According to CCTV Finance reports, the National Enterprise Credit Information Publicity System recently showed that Hiji (Shanghai) Trading Co., Ltd., an affiliate of the high-end down jacket brand Canada Goose, has been slapped with a new administrative penalty. The reason for the penalty is exploitation. Advertisements that falsely promote goods or services, deceive and mislead consumers, are fined 450,000 yuan, ordered to make public corrections and stop publishing.
Canada Goose's down jackets once set off a craze among Chinese consumers. At the beginning of this year, Canada Goose in Shanghai was snapped up like crazy. The queue time at the flagship store ranged from 1 hour to 3 hours. Down jackets priced at nearly 10,000 yuan are almost sold out.
After the relevant news was released, #CanadaGoose was fined 450,000 yuan for false advertising# became a hot search on Weibo.
Some netizens commented: Canada Goose should be renamed Canada Duck!
The proportion of duck down is much higher than that of goose down
Canada Goose was fined 450,000 yuan for false advertising
So, why was Canada Goose fined?
The administrative penalty decision letter shows that the party involved, Xiji (Shanghai) Trading Co., Ltd., is mainly engaged in the sales of "CANADA GOOSE" brand down jackets. Since September 2018, the parties have opened the "CANADA GOOSE official flagship store" on the Tmall platform and entrusted Shanghai Bodao Business Co., Ltd. to carry out daily operations, maintenance and product release. Starting from the same month, the website published the text "All of our down blends contain Hutterite down, which is the finest and warmest Canadian down."
The investigation found that Hutterite down refers to the down of ducks and geese collected from the Hutterite community breeding area in northern Canada. The investigators learned from the China Down Association and the Shanghai Garment Industry Association that the thermal insulation performance of down is directly related to the two indicators of down filling and down content. These two indicators are affected by the growth cycle of geese and ducks. The longer the growth cycle, Longer, the higher the maturity of the down, the stronger the warmth retention; the down quality of large and mature birds is the best.
Therefore, when the birds are of the same species, the quality of down is related to the maturity of the birds and has nothing to do with the place of origin or climate. The party's emphasis on the origin of "Hutterite" to demonstrate the warmth of down has no factual basis and is inconsistent with the actual situation. It will also have a substantial impact on consumers' purchasing behavior. This behavior violates Article 4, paragraph 1, of the Advertising Law of the People's Republic of China and constitutes false advertising.
In addition, the investigation also found that among the 190 types of down clothing sold by the parties, goose down products accounted for approximately 16.8%, and duck down products accounted for approximately 83.2%. In other words, most of the down jackets it sells do not use high-fill goose down with better thermal insulation properties, but duck down with lower fill power. Therefore, the party concerned made a general statement that the down used in its products was "excellent". And the warmest" is inconsistent with the facts.
Li Yuan, a partner at Beijing Jingshi Law Firm, said that Article 4 of the Advertising Law of the People’s Republic of China stipulates that advertisements must not contain false or misleading content, and must not deceive or induce. consumer. In this case, the operator of Canada Goose claimed in the product introduction that the duck down from a certain place of origin was the warmest duck down in Canada. Such a description obviously violated the provisions of the Advertising Law of the People's Republic of China on false advertising. specification.
In addition, the administrative penalty decision stated that Canada Goose’s official Tmall flagship store published in the “Refund Instructions” that “involving damaged or used goods, if there is a refund due to quality problems, if there is any If necessary, it must be authenticated by the authoritative quality inspection department or Canada Goose’s quality department. Canada Goose reserves the right of final judgment.”
This clause expands its own right to judge the product without authorization. It excludes other rights that consumers should enjoy according to law due to product quality defects. Subsequently, the Canada Goose flagship store revised this clause.
The administrative penalty decision stated that in 2020, the Canada Goose Tmall flagship store webpage received 181 million hits and sales reached RMB 167 million. The advertisement involved in the case has a certain social impact.
In accordance with Article 55 of the Advertising Law of the People's Republic of China, the market supervision department decided to impose a fine of RMB 450,000 on the party concerned and order it to stop publishing illegal advertisements and eliminate the impact within the corresponding scope.
CCTV Finance stated that the reporter contacted Xiji (Shanghai) Trading Co., Ltd. by phone many times, but received no response.
Economic Daily commented:
As long as you operate in China, you must abide by Chinese laws
It is worth noting that the Economic Daily published an article titled " Catch the lying Canada goose! "Commentary article. The article stated that the main filling is ordinary duck down, but it often costs tens of thousands of dollars per piece. Is the Canada Goose down jacket sold for a thermal insulation fee or an IQ tax?
The article pointed out that supervisors checked the overseas official website of the Canadian Down Association and found that there is a down with a fill power of 1,000, which is the highest quality down in Canada since the test; they also checked the overseas official website of the Canada Goose down supplier. The official website confirms that it is aware of the existence of down with a fill power of 1,000, but the down purchased from Canada Goose has a fill power of only 800.
Fashionable women’s down jackets in the Canada Goose store (data map, photographed by reporter Dong Xingsheng)
The article stated that Canada Goose may not have carefully studied China’s advertising laws and ignored them. changes in the Chinese market. It was originally filed because of the use of "superlatives" prohibited by advertising laws. Deceiving and misleading consumers with false advertising is the main reason why it was fined this time. At the same time, the regulatory authorities also urged it to correct the illegal behavior of using format clauses to exclude consumers' legitimate rights. It is hoped that all enterprises, whether Chinese or foreign, will take this as a warning and abide by Chinese laws as long as they operate in China.
The article stated that foreign moons are not rounder, and foreign down jackets are not warmer. Whether it is giving yourself a foreign name, changing the place of origin, or promoting foreign brand premiums or even false publicity, it is not the right way. Enterprises should win on products and services. In recent years, consumers are no longer superstitious about foreign brands. Chinese brands are on the rise, and there is a strong momentum that I will be proud of using domestic products. Chinese companies should seize the opportunity, strengthen research and development, optimize operations, and use upright national trends to compete fairly with foreign brands.
Sales in the Chinese market have soared
According to data, in 1957, the predecessor of Canada Goose was born in a small warehouse in Toronto. Founder Sam Tick named the company Metro Sportswear. , specializing in wool vests, snow suits, etc. It wasn't until the 1970s that Sam Tick's son-in-law David Reiss invented a new down filling machine, ushering the company into a new era. David also founded the Snow Goose trademark, which later evolved into Canada Goose, which has grown into the world's leading luxury apparel manufacturer.
In 2017, Canada Goose ushered in a bright moment. The company was listed on the Toronto Stock Exchange and the New York Stock Exchange at the same time, and entered the Chinese market in 2018.
On August 13, the performance data disclosed by Canada Goose for the first fiscal quarter of fiscal year 2022 (March 27 to June 27, 2021) showed that in the three months ending June 27, 2021 Within a month, Canada Goose achieved sales of CAD 56.3 million, a year-on-year increase of 116%, of which direct-to-consumer sales were CAD 29.4 million, wholesale revenue was CAD 25.8 million, and e-commerce business increased by 80.8%. However, while revenue is growing, the company's losses are expanding. During the reporting period, Canada Goose's net loss expanded to CAD 58.4 million from CAD 48.19 million in the same period last year. The company stated that the loss was mainly due to the adjustment of the group's channel layout. Big cost.
During the reporting period, Canada Goose achieved triple-digit growth in the Asia-Pacific, Europe, Middle East and Africa regions. North America and Canada also surged by 70% year-on-year. The Chinese market was the fastest to recover from the epidemic. It has become the main growth engine, with direct retail sales soaring 188% year-on-year.
On the other hand, in view of the high demand in the Chinese market, Canada expects to open three new stores in China this fall. At the beginning of this year, Canada Goose also worked with its first specially invited guest designer Angel Chen to create a new joint capsule series. The products, priced from 4,800 yuan to 14,600 yuan, were popular in the market as soon as they were put on the shelves.
Since the global epidemic has not yet ended, Canada Goose has not given performance guidance for the full year of fiscal year 2022, but it is expected that wholesale revenue in the second fiscal quarter will record low double-digit growth year-on-year. Direct sales The retail business is expected to surge one and a half times compared with the same period last year, accounting for 70% of total revenue.