Li Ning brand struggles in the U.S. market

Chinese athlete Li Ning won world attention at the 2008 Beijing Olympics. He took the torch up high over the national stadium at the opening ceremony, demonstrating China’s ambition and showing his ambition to create a world-class sportswear brand. .

Three years later, Li Ning fell into a trough, and his Li Ning Co. - through the signing of several high-profile spokespersons such as basketball star Shaquille O'Neal, marched into the United States - profit has been Seeing decline, its former station in the US market in Portland, Oregon experienced a large loss of designers and employees.

The company’s stock price also made a substantial response, falling 63% this year, far exceeding the overall decline of 29% in the Hong Kong market.

Li Ning's problems highlight the difficulties faced by Chinese companies in creating new global brands that match their manufacturing capabilities. Some companies have made progress, such as Lenovo Group Ltd. However, it has benefited from the IBM (International Business Machine Corp.) PC computer business in 2005.

Most companies have not made much progress. They have to face sophisticated global competitors, but they also have to face the reality that brands cannot be recognized. According to a survey by market research firm Millward Brown and media company WPP PLC, outside China, 83% of consumers could not name a Chinese brand or company.

In China, the Li Ning brand ranks third among the sports apparel companies after Nike and Adidas. Now, this 22-year-old sports apparel company headquartered in Beijing is adjusting its practice in the US market.

Lei Xiao-shan, founder of Shanghai-based consultancy China Market Research Group, said the problem is that when they open up overseas markets, their eyesight is much lower than at home.

Company founder Li Ning and other senior executives refused to be interviewed. They said in a statement, “We will still go all out to develop the Li Ning brand.”

However, a new US partner of Li Ning is planning to reopen the US market under the name of Digital Li-Ning Co., and will focus on online sales before the planned physical stores are opened.

George Lu, president of Li Ning Digital, said: We have plans to develop plans to analyze online data to understand the U.S. market before expanding further. We hope this brand will establish a relationship with the Americans.

Li Ning disclosed this new attempt on Monday. The redesigned company's US website stated that the company is "the biggest brand you have ever heard of."

Li Ning won six medals in the gymnastics program at the Los Angeles Olympics in 1984. Among them, three were gold medals and one of the most famous athletes in China. However, his company is hard to expand awareness in the United States.

According to an analysis by Barclays analysts, too much inventory led to many Li Ning retail outlets selling products at discounted prices, causing Li Ning's ambitions to compete with Nike.

Li Ning’s profit in the first half of 2011 fell by nearly 50% from a year ago, which is the latest measure of the performance of the company. In the first half of this year, revenue fell by nearly 5% to 4.3 billion yuan, or about 678 million US dollars. The company did not disclose US sales data.

Prior to this, Li Ning’s efforts to open up the U.S. market included asking O'Neal (the last team he played in Boston Celtics before his retirement) and Evan Turner of the Philadelphia 76ers. ) Do endorsements. It opened a global design center in Portland four years ago, not far from Nike’s headquarters in Beaverton, and designed shoes for the American market. Two years later the company opened a display area in Portland.

An employee of Li Ning Company stated that the company is striving to find its own market position, reached distribution agreements with a number of badminton clubs in the United States, and even added a ping pong ball room to the display area to attract trendy customers.

Last year, Li Ning Company and Foot Locker Inc. An agreement was reached to allow each other's subsidiary Champs Sports to bring Li Ning brand products to the market.

But the operation of Portland’s former station has encountered difficulties. About half of the 30 designers and other employees who designed tennis shoes and clothing for the US market have left this year. Li Ning’s management declined to comment on this issue.

The new Li Ning Digital Company is a joint venture with the Acquity Group, a Chicago brand consultancy and private equity agency. At the beginning of this year, the company signed a joint venture agreement with Li Ning Company. Li Ning Company accounted for 20% of the shares in the new company.

Li Ning terminated the distribution agreement with Champs and Foot Locker and regained the management rights of its own website.

It is not yet clear how George Lu's move will be combined with Li Ning's attempt in Portland. The aforementioned Li Ning employees said that the two departments representing Li Ning have their own booths at the trade show. Li Ning executives said that the expansion into the US market is experimental and it is to explore the needs of American consumers.

George Lu said that he has hired 20 of his own employees to design a new image for Li Ning. The purpose is to let Americans understand the understanding of Eastern culture on nature, balance and brain connections. He also designed his own product line and did not sell in Portland's display area.

Today, on Li Ning's website, a pair of men's running shoes sell for $80 and are made of mesh materials that can "adapt to a natural gait." Lotus-patterned yoga pants are priced at $55 and are suitable for "accurately placed positions. Of course, it is also appropriate to wear coffee after exercise."

According to George Lu’s plan, American consumers can learn about the Li Ning brand at O’Neill’s community events and in sporting goods stores.

According to Lei Xiaoshan of China Market Research Group, setting up a joint venture may be the right move for Li Ning. McDonald's (McDonald's Corp.) and Starbucks Corp. and other multinational companies are looking for different companies to cooperate and expand their business. Avoid the risk. Earlier this year, Starbucks bought the joint venture stake held by its Chinese joint venture partner, Maxim's Caterers Ltd., to acquire Starbucks' full ownership of retail outlets in China's six largest regions.