The Canadian goose has capsized again. On December 12th, the topic # Suspected Defective Canadian Goose 9500 yuan Down Coat # appeared on Weibo's hot search, with nearly 70 million views of the topic so far. According to a report from Pengpai News, on November 25th, Ms. Xu from Zhejiang purchased a white down jacket priced at 9500 yuan from a Canadian goose specialty store in a shopping mall. Due to minor flaws in the products at the time, the store staff transferred the goods from other stores and delivered them to Ms. Xu's home via express delivery. After receiving the goods, Ms. Xu found a whole piece of cut and stitched placket fabric in her pocket, and based on this, she suspected that she had purchased a defective item.
On December 8th, Canada Goose apologized for exchanging goods and compensating Ms. Xu with a small gift, and both parties have reached an agreement. Regarding the above-mentioned events and issues related to brand after-sales standards, a reporter from Beijing Business Daily sent an interview outline to the media contact email of Canada Goose, but as of the time of publication, no response has been received.
In fact, this is not the first time Canadian geese have sparked heated discussions due to quality issues. At the end of 2021, it was exposed that up to 70% of the down jacket materials used by Da Geese were ordinary duck down, rather than the claimed high-quality Canadian goose down. In the end, Da Geese was fined 450000 yuan for false advertising. At the same time, according to the Xinmin Evening News, some domestic consumers have problems with embroidered logos and pungent fabrics after spending 11400 yuan to purchase geese.
In addition, in December 2021, a staff member of a Canadian goose store stated that products sold in mainland China specialty stores were not eligible for returns. As a result, "Canadian goose stores in mainland China are not eligible for returns" became a hot search topic. On the evening of December 9th of the same year, the official Weibo account of Canada Goose announced that with the guidance and assistance of the Shanghai Consumer Protection Commission, the "Canada Goose Mainland China Return and Exchange Service Commitment" had been updated and optimized, with the wording changed to "Under relevant legal provisions, products from mainland China specialty stores can be returned and refunded.".
The high-end down jacket brand, which often costs tens of thousands of yuan, has repeatedly attracted attention due to quality issues. In response, Zhou Ting, the director of the Yaoke Research Institute, pointed out that high-end brand customers usually have high expectations, which requires high-end brands to pay more attention to high-end brand image, products, services, channels, communication and other aspects than mass brands, The product is the core of customer concern and the foundation for realizing customer value. If there are problems with the product, it will have a significant impact on customers, not only reducing customer awareness, leading to customers abandoning the brand, but also potentially generating negative word-of-mouth, which will have an immeasurable negative impact on the brand.
In October of this year, UBS analysts also downgraded the rating of Canadian geese to neutral in their latest report, with a target price of $18. The analyst stated that global luxury consumption is slowing down, and the momentum of Canadian geese among consumers is weakening. In the three months ending July 2, 2023, Canadian goose sales increased by 21% year-on-year to CAD 84.8 million, but the net loss expanded to CAD 85 million.
From the recent actions of the brand, it can be seen that Canada Goose's ambition in the Chinese market is on the rise. In February 2023, Canada Goose set a goal for the next five years, with an expected revenue of CAD 3 billion and a compound annual growth rate of approximately 20% for the fiscal year 2028. Canadian Goose Chairman and CEO Danny Reese once told the media that China will become an important component of the global roadmap. In the future, we will further expand our direct sales (DTC) network in the Chinese market, open new DTC stores, enhance our online experience, and enhance our digital capabilities. At present, DTC business accounts for about 70% of Canada Goose's global sales, and the goal is to increase its proportion to 80% by the fiscal year 2028.
However, facing the high-end domestic down jackets and more cost-effective military coats, the challenges faced by Canadian geese cannot be underestimated. New and old domestic brands have successively launched different series of high-end products, and the price of down jackets has skyrocketed. The high-end down jacket series jointly developed by Bosiden and former design directors of Burberry has a selling price of over 5000 yuan; The royal high-end down jacket series, jointly designed by Gofan and Moncler designer Burak Uyan, has also reached a price of around 6000 yuan.
Zhou Ting pointed out that currently, Canada Goose not only faces competition from similar international brands, but also from domestic Chinese brands. "Chinese domestic brands have supply chain advantages and can provide products that are more cost-effective and suitable for Chinese consumers. Although Canadian Goose has certain brand advantages, its brand has not reached the level of sufficient traffic, and high traffic costs are also development obstacles. Coupled with the escape of core consumers, the brand is no longer able to meet the upgrading needs of some VIP groups' consumption."
She further pointed out that addressing these challenges, further enhancing brand image, focusing on product innovation, and increasing content operation capabilities will be effective means.
Beijing Business Daily reporter Lin Yuwei