Five law firms in the United States bring lawsuits against Poly-Mei

Absrtact: From the founder began to gather beauty excellent product has never fled the public opinion whirlpool, however, whether the founder Chen Au the controversy caused by self packaging, or the United States on the platform of the true and false goods questioned, has not hindered its successful listing. But lately, the bad news about the beautiful thing

From the founder began to gather beauty excellent product has never fled the public opinion whirlpool, however, whether the founder of the Chen Au packaging caused controversy, or the United States on the platform of the true and false goods questioned, has not hindered its successful listing. But the recent "bad news" from the United States has been so ferocious that the company faces its biggest crisis since its birth.

Since the media exposure in July this year, the third party platform sales counterfeit luxury goods, December 13 to December 16, the United States five law firms also filed a lawsuit against Poly Mei, announced that will investigate the potential financial fraud problems. Among them, JOHNSON&WEAVER.LLP and the Rosen law firm firm, on behalf of May 16, 2014 to November 20, bought Poly-American equities and collectively issued lawsuits to investors.

The lawsuit pointed out that gathers the United States excellent product to change the revenue model without authorization, will "the Electric Business Platform service mode" to "the proprietary commodity sale model" will bring the huge risk to the future performance, violates the listed time to the investor promised "expands the market share, expands the category" the pledge.

The so-called electric business Platform service model is through the cooperation with Third-party sellers and the expansion of the platform category, such as commodity sales. Poly-Beauty products in the IPO has promised investors, after the listing will continue to expand the category and brand, and through Low-cost sales, in exchange for huge consumer traffic. Investors are worried that Poly-Mei products are now turning to the model of proprietary business. If so, the third party platform on the large brands and the flow of many categories brought about by the dividend once lost, poly-US-quality proprietary business will be difficult to continue to attract consumers to the platform shopping. This is the heart of the lawsuit.

December 22, the United States related to the interface of journalists confirmed that the current Poly-Mei has indeed stopped expanding the third party platform business category, of which cosmetics gradually to the self change, the third party platform will only retain clothing category. At the same time, through the "top-speed duty-free shop" mode of overseas business to make up for Third-party platform vacancies.

"This is a company where some firms and lawyers are focused on falling stock prices and looking for profit opportunities," the official said.

Previously, the third party platform accounted for the overall GMV of the United States (total commodity trading) ratio of up to 48%.

It can be said that Poly-Mei products are forced to terminate the third party on the platform of cosmetics business, it will not be able to solve the problem after the market has been plagued by a long time. In July this year, the media disclosed that Poly-Mei excellent products on the sale of "overseas suppliers to purchase authentic", in fact, from the domestic generations of factories, is the real fake. and implicated a series of electric dealer website third party platform suspected of selling false question. The exposure also shows that once the third party platform opened, the identification of genuine and false products have a certain difficulty, this is Taobao, Beijing and east have not been fully resolved the problem.

Poly-Mei Excellent product business is mainly divided into Third-party platform business and proprietary business. One of the proprietary business under the other part of the procurement Department, on behalf of the factory operating its own brand (hereinafter called OBM), the key Customer department (Key account, also known as Ka) and buy hands. According to the interface News reporter understands, the third party platform's luxury business also has been cut off by the United States excellent product.

What we can do now is only to let go.

Previously in order to ensure that the remaining proprietary platform merchandise for the genuine, Poly-Mei Excellent products set up a "genuine alliance", with the consumer Association, China, such as the quality of thousands of miles and other departments and agencies jointly launched Anti-counterfeiting code system. But since joining the alliance requires branding to add a barcode to the production line, complicating the process and increasing the cost of the product. In addition, the use of the bar code is only a good product of the electronic Business platform, and the addition of the cat, only products and other platforms do not need these processes, so the brand side is more like a burden.

A cosmetic industry person told the interface, the brand side of the United States in the request to add security code on the product has been quite a criticism. "Generally speaking, the brand in the selection of electric power channels only value whether the amount of travel, the other procedures the more refined the better." Poly Beauty Products If the requirement to add bar code, the advantage is more for the United States platform Fidelity. However, at present, many brands to choose the power channels or to clean up the end of the goods, add the bar code undoubtedly added to the cost, and this cost is still relatively high, unless the United States to stick their own money to brand-side stickers. "The person said.

Poly United States also admit that in the genuine alliance of the matter spent their huge funds, and the brand negotiations with some difficulties, but for the platform of all the goods fidelity, the alliance of genuine things must be advanced. At present, there are some brands to focus on the United States and the user group and single product sales, but it is difficult to obtain a single brand of the whole product cooperation.

Interface journalists from the mainstream cosmetics brand insiders learned that the security code not only in the domestic brand implementation difficulties, for some imported cosmetics from abroad, the need to import goods to the domestic warehouse after the label, but the label is applicable to imported cosmetics, there is no precedent in China. At present, the United States excellent products platform has Maybelline, l ' Oreal, Olay, Julie, etc. nearly 150 brands have joined the Anti-counterfeiting code system, but these several brands are currently located in the country.

The process of cumbersome "genuine alliance" has affected the development of the procurement department, coupled with the Third-party platform business has ceased to expand, the United States, the revenue pressure of the natural transfer to the remaining private brands, key customers and buy hands. A reliable source of information to the interface of journalists confirmed that at present, the United States in the proprietary business has shifted to the development of higher-margin "private brand" part.

In fact, in order to maintain financial performance, its own brand has been the United States excellent products in recent months to actively try one of the directions. It is through with the cosmetics supplier and the factory cooperates, uses imitates Gazi the way own creation brand The cosmetics, eliminates the cooperation with the mainstream brand the agency fee, may obtain up to 70% gross margin, certainly also can guarantee the cosmetic to have the genuine barcode.

The problem with this is that the United States seems to be on the road to the Lok Bee Network, and the original and Le bee mode is different, it is the investment side is willing to choose to promote the United States rather than the Lok Bee listing reasons.

Le Bee Network has long been the flagship of its own brand, through the beauty of the talent with small p, Kevin endorsement cooperation to jointly shape the promotion of cosmetics brands, and even try to control the upstream industry, to establish their own research and development team. "It is almost as difficult as creating a ' l ' oreal". "The essence of a cosmetic electric trader is to do a good job in the business of operation and flow, but it takes more than 10 years to go backwards to build a brand," a cosmetic practitioner told the news reporter. "And the capital market is obviously not optimistic about the model of its own brand, the final Lok bee nets in the eve of the IPO, announced by the only goods will be acquired, become the only product club expansion of the United States makeup category."

Owning a brand is really hard to achieve in the short term. November 2014, the United States released the third quarter results, the total revenue growth of only 28% year-on-year, and competing goods company only the same period growth rate of 130% is very far. This is the United States since the listing of the lowest revenue growth of a report, become investors seriously questioned the health of the United States good product operation is the fuse. According to the interface of journalists understand, Poly-Mei also spent a certain amount of funds in the promotion and packaging some of their own brands, such as Yue has the United States, mimime, flower field color, Hippo home, but the results are very little.

In addition to the profits of the pressure is also spread to the second highest profit of the key customer department, the department is responsible for and some brands to obtain exclusive channel sales cooperation, but the current brand is extremely limited, in addition to Morita pharmaceutical makeup and Julie and other a small number of brands, the rest are three or four lines of unknown brands

Poly-beauty products are doing their best to try to get through the most dangerous after the listing. At this time just comment Chen Au whether excessive packaging, whether "hard to manage" poly beauty has lost significance, after all, the capital market only care about risks and benefits, and do not care who for the company endorsement.