Summary of Key Issues
The legal battle between Antarctic E-commerce and its former licensing partner, Shanghai Xinhezhao, is intensifying, with the total claims amounting to over 600 million yuan. Either party that loses will have to pay a substantial sum. The dispute originated from the infringement of the Cartier Crocodile logo by Lacoste, leading to mutual claims after the cooperation collapsed. Meanwhile, Antarctic E-commerce faces numerous internal challenges: its low-cost model has resulted in brand control issues (it has been jokingly referred to as "anything can be labeled as Antarctic product"), a sharp decline in licensing revenue, poor performance from its direct sales efforts, and difficulties in rebranding, leading to consecutive losses. The company is now trying to turn things around.
I. The Billion-Yuan Legal Tussle: From Cooperation to Hostility
Antarctic E-commerce and Shanghai Xinhezhao were once licensed partners for the "Cartier" brand (Antarctic E-commerce provided the trademark, and Xinhezhao paid for its use). However, Xinhezhao altered the Cartier Crocodile logo, which led to a lawsuit by Lacoste, and Antarctic E-commerce was forced to pay 14.8 million yuan in compensation. Since then, the relationship has completely soured:
- Xinhezhao stopped paying licensing fees in June 2024 and filed a lawsuit against Antarctic E-commerce in January 2025, increasing its claim from 95 million yuan to 565 million yuan, then down to 313 million yuan (demanding a refund and compensation for losses).
- Antarctic E-commerce counteracted in June 2025, raising its claim to 296 million yuan (demanding that Xinhezhao pay the licensing fees and compensate for breach of contract).
Both cases are still in the first instance phase, with eight hearings already held, indicating a prolonged legal process.
II. The Pitfalls of the Low-Cost Model: Easy Money, but Uncontrollable Risks
Antarctic E-commerce has always followed a low-cost strategy, holding only the brand rights while outsourcing production to factories and sales to distributors, earning revenue from licensing fees and service charges. The advantage is lower costs and higher gross margins (no need to build factories or open stores). However, the downside is a lack of control over the supply chain:
- Distributors have altered logos and sold inferior products, damaging the brand's reputation (leading to jokes like "anything can be labeled as Antarctic product").
- The company was previously sued for trademark infringement by Burberry, and its chairman, Zhang Yuxiang, faced travel restrictions.
As a result, licensing revenue plummeted: from 1.2 billion yuan annually at its peak to less than 200 million yuan in 2025, with the Cartier brand value decreasing by 110 million yuan (equivalent to admitting a loss on the investment).
III. Efforts at Transformation: Tightening Licensing and Entering Direct Sales
Antarctic E-commerce has taken two steps to turn things around:
1. Tightening Licensing: It has changed its approach from granting licenses to anyone to only selecting high-quality partners, removing poorly performing suppliers and distributors.
2. Entering Direct Sales: The company has taken over the production of men's and women's clothing and underwear, managing everything from raw materials to sales, and opened physical stores under the "Super Antarctic" brand.
However, these efforts have had mixed results:
- Direct sales performance is unstable: sales increased by 192% in 2024 but then dropped by 62% in 2025.
- A 200 million yuan advertising campaign featuring Xie Tingfeng was somewhat effective, but the impact was short-lived. The company's online official store still sells low-priced products (e.g., 10 pairs of socks for 39.9 yuan), which contradicts its premium image.
- With only two physical stores open, the direct sales model has been piloted in partnership with others, raising doubts about its sustainability.
IV. Rebranding Challenges: A Divided Image That Fails to Convey a Premium Feel
Antarctic E-commerce aims to move from being known for low-cost licensed products to a premium brand, but the efforts are inconsistent:
- Online, authorized stores on e-commerce platforms still sell low-priced goods, and the style and pricing of official store products do not match the premium image in advertisements.
- Offline, the "Super Antarctic" stores claim to offer high-quality products, but some items are from third-party suppliers, indicating a lack of full control over the supply chain.
- Consumers perceive the brand as cheap, despite the company's efforts to change this perception.
V. Financial Pressure: Continuous Losses and the Need for Stability
Antarctic E-commerce incurred a loss of 237 million yuan in 2024 due to advertising expenses. By reducing marketing costs in 2025, it expects to turn a profit on a non-recurring basis. However, core issues remain unresolved:
- Licensing revenue remains low, and direct sales have not improved.
- The legal battles could result in significant financial losses if lost.
- Rebranding efforts have not been successful, and consumers are not responding positively to the new brand image.
In summary, Antarctic E-commerce is facing both external legal challenges and internal difficulties with its business model. The consequences of its low-cost strategy (brand control issues) are still evident, and its direct sales efforts have not proven effective. To overcome these problems, the company needs to unify its brand image. It must either completely abandon licensing and focus on direct sales or set strict licensing standards. Otherwise, the "Antarctic" brand may continue to suffer.
Conclusion
Antarctic E-commerce is in a tough situation, dealing with both legal battles and internal struggles with its business model. The long-term effects of its low-cost strategy are becoming apparent, and its attempts at transformation have not been successful. To break free from these challenges, the company must first establish a consistent brand image. It may need to either abandon licensing entirely and switch to direct sales or set extremely strict licensing requirements. Otherwise, the "Antarctic" brand could continue to be overused and lose its value.