On the evening of July 11th, Deerma  announced that its wholly-owned subsidiary, Shanghai Water Shield Health Technology Co., Ltd. (hereinafter referred to as “Shanghai Water Shield”), and related parties Foshan Feiyu Electric Technology Co., Ltd., Zhuhai Fishpool Venture Capital Partnership Enterprise (Limited Partnership), and Cai Tieqiang, have recently signed a supplementary agreement on the Philips trademark license for health and sports products with Koninklijke Philips N.V. (hereinafter referred to as “Philips”). According to the terms of the agreement, Philips has agreed to grant Shanghai Water Shield the right to use the PHILIPS trademark to conduct business in fitness equipment-related products in Greater China.

Specifically, the product categories authorized this time are six types of products used for consumer exercise or muscle training, including treadmills and steppers, exercise bikes, rowing machines, smart exercise dumbbells with motion tracking functions, smart fitness mirrors with body shape detection and exercise programs, and software applications (applications) that control any of the above five types of products through smartphones or any other smart devices.

The agreement shows that the term of this authorization is four years, effective from January 1, 2024, to December 31, 2027. During this period, the licensing fee will be calculated at 3% of the net turnover of fitness equipment sales, but it shall not be lower than the following minimum licensing fees. From 2024 to 2027, the minimum licensing fee amounts are 200,000 euros, 500,000 euros, 800,000 euros, and 1.2 million euros, respectively.

In addition, if the sales and market performance of fitness equipment meet or exceed the following two standards, the category will be added to the formal authorization category of the Philips trademark license agreement from January 1, 2028 (that is, the license term will be consistent with other authorized categories). The two standards are: (1) from January 1, 2024, to June 30, 2027, the monthly average net turnover of fitness equipment reaches 1.5 million euros; (2) within at least 30 days before June 30, 2027 (inclusive), the average rating of the relevant application in the Google Play Store or Apple App Store is ≥4.0.

If fitness equipment is added to the formal authorization category of the Philips trademark license agreement, from January 1, 2028, the minimum licensing fee guaranteed by the Philips trademark license will increase by 1.2 million euros per year.

Deerm stated that the company’s acquisition of the authorization for the new fitness equipment category of the Philips trademark is conducive to expanding the product category layout, strengthening the company’s industry position, and has a positive impact on the company’s comprehensive competitiveness. It is also beneficial to the company’s medium and long-term product development strategic layout.

Data shows that Deerm is an innovative electrical appliance brand established in 2011, focusing on the research, production, and sales of products in categories such as environmental humidification, vacuum cleaning, household small appliances, and kitchen small appliances. The company has a young and experienced management team, strong online operation capabilities, and a comprehensive overseas layout, initiating a global development strategy. Deerm’s humidifiers and rod vacuum cleaners have become industry benchmarks.

At present, Deerm has formed a dual-brand matrix of “Deerm” and “Philips”. From 2020 to 2022, the sales revenue of the two main brands, Deerm and Philips, continued to grow, and the combined proportion of the two in the main business income was 74.07%, 68.17%, and 77.46%, respectively. The Deerm brand mainly sells household environment small appliances, while the Philips brand mainly sells water health and personal care health appliances.

In May this year, Deerm successfully went public on the Growth Enterprise Board, becoming the first company in Foshan to go public this year. This IPO raised 1.367 billion yuan, which is planned to be used for the intelligent home appliance manufacturing base project, the R&D quality control center construction project, and the information construction project.

For future development, Deerm said that the company will actively layout and integrate upstream and downstream resources of the industry chain in the multi-category small home appliance industry, consolidate supply chain coordination capabilities, and superimpose strong independent production capabilities to create an “extreme supply chain”. At the same time, the company will be consumer-centered, combine a deep understanding of the market, and deeply refine each link of new product development, category research, product definition, product design, and product research and development, to continuously promote product-driven and brand innovation, and create “extreme single products”.