Produced by NetEase Finance ESG
Written by Lei Yalin
Recently, clothing retail brand Peacebird (603877SH) released the third quarter of 2023. According to the report, the company's revenue fell 19% year-on-year96% to 162.2 billion yuan, with a net loss of about 41.22 million yuan.
After the highlight moment of revenue exceeding 10 billion yuan for the first time in 2021, Peacebird's revenue has now declined for several consecutive quarters. If the operating conditions reflect the "height" of the company's flight, ESG (environment, social responsibility, corporate governance) is an important factor related to whether the company's flight is "robust".
Up to now, Peacebird has not separately disclosed ESG reports or social responsibility reports, but has added a chapter on "Environment and Social Responsibility" to its annual report since 2021. How is Peacebird doing when it comes to ESG practices?
According to the latest data from the authoritative rating agency Wind Wind, Peacebird's Wind ESG rating has been upgraded from B to BB since 2020, ranking 211 out of 229 companies in the textile, apparel and luxury goods industry, and its performance in the three ESG areas is lower than the industry average.
NetEase Finance ESG noted that in terms of E (environment) and S (social responsibility) issues, Peacebird's practice in carbon reduction and carbon sequestration, social responsibility, and chain management is more prominent, while product safety and quality still need to be strengthened. In the G (corporate governance) dimension, the organizational structure adjustment has been initiated, which is expected to strengthen resource synergy, reduce costs and increase efficiency. On the whole, Peacebird still needs to improve in terms of ESG information disclosure and concept implementation.
There is a long way to go in terms of carbon reduction in production and response to public welfare
Netease Finance ESG reviewed Peacebird's 2022 annual report and found that for the e-(environment) issue, Peacebird only used one and a half pages to make a brief introduction, neither revealing the core environmental protection data such as the emission of three wastes and carbon emissions, nor describing the environmental protection measures and effects such as resource use management, waste treatment and recycling.
On the issue of carbon emissions, Peacebird's annual report mentions specific carbon reduction measures such as "installing photovoltaic power generation in the company's buildings for the use of the building". According to previous reports, taking the office building project of Peacebird High-tech Zone as an example, the reduction of total carbon emissions has been taken into account in the design of building materials, building materials production, construction, operation and maintenance, dismantling, and other stages during its life cycle. Among them, photovoltaic projects have become the main force of carbon reduction and carbon sequestration, with a carbon reduction of 1.26 million kilograms of carbon dioxide in the 50-year life cycle of the building, accounting for 3153%。
In terms of results, the carbon reduction measures taken by Peacebird in 2022 reduced its emissions by 120 tons of carbon dioxide equivalent. At the same time, Peacebird said in the report that more than 90% of the company's production is outsourced, advocating a low-carbon and environmentally friendly green office mode, and actively advocating the reduction of carbon emissions in all aspects of the production and operation process, and strictly preventing and controlling the negative environmental impact on the location.
According to the International Energy Agency (IEA), the textile and apparel industry accounts for 10% of the world's total carbon emissions, making it the second largest polluter after the oil industry. In the production process, not only does it consume a lot of energy resources such as electricity and oil, but also fiber raw materials, processing dyes or additives may also produce pollutants and carbon emissions. However, Peacebird's report did not mention other carbon reduction technologies it uses in its production and operations.
On June 1, 2021, Peacebird kicked off the "China Brand Carbon Neutrality Acceleration Action" conference at its headquarters, at which it officially announced its carbon neutrality vision and launched carbon neutrality actions. In the same year, Peacebird joined the China National Textile and Apparel Council's "Climate Innovation 2030 Initiative", and has gradually launched the product life cycle assessment to promote sustainable production and consumption by identifying the carbon footprint information of products.
In line with PEACEBIRD's commitment, the company will strive to achieve net-zero emissions across the entire value chain by 2046, achieve carbon neutrality within the scope of PEACEBIRD's brand operations by 2035, and label the carbon footprint of PEACEBIRD's 100 products by 2030.
However, according to the results of CCX's ESG rating, Peacebird's ESG rating in 2023 is BB, and its performance score in E (environment) is the lowest in the three dimensions of ESG, with only a C rating. The task of green and low-carbon transformation is imminent, and Peacebird still has a long way to go on the road to the vision of carbon neutrality.
Focusing on the S (social responsibility) dimension, although Peacebird does not disclose a separate social responsibility report or ESG report, it still has some strength on this issue. From responding to help the poor to helping the poor, to helping epidemic prevention and control; From developing local education in Ningbo to helping poverty-stricken areas across the country, Peacebird is committed to promoting corporate social responsibility through a variety of charitable and public welfare undertakings.
In terms of poverty alleviation and rural revitalization, the company has supported the counterpart assistance project in Ningbo for many years, donated more than 26 million yuan of materials to Zhenfeng County, Guizhou Province, and created the "Ningbo Peacebird Art Museum" for children; A number of designers were dispatched to help Guizhou native cloth enterprises solve the problems of production and design, and applied the Guizhou batik process to the Taiping Bird clothing, so as to drive the economic development of poor areas and realize industrial assistance. As of 2022, the total amount of donations and materials donated by Peacebird has exceeded 200 million yuan, covering 13 provinces across the country.
At the same time, in order to realize the new development of public welfare and charity, in February 2023, Peacebird Group and Ningbo Peacebird Fashion Apparel Co., Ltd. jointly donated 10 million yuan to establish the "Peacebird Public Welfare Association", focusing on sustainable development, medical education, disaster relief and poverty relief, and actively integrating into the major national strategic construction.
The quality is unstable, plagiarism "overturns", and success and failure are also publicized
As a fashion and apparel company, product safety and quality are the core issues closely related to the development of Peacebird. According to Guoxin ** data, the proportion of Taiping Bird** selling price of 500 yuan and more than 1,000 yuan is 364% and 129%；*478% and 183%, which is at a high level among similar brands. Does the high price positioning mean that the quality of the matching products is good enough?
According to the data of the Black Cat complaint platform reviewed by Netease Finance ESG, as of press time, a total of 995 complaints have been filed against Peacebird, of which 392 have been replied to, 326 have been completed, and a total of 4 complaints have been initiated in the past 30 days, all of which have been replied.
NetEase Finance ESG conducted statistics on the high-frequency keywords of the current complaints (see the figure above), and found that "delivery" is the most frequent complaint keyword, mainly involving delivery time delays, refusal to return and refund, false delivery, etc.; The word "quality" also appears frequently in the reasons for complaints, involving quality problems such as shoddy, defective stains, and broken lines.
According to the Zhejiang Provincial Administrative Punishment Results Information Disclosure Platform, in December 2021, Peacebird's Lecho underwear *** was found to have fiber composition and content that did not meet the evaluation requirements during the random inspection, and was fined 2,400 yuan for allegedly passing off substandard products as qualified products.
Another key word that comes up frequently in complaints is "deception". Some consumers expressed dissatisfaction with the false inventory in the sales of Peacebird, saying that they "released false inventory knowing that it might be out of stock, and then asked customers to cancel their orders"; There are also many consumers who complain that the promotion of Peacebird's products does not match the reality: "the down jacket marked with white duck down is goose down after receipt", "the material and fabric composition are completely different from the advertisement" after receiving the goods"...
Netease Finance ESG combing found that as early as January 2019, Ningbo Peacebird E-commerce*** was administratively punished for false propaganda that the filling was white goose down and the actual tag was marked as white duck down. Coincidentally, in March 2022, Peacebird was fined 20,000 yuan for selling fur vests to promote fox fur, but it was actually raccoon dog hair.
Judging from the top 10 appeals with the largest number of complaints related to Peacebird, the top two "return, refund" and "compensation" appeals are often related to the unstable quality control of Peacebird's products, while the "apology" appeal reveals that the company still has imperfections in after-sales service guarantee when dealing with product quality problems. Many consumers question whether Peacebird's low price is paying for high-quality product design or high advertising costs.
It is worth noting that Peacebird, which has become the "light of domestic products" in the hearts of young people with its trendy design, has been repeatedly involved in the whirlpool of plagiarism in recent years.
In October 2021, fashion blogger SOS Seamstress posted that a raccoon dog fur coat of Peacebird "copied" its brand design 1:1, and the rest of the designs were extremely similar except for the fabric material, and the topic of "Peacebird has been accused of plagiarism many times" has appeared on Weibo hot search.
In the face of doubts, Peacebird did not publicly respond to the relevant incidents, and only said in an interview that "if plagiarism is really involved, the original brand can take legal routes". At the same time, the products involved were removed from the shelves of Peacebird-related stores.
This is not the first time that Peacebird has been caught in a plagiarism storm. Previously, Peacebird had been accused of many clothing brands such as OffWhite, Frei, and Moussy, and a number of domestic and foreign artists and bloggers accused Peacebird of its original works. According to incomplete statistics, in 2021 alone, Peacebird was suspected of at least 5 plagiarism incidents.
Netease Finance ESG query Tianyancha shows that in 2021, in an announcement issued by the Suzhou Intermediate People's Court, Changzhou Aibei Clothing sued the three companies to the court for infringement of design patent rights, and the case was filed in September of that year.
According to the company's official website, among the company's nearly 13,000 employees nationwide, more than 500 belong to the fashion design and development team. However, from the perspective of R&D investment, in 2022, Peacebird will invest about 11.8 billion yuan, up from 1.8 billion last year5.2 billion yuan, down 2229%, with up to 40.8 billion yuan of advertising expenses compared with the gap is not small.
Invite traffic celebrities to endorse and launch co-branding closely following hot spots, so that Peacebird's golden sign in the young market has been "repeatedly polished"; However, some of the publicity does not match the reality, the product quality is not worthy of the first, and the design competitiveness is insufficient, which is destined to make it difficult for this signboard to maintain a lasting light.
It is worth mentioning that in the G (corporate governance) dimension, Peacebird has said that 2023 is the company's "first year of major organizational change". According to public information, at the end of 2022, Peacebird adjusted its organizational structure and transformed the original six independent business divisions - *Lecho, children's clothing, bird's nest, logistics, and online operation platform into three functional centers - product research and development center, ** chain management center, and retail operation center, so as to further strengthen the resource collaboration between brands and drive the company's efficiency improvement.
However, according to the information of directors, supervisors and senior management disclosed by Peacebird in 2022, its performance on the issue of governance diversity is not impressive. From a gender perspective, there are only 2 women serving as directors, supervisors and senior executives, accounting for 133%；From the perspective of age, only 1 person is under the age of 40, and the rest is 933% of directors, supervisors and senior executives are over 40 years old.
References:
1] "Can digitalization add points to the difficulty of self-help of domestic clothing? 》；Science and Technology Innovation Board**.
2] "From peak to frustration in two years, what happened to Peacebird? 》；Finance.
3] "Low-carbon Development, Guarding Ningbo's "Blue Sky Happiness"; Ningbo**.
4] Observation on ESG Reports of Textile, Garment and Apparel Enterprises; Rule of Law** Rule of Law Weekend.
5] "Peacebird Stops Losses, but It's Difficult to Continue to Write the Myth of Growth"; Interface News.
6] "6 points of progress in two years? What is the solution to the problem of PEACEBIRD's digital transformation"; Trade Winds Tradewind
7] "Peacebird: "Integration of Two Industries" Leads Chinese Design to "Fly" to the World"; China's strategic emerging industries.
8] "The First Loss in Six Years of Listing to Welcome the "Tide of Store Closures", Peacebirds Want to "Fly" is Difficult"; Investor.com.
9] "Peacebird, which earns 900 million a month, was fined for false propaganda and was previously caught in a "plagiarism" storm"; The Beijing News.