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Li Ning, Chinese Sports Brand Takes On Nike

Discussion in 'Badminton Rackets / Equipment' started by Loh, Jan 13, 2010.

  1. Loh

    Loh Regular Member

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    Forbes.com
    01.13.10, 05:45 AM EST

    By Vivian Wai-yin Kwok

    Li Ning opened its first U.S. store in Portland, home to the sportswear giant's headquarters.

    HONG KONG -- In its quest for international recognition, Chinese sports brand Li Ning wants to take on world-class competitors. That's why it opened its first U.S. outlet in Portland, Ore.--the same city where Nike's headquarters are situated.

    There was neither ribbon cutting nor dragon dancing when Li Ning ( LNNGF - news - people ), China's largest retailer and supplier of sporting goods, opened its store on NW Hoyt Street near Portland's central post office on Jan 4. Yet, Li Ning's quiet entry into the U.S. market stirred up interest in Oregon's biggest city, a hub for Nike's ( NKE - news - people ) designers, distributors and buyers.


    As part of its latest marketing strategy to attract U.S. consumers, Li Ning has chosen a few sporting goods to feature in its Portland store. These products include badminton, basketball and table tennis gear as well as a line of kung fu and tai chi themed sportswear.

    A Li Ning spokesperson in Hong Kong told Forbes that Li Ning will begin to enter the international market between 2009 and 2013.

    "Its first store in Portland is a trial for the company to test and to get familiar with the U.S. market. With actual data to form a more concrete plan, Li Ning is expected to expand and penetrate the international market from 2014 to 2018", said Philip Lo of iPROgilvy on behalf of Li Ning.

    Lo added that the mainland Chinese market is still Li Ning's major stream of income now and in the near term. Li Ning did not release official figures about its market share and ranking in China. According to a research report by BofA Merrill Lynch, Nike was the most popular sport brand in China with 19% market share in 2008, while Adidas ranked second with 15% share and Li Ning third with 11%. The brokerage estimated Li Ning to have overtaken Adidas in 2009 as the second-largest player in China's $10 billion sportswear industry.

    I think it's going to be interesting to see how Li Ning markets its products in the US. Since Zhang has said the products are going to remain pretty niche and incorporate what he called "oriental des....

    Li Ning's previous earnings announcement showed that its entire chain of about 7,000 stores across China recorded a total revenue of 4.0 billion yuan ($595.9 million) in the first six months in 2009. Citigroup analysts estimated Li Ning would post 8.5 billion yuan ($1.2 billion) in annual sales for 2009, up from 6.7 billion yuan ($970 million) in the previous year.

    Some other industry analysts even predict Li Ning might have unseated Nike ( NKE - news - people ) as China's bestselling sport brand last year. Nike is estimated to book around $1.1 billion in sales in 2009.

    The opening of its Portland store near Nike's headquarters is therefore viewed as Li Ning's attempt to challenge its U.S. big brother.

    In an interview with Reuters in December, Li Ning's chief executive, Zhang Zhiyong, said the U.S. expansion was Li Ning's move "to test the water" before moving forward with its goal of becoming a major international brand within a decade. Zhang revealed that Li Ning set up a product research and development center in Portland about a year ago to prepare for its overseas path.

    Set up and controlled by China's "Prince of Gymnastics," Li Ning, who won three gold, two silver and one bronze medal in the Los Angeles Olympic Games in 1984, the company manufactures and markets sports products including footwear, apparel, accessories and equipment.

    Besides operating about 7,000 Li Ning stores, Li Ning Co. also distributes products under its Z-DO brand to large Wal-Mart-style shops called hypermarkets. In a series of mergers and joint venture agreements undertaken to dominate China's sports market, Li Ning acquired the famed Chinese table tennis brand Double Happiness in 2008 and entered into an exclusive 20-year license agreement to distribute and sell licensed products from the Italian sports fashion brand Lotto in China.

    After strengthening its foothold at home, Li Ning opened its first overseas store in Singapore last year. The second overseas outlet, featuring a badminton theme, began operations in Hong Kong in December.

    Market capitalization of the Hong Kong-listed Li Ning reached nearly $3.5 billion after its share price has surged more than double in the past year.
     
  2. Yoppy

    Yoppy Regular Member

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    Weldone Li Ning. This proofs China brands are moving towards quality very fast and can now produce best products quality too.
    I heard that, among many other products, there are also Chinese fashion labels that are in very good quality too
     
  3. krisyay

    krisyay Regular Member

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    tax-free li-ning rackets....veeeeery tempting
     
  4. adonis

    adonis Regular Member

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    I really doubt li ning will do well in the US. I mean, can you imagine the American's choosing Li Ning over Nike and other American sports brands? I definitely wouldn't, especially not with the prices set.
     
  5. b.leung

    b.leung Regular Member

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    they should've started in toronto or vancouver, these two major cities are international hubs with a very strong chinese community. Many new immigrants as well from china. I'd definitely be interested in li-ning attire and products if they open a store in toronto.
    heck i might even get myself a n90 just to try
     
  6. adonis

    adonis Regular Member

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    well rackets maybe. but sports attire? would wearing something bright red that says " LI NING " appeal to you?
     
  7. Badmintan

    Badmintan Regular Member

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    I think Li-Ning should anglicized the name Li-Ning like what the other computer Chinese company 'Lenovo' did.

    Perhaps Lee Neen or some other creative name.

    Could be mistaken for Mr. Li-Ning or Miss Li-Ning by joe bloggs on the streets.

    Just a thought for the US market.
     
  8. GEEGEEGEE

    GEEGEEGEE Regular Member

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    I visited the Li-Ning store in Shanghai on Nan-Jing Rd. Massive 3-4 level store. Very much reminded me of 'China's Nike' mixed in with a hint of Adidas lol

    Adidas: Impossible Is Nothing
    Li-Ning: Anything Is Possible
     
  9. jymbalaya

    jymbalaya Regular Member

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    That's kevin garnett, not Li Ning!!!!!
     
  10. b.leung

    b.leung Regular Member

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    for the apparel, i've seen some of the students on campus wearing li-ning stuff
    shoes, sports/casual bags
     
  11. GEEGEEGEE

    GEEGEEGEE Regular Member

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  12. tckang

    tckang Regular Member

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    CORRECTION: Li Ning IS international brand

    Dear all BCers,

    As much as we chose not to believe it, Li Ning brand name has been around for more than 20 years, and it IS an international brand.
    Since our BC-ers are all over the world, i think it is only fair for those who know Li Ning out of Asia to point out to all BC-ers (especially us who are in South East Asia) the Li Ning name in Europe, US, and Latin America.
    They have sponsored A LOT of NBAs, International volleyball, tennis, table tennis, etc. for international atheletes all over the world in those games. (Just Like Nike, Adidas, etc.)

    The only thing we know so little about them and have the MISCONCEPTION that they are just only going global is because:

    1) Li Ning has almost no presence in South East Asia before 2008/2009 (now in Singapore)
    2) Li Ning advertisement , etc are not available in South East Asia and Pacific region, thus making us to know nothing about them.
    3) For badminton, i AGREE that Li Ning is a new comer, trying to break the dominance of Yonex and perhaps Victor.

    Like i said before many times, i am not a Chinese citizen, nor that i work for Li Ning (i Don't). I am just merely pointing out facts that i think we should know about Li Ning on their international presence WAY before they come to South East Asia all these years.

    Many articles, documents about what i said above is all over the net, in English and Chinese. ;)
    Guess Li Ning may want to hire me as a spoke person? :D :D :D
     
    #12 tckang, Jan 14, 2010
    Last edited: Jan 14, 2010
  13. Yoppy

    Yoppy Regular Member

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    As far as I know Li Ning also has no advertisement activity here in Australia. I heard it only from media but not from Li Ning direct marketing effort.
     
  14. tckang

    tckang Regular Member

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    Hence i mentioned in my post up there, "Pacific region" which directly refers to Aussie + NZ. :p

     
  15. Yoppy

    Yoppy Regular Member

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    Yes i was just reconfirming you :)
     
  16. milford30

    milford30 Regular Member

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    Really? i've been watching "1990+Asia+Game+Badminton+MSF+Zhao+Jianhua+vs+Yang+Yang"
    and Li Ning has sponsoring posters in the background...
    i think they're just starting to get notice now since they're sponsoring the chinese team (with equipment)...
     
  17. tckang

    tckang Regular Member

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    Those days they only have badminton shoes.
    But when i say they come in as badminton new comer, i.e they now has the complete range, rackets, shoes, clothing, strings, grips, etc all for badminton use. ;)
     
  18. Loh

    Loh Regular Member

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    The general feeling is that Li Ning is a bit pricey though many badminton players here are more predisposed to Li Ning than Yonex nowadays. The publicity that Li Ning attracts has perhaps overshadowed that of Yonex, now that LN has an outfit at Spore's most glamorous Orchard Rd shopping address, ION Orchard. And LN's recent sponsorship of many youth tournaments and the Spore national badminton team further fortifies its image.
     
  19. tckang

    tckang Regular Member

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    Well, like i said before, before they have a complete badminton range, they are already very "BIG" and well positioned in other continents outside China, focusing on sports like basketball (NBA), tennis, table tennis, and volleyball etc in US, European countries, Latin America, etc.
    So, with this vast experience and capital, wherever they want to penetrate a new market, they do it aggressively, such as what you guys are experiencing now in Singapore.
    Li Ning already announced next in South East Asia will be Malaysia and Thailand and Indonesia. Their plans? To establish similar outlets like the one ins Singapore in these other countries and they are looking at close to 200 outlets (with SEA and Australia + NZ in mind) by end 2011.
    I believe they can do it.
     
  20. ikcud

    ikcud Regular Member

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    Anything is possible after all.
     

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