that the sales form of overseas direct mail also has a certain gray transaction because there is an order before the quantity, and it goes directly to the consignee without going through a third party, which provides certain tax avoidance convenience for Korean audio and video platforms. After all, purchasing goods in South Korea according to the volume of orders imported in China not only avoids the crisis of stockpiling, but also has low pressure on capital turnover, even if the delivery customs clearance time is longer, but this cost is also transferred to consumers.
It can be seen that the long-term and high consumption value brought by China Transmission will also make more and more Korean local audio and video platforms and Chinese fan platforms follow suit.
epilogue
Even if KMS still endorses its multi-year partnership with SM, JYP, YG and HYBE in the announcement, the pale explanation has not been able to redeem the trust of consumers.
As an overseas e-commerce trading platform, if the Korean audio-visual platform only wants to salvage a steady stream of fan economy in a foreign country, but does not improve the operation system, the thunder explosion is also expected. After all, with the entertainment and micro-store Park first, the pricing and sales of its after-tax albums are not unacceptable to the fan market, but more concerned about convenience and real experience. Therefore, the introduction of publication import and export contracts signed by Zhongtu and Waitu Group has become a formal and legal channel chosen by most offline KPOP album stores.
As the so-called Chengye fans, defeated fans, fan economy is not a consumable that can be coveted once and for all, audio-visual platforms also need to comply with laws and regulations, otherwise it is difficult to guarantee that it will not be the next "Korean version of Owhat" outbreak in the mainland.
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