Daily Consumer News, on December 19, Hongxing Erke donated 20 million yuan of materials to the disaster-stricken areas in Gansu, which attracted widespread attention.
In the afternoon of the same day, Hongxing Erke anchor said in the live broadcast room that because the time is relatively rushed, they have sent the materials over at the fastest speed, and the materials are currently on the way. As for whether there will be follow-up investment, the anchor said that the follow-up materials are also in preparation and will be sent as soon as possible, and they will continue to pay attention to the disaster situation and do their part.
In this regard, some netizens praised it"Support domestic brands! At the critical moment, we have to take action with domestic products to tide over the difficulties together, and if one side is in trouble, all parties will support"、"A thousand words, but not practical actions, Hongxing Erke is the pride of Fujian"、"It really deserves to be the light of domestic products"Wait a minute.
He was suspected of falsifying financial data
According to the data, Hongxing Erke was established in 2000 and started in Jinjiang, Fujian, the "shoe capital of China".
Similar to the start-up road of most footwear and apparel brands, Hongxing Erke started from OEM and OEM. However, the company gradually realized the passivity and development limitations of OEM, so it turned to building its own brand and quickly launched the brand with celebrity endorsements.
In 2001, Hongxing Erke hired Chen Xiaochun as the brand spokesperson and gradually opened up its popularity; When major domestic and international giants have seized event resources, Hongxing Erke focuses on the field of tennis, cooperates with well-known events, and lays a foundation for sports resources in tennis events.
In 2005, Hongxing Erke ushered in a highlight moment and was listed on the main board of Singapore, becoming the first sports brand in China's industry to be listed overseas.
After the listing, Hongxing Erke used the funds raised to increase expansion and open stores while investing heavily in marketing. But in 2007, Hongxing Erke's business took a sharp turn, because most of the stores could not be profitable, they fell into losses one after another, and finally had to close a large number of stores.
In February 2011, due to the suspicion of falsification of financial data, it was found that its cash and bank deposit items were actually only 26.3 billion yuan, inflated cash and bank deposits reached 115.4 billion yuan.
According to the announcement disclosed by Hongxing Erke earlier on the Singapore ** Exchange, in 2018, Hongxing Erke lost 29.8 billion yuan, and in 2019, the loss figure shrank to 29580,000 yuan. In the first half of 2020, the loss shrank again to 600,000 yuan. Since then, Hongxing Erke has been delisted, and no public financial data has been disclosed.
In October 2020, the list of "Top 100 Private Enterprises in Fujian Province in 2020" released by the Fujian Federation of Industry and Commerce showed that Hongxing Erke's revenue that year was 284.3 billion yuan.
has been silently doing public welfare
In fact, in recent years, Hongxing Erke has been silently doing public welfare.
In 2008, Hongxing Erke donated 3 million yuan in cash and 3 million yuan in materials to Wenchuan through the Red Cross Society of Fujian Province; In 2013, Hongxing Erke joined hands with the Fujian Disabled Persons' Federation to donate more than 25 million yuan of love materials; From 2012 to 2017, a total of 25 million yuan worth of clothing was donated to poor disabled people in Fujian Province and Xinjiang and ** regions supported by Fujian; In 2018, it donated 60 million yuan of love materials to the Fujian Provincial Welfare Association for the Disabled; In 2019, it donated 100 million yuan to the China Disabled Persons' Federation; In 2020, donated materials worth 10 million yuan to Wuhan.
In July 2021, a rainstorm disaster and a material donation of 50 million yuan sent Hongxing Erke, which had been silent for a long time, to the hot search.
720 "Heavy rain hit Zhengzhou, one side was in trouble, and all sides supported. At the same time that Alibaba, Tencent, ByteDance, Meituan and many other industry giants generously donated money to the disaster area, on July 20, Hongxing Erke's official Weibo announced that it would donate 50 million yuan of materials to Henan.
In comparison, Anta, Li Ning, Xtep International, and 361 Degrees will each have annual revenues of 355 in 2020100 million yuan, 1445.7 billion yuan, 817.2 billion yuan, 51With 2.7 billion yuan, Hongxing Erke's revenue is far lower than that of its competitors, less than 10% of Anta and 20% of Li Ning.
Netizens commented, "I feel like you're going bankrupt and you donate so much", "500,000 celebrities directly rushed to the hot search, 50 million conscientious enterprises have more than 100 comments, and only 2,000 likes". It is precisely because of the uneasiness of many netizens that topics such as "Hongxing Erke's Weibo comments are so sad" have also rushed to the hot search, and some netizens have recharged their members for 10 years when they saw that Hongxing Erke's official Weibo had no members.
On the evening of July 22nd, "Hongxing Erke's official live broadcast room has skyrocketed in popularity and is very lively, and the live broadcast venue with only 3 staff members on weekdays has temporarily called more than 10 employees to fill the position, and work overtime until late at night.
At 1 o'clock in the morning on July 23, Wu Rongzhao, president of Hongxing Erke, hurriedly drove to the live broadcast site to thank netizens. According to the anchor, the live broadcast room, which usually has only a few thousand **, ushered in 2 million onlookers that night, with as many likes as high as 20 million, and many products were out of stock and off the shelves.
After becoming popular, Hongxing Erke's public welfare undertakings have not stopped.
On October 10, 2021, Hongxing Erke announced the donation of 20 million materials to Shanxi.
On March 18, 2022, Hongxing Erke donated materials worth 5 million yuan to Jilin Yi** Association to help front-line epidemic prevention workers.
On March 18, 2022, Hongxing Erke donated materials with a total value of 5 million yuan to the Quanzhou Red Cross Society to help front-line epidemic prevention workers, and provided nearly 500 new talent apartments with complete living facilities to Licheng District** of Quanzhou for temporary isolation points for the epidemic.
On July 30, 2022, Hongxing Erke's official WeChat announced that it would donate 100 million yuan to the Fujian Provincial Welfare Association for the Disabled, which will be used to help the disabled groups in difficulty.
In Hongxing Erke's view, enterprises are an indispensable part of society, and to obtain resources from the society, they should repay the society and bear certain social responsibilities. An enterprise should not only care about the benefits of its own business, but also have a strong sense of social responsibility, give back to the society, and help the disadvantaged.
What other domestic sports brands are donating?
While Hongxing Erke is actively donating, other domestic sports brands are not far behind.
In February 2020, Xtep Group announced that it would donate equipment worth 20 million yuan to Hubei; Anta Group donated a total of 31 million yuan; Li Ning Hubei Branch donated 1 million yuan and some medical supplies, and Li Ning Group donated an additional 10 million yuan through the China Charity Federation; 361° Group urgently procured 2,000 sets of medical-grade goggles and protective clothing in the United States, and later donated RMB 10 million worth of cold and sportswear to Hubei Province through the China Youth Development Association.
In the heavy rain in Henan in July 2021, Xtep joined hands with brand spokesperson Fan Chengcheng to donate shoes and clothing equipment worth 30 million yuan to the "Henan Heavy Rain Emergency Relief" project through the China Poverty Alleviation Association. 361° Group donated cash and materials worth 10 million yuan to Henan Charity Federation, and at the same time, 361° Zhengzhou Branch fully helped flood relief and post-disaster reconstruction. ANTA Group donated a total of RMB50 million in cash and equipment to the Henan Charity Federation.
In October 2021, during the heavy rain in Shanxi, Xtep Group donated 25 million materials to Shanxi; 361° Group announced the donation of 20 million yuan in materials to Shanxi; ANTA Group announced a donation of RMB 20 million in cash and materials to Shanxi.
In August 2023, during the Beijing-Tianjin-Hebei flood disaster, Li Ning Group donated 25 million yuan of materials through the China Women's Development Association; ANTA Group donated RMB 20 million in materials and RMB 10 million in cash through the China Rural Development Association; 361° Group donated 10 million yuan of materials through the China Youth Development Association; Xtep Group donated materials worth 20 million yuan through the China Youth Development Association; Peak Sports donated 5 million yuan in materials.
In response to the disaster in Gansu, ANTA Group announced that it would donate 40 million yuan of cold materials to support the earthquake area. 361 Degrees Group donated 10 million yuan of cold materials to the disaster area through the Red Cross Society of Gansu Province; Li Ning Group donated 20 million yuan worth of cold and warm materials to the ** disaster area in Gansu; Xtep Group donated 20 million yuan of cold materials; Peak Sports donated 10 million yuan of cold-proof materials to the disaster-stricken areas in Gansu.
Can the charity label that became popular overnight be copied
With the contrast between poor operation and large donations, it has been on the hot search on Weibo, and the sales have increased a lot.
According to the Philanthropy Times, Deng Guosheng, director of the Social Innovation and Rural Revitalization Research Center of Tsinghua University's School of Public Policy and Management, said that although a large number of material donations by enterprises may come from some inventory goods, it is understandable and a rational judgment to give love in disasters, but the donation of loss-making enterprises is debatable. The tax law does not encourage donations from loss-making enterprises, and corporate donations should be done within the scope of their own permissions, and corporate donations should be based on the premise of high-quality development of enterprises, and profitable donations should form a healthy development.
According to the "Enterprise Income Tax Law of the People's Republic of China" and the "Regulations for the Implementation of the Enterprise Income Tax Law of the People's Republic of China", the part of the public welfare donation expenditure incurred by the enterprise shall not exceed 12% of the total annual profit shall be allowed to be deducted. The part exceeding 12% of the total annual profit is allowed to be carried forward and deducted in the calculation of taxable income within the next three years.
This is seen as a regulatory system to encourage corporate charitable donations. The law clarifies that only enterprises that generate annual profits can enjoy tax incentives in accordance with the law, but donations from loss-making enterprises cannot enjoy this preferential treatment.
In Deng Guosheng's view, at present, it is not of universal significance to become popular because of donations and drive sales, and it is not easy for other companies to replicate. If a company is not doing well and hopes to improve its business performance by triggering consumer purchases through donations, this is a big risk for the company, in case the people do not buy, the company will be embarrassed, and there is great uncertainty about the future, which is just an atypical case. It is understandable that corporate donations are "out of the circle", triggering a wave of consumer shopping, and it is understandable that the consumption concept of goodwill and kindness supports the development of enterprises. But there should also be an education on consumer behavior, for corporate donations, consumers should not take corporate profits and losses as the premise of purchase, but should be relatively fair, and profitable enterprises should also get consumers to buy first, which is a mature consumer concept.
Li Qian, a well-known brand expert, believes that when it comes to Hongxing Erke, everyone's first reaction is charity, which is not necessarily good news for a company engaged in fashion shoes and clothing. Although he has created and attracted everyone's attention, this attraction is temporary, and this attraction is long-term by product and operation, after all, for a FMCG product, repeat purchases and real profits are the signs of successful brand building.
In addition, when a high-profile label such as charity is put into the brand, it will also bring a big hidden danger, that is, the risk of overturning, or the risk of moral kidnapping.
If an enterprise flaunts itself with public welfare and charity as a brand, it is easy to kidnap its brand to a moral high ground, be stared at by many spotlights, and be careless, once the internal control is flawed, it will lead to everyone's accusations and comments on it will be more ferocious than that of a normal enterprise, which greatly increases the risk of public opinion.