Decoding: The mystery of the sports brand Li Ning from light to fast

Li Ning's troubles

Li Ning, the leader of the local sports brand, has maintained a steady and rapid growth of more than 30%, and 2008 Beijing Olympic Games Li Ning Fei Tian debut even more than 50% of the brand's performance rose. However, Li Ning’s troubles did not disappear.

In the ultra-large and primary markets, Li Ning was completely suppressed by international brands. Since 2003, Nike and Adidas have surpassed Li Ning's amazing growth in the Chinese market after years of pave the way. In addition to maintaining its strong position in megacities, the two companies also actively develop distribution networks in the second and third tier markets. After officially becoming a partner of the Beijing 2008 Olympics, Adidas announced that it will increase its franchise to 4,000 stores in 400 cities. At the same time, Nike already has nearly 1,200 stores in China and is expanding at a rate of nearly 500 new stores each year. This is actually a clarion call for Nike and Adidas to enter the Chinese secondary market. Although Li Ning responded to this quickly and announced that it had opened more than 1,500 stores in the same time period, it is indisputable fact that Li Ning's original channel advantages over the two major international brands began to be continuously reduced.

At home, the competition conditions of China's sporting goods industry have gradually undergone qualitative changes. The Guangdong brand has declined, and the Jinjiang brand is rising. Anta, as the leading company in Fujian Jinjiang brand, has also achieved explosive growth in the last five years. In 2008, its overall turnover had reached 4.627 billion yuan. 361 degrees, Hongxing Erke, Xtep and Other Jinjiang sports brands have risen with Anta, occupying half of China's sports goods market. In addition, Kappa, which has been praised by the industry as a business miracle, has achieved stunning successes with gorgeous transformations. It has almost doubled each year to become an international brand that is fully localized, and China’s development has become China’s sporting goods. The third place in the industry for local companies.

In front of the "tiger" - Adidas and Nike, behind the "wolf" - Anta and other local brands, of course, these are only threats from the external market. If it is powerful enough, external pressure may turn into a motive force. What troubles Li Ning most is also the same issue that is placed on Chinese entrepreneurs: “The biggest enemy is often not the competitors, but their own.” When Chinese and international companies compete in the Chinese market, they rely too much on the original cost advantage. The problem now is that large companies’ manufacturing bases are transferred to China. Nike, Adidas, Li Ning, and even Anta share almost the same factory. There may not be an advantage. The most terrible is that Li Ning's average inventory needs 161 days on weekdays, while Nike and Reebok's average inventory days only need 84 days and 64 days. It can be said that, for the same amount of money, Li Ning Company needs 161 days to complete its profit, and its competitors have earned two profits during this time.

This reality makes Li Ning really unable to breathe. If you do not die, you die. In the context of global globalization, the only result that does not change strategic thinking and does not move forward is that the market is ruthlessly eliminated.

Li Ning can only change.


Virtual Operation New Positioning

In today's competition, Chinese companies must think about whether to earn a dollar or a dollar. In the internationalized industrial chain formed from the logistics production and sales channels, most of China's manufacturing industry is only production, spinning around “hard one dollar” and earning a hard one dollar. Internationalized companies implement international integration through the industrial chain, earning “soft ternary”—soft three bucks. Chinese enterprises must make a profit to hard dollar, and once they are eaten by industrial capital and financial capital, they will face elimination or be incorporated into international industrial integration.

In Beaverton, Oregon, a pair of shoes cannot be seen in the four-story Nike headquarters. Employees are only busy doing two things: one thing is to establish a global marketing network, and the other is to manage the companies that are spread around the world. Instead of a production facility, Nike has created an empire spanning the globe. This is the essence of Nike's business model - virtual management, integration of valuable industrial chain.