Li Ning 2011 SpringSportsSports series
Li Ning positioning footwear brand, we can say that it is "China's Nike" it? In fact, not entirely. If the shoe Li Ning (LiNing) follow the current development trajectory, its similarity with Nike will stop at that similar to Nike trademark.
Founded by gymnast Li Ning, the same name sportswear and apparel retailer is headquartered in Beijing. Between 2002 and 2009, its revenue increased 9 times and its earnings per share increased 10 times. However, when the shoe brand Li Ning opened the first US retail store in Nike's headquarters in Portland, Ore. In January of last year, the drawbacks of this developmental style became apparent.
Li Ning has been concerned by investors and the media since the middle of 2010, the order quantity declines in the second quarter of 2011, the customs clearance integration and the extraordinary acquisition of Li Ning's shares in China were ruled as anti-takeover and so on. Recently, Li Ning broke the news again. Morgan Chase and the United States Capital Group (TCGC) while singing empty space edge, Citigroup reduced its earnings survey, the target price correspondingly lowered from 23 Hong Kong dollars to 17.5 Hong Kong dollars. No matter how the outside world, Li Ning is still unremittingly adjust the integration, the recent news that Li Ning and the United States will AcquityGroup LLC companies to further expand the US market.
Li Ning, the shoemaker, has built the largest sports brand distribution network in China with 7,748 retail outlets, but only 474 of them are managed directly by Li Ning and 60% of the remaining stores are run by about 2,000 inexperienced retailers who do not Willing to cut prices to empty the quarter inventory, leaving little room for new high-priced products. In June last year, Li Ning, which has been unable to solve the problem of weak orders, made a slight change to the trademark and launched a new slogan "Makethechange". But all this did not make the situation better.
Have to admit, Li Ning did encounter an unprecedented bottleneck or setbacks. All along, the industry has a good commendation of Li Ning, began to have different voices should be from June 2010 to change the standard storm began. Many brands will have such a problem - the brand positioning of the actual consumer groups and deviations, the young consumer group (15-30 years old) is their most fancied core consumer group, but according to the relevant market research report, "Li Ning's actual consumption Group of older, 35-40 years old accounted for more than half. " Other information shows that "Li Ning's consumer base after the" 90 "only accounted for about 30%." Many brands for "bias" to adopt a laissez-faire approach, but it will lead to brand personality is not clear, the consequences can not be underestimated. For the "deviation", either adjust the brand positioning to meet market demand, or strengthen its own clear positioning, adjustment, affecting the actual consumer base, such as Li Ning launched the "90" - face, try to eliminate it, more importantly, to seize "90 after" this gradually growing groups. At that time, there are quite a few people in the industry who think Li Ning changed his bid to remove the suspicion of imitation.
Although Li Ning's starting point is correct, but the wrong way. The "90" audience is too small, excluding "after 70" and "after 80" consumers, and "90" is not yet the time to become the backbone of consumption. Chen Shixin believes that Li Ning can launch specifically for "90" series (or even an independent store), or for the "90" Li Ning card. At the same time the old slogan, the old LOGO has been deeply rooted in the hearts of people and internationalization, the bid for the need to re-spend time into the hearts of consumers, whether it is still unknown whether the recognition.
For investors, they are not only selling Li Ning (which has fallen 42% since then), but also selling other manufacturers and retailers with similar distribution issues such as Anta, Xtep and 361 Degrees . During this period, the only Chinese footwear stock that rose was PouSheng, up 37%. Pou Sheng is a pure retailer that sells large retailers such as Nike, adidas, Reebok and puma.
In the face of declining share prices, Li Ning has thrown a series of reform measures in the distribution system. And, Li Ning has already expected the integration will affect the order amount in the next two quarters. Li Ning's dismantlement of the distribution system reform shows that the integrated channel integrates 500-600 single stores, increases the proportion of discount stores in sales to 10%, and at the same time plans to increase the wholesale discount by 3 percentage points.
To some extent, if the favored franchise dealers while the wholesale discount and then sell a few percentage points, the shoe brand Li Ning may be able to rationalize the domestic distribution network over the next two years to maintain market share. But the international footwear giant Nike will also easily invest in China, its most profitable market. In the meantime, Credit Suisse's data on the spending on sportswear in China show how challenging Li Ning is. When family monthly income exceeds 7,000 yuan (about 1,000 U.S. dollars), Chinese consumers' preferences shift from domestic brands to foreign brands. Like other large consumer products, those in China looking to become global champions seem far from conquering home markets, let alone other countries, in the market for sneakers and sports vests.