Thread: Li Ning - China's New Sponsor
04-26-2009, 01:21 AM #273
Already Yonex's profits last year is a fraction of Li Ning's and it cannot afford to spend on the type of high cost research Li Ning seems to take in its stride.
I believe Yonex's biggest mistake was not forging a joint venture with a strong local Chinese Sports Equip. Company some years ago. It is kind of too late now.
The latest Auto Show in Shanghai highlights the future trend of what is to be-China to set world trends in autos and every major auto maker must have a partnership in China to have a future in the car business.
04-26-2009, 03:01 AM #274
Taneepak. I agree with you. It seems for many years Yonex's racket have flown off the shelf just because their product seems creditable (says who?) and top players are using them. With the waves of very good (says who?) made in China, Malaysia and Indonesia rackets coming on line, Yonex's credibility seems to be taking a hit. People are really thinking again when holding that USD 250 racket and wondering aloud if that other sintec, Apacs, asahway, is just as good for a fraction of the price. I have seen in posting here that people are willing to buy a racket at 20% of Yonex prices and expects only 50% performance with the same paint job (read here apacs). Again here, the magic word is performance. If Yonex can prove to us that their mambo jumbo technology is really working to help our games, maybe its worth the price. How Yonex can prove that worth now will determine how far they will go against Li Ning. I have no doubt that Li Ning have done a lot of work to build a very good racket which no doubt Lin Dan will rave about. However I have my doubt if that USD250 Li Ning is going to better than the USD 250 Yonex. The truth is, we don't want USD 250!! We want a racket that can help us play the game better.
What Yonex must do is to reward is badminton players who have supported this sport by playing it. They should use all their R&D worth to build more affordable, playable made in China rackets. Move to the market segment below their AT 900/MP100/Ti 10 range and compete. People here have advice us against buying a sub USD 100 Yonex, that they are crap. Lets see how the evil empire will response. If they don't.....in about 5 years, they'll be 1/2 of what they are today. asnd Li Ning will be the evil empire. If they did...we'll be in a for a ride.
04-26-2009, 05:12 AM #275
the strong badminton country with many fans that currently sponsored by YY are Malaysia and Indonesia only.
there is a rumors that Victor try to approach Malaysia, while Li Ning actually has approached Indonesia last year but in the end Indonesia decided to go with YY (only until 31 Dec 2009).
if either Malaysia or Indonesia also left YY, then ..........
04-26-2009, 05:59 AM #276
First of all I agree with most of what you say. I think however we should not write off yonex just yet.
I know little of the profits of the two companies, however like Epak says it is likely LN will make more profit margin than YY, since they are based in China with Chinese employtees, so overheads must be lower than YY.
Does anybody know comparative turnover figures for LN vs YY?
Li Ning is a big brand in China and there are branches in every city and every department store. Their main line tends to be clothing and footwear. I like to see them as a Chinese Nike. As Kwun has said LN's timing is very good, after the OG & SARS people know Li Ning & like sport, especially badminton. Courts in CHina are fully booked every night and busy during the day...They have bought a company in Kason that sell good quality equipment and have most likely some expertise in badminto & have had a long association with the national team.
IMHO Yonex flaw was not neccessarily not investing in a chinese (since they have the muscle and expertise to simply enter the market in china. But there apparent confidence in badminton to simply keep rolling out similar rackets with pretty poor marketing and continually selling at a high price. How many local events/tournaments are sponsored by Yonex in your area? In china there are lots of brands who sponsor badminton at a local tournament level. This is where the money is earned. I am sure many of the players, no matter how keen & in love with badminto they are do not care at all for elite level badminton so all the YY sponsorship at this level is somewhat wasted...Maybe YY feel it is beneath them to sponsor the lower level play,m which is now where the money is to be made?
In any case YY are also in the miche of their own creation. WHilst they have tried (relatively unsuccessfully) to break into Golf & Tennis their staple is Badminton thus if this fails the company is history....as I stated before as I see it LN is mainly a Clothing and footwear brand, and the badminton will simply be an addition, which will bring a wider sales target to their plans and hopefully in the future may bring more people into badminton - When was the last time you saw some non-badminton player wearing a Yonex t-shirt down the street?
04-26-2009, 06:21 AM #277
so li ling brand has caught everyone's attention after they become the main sponsor of china badminton team
04-26-2009, 06:26 AM #278
04-26-2009, 06:33 AM #279
04-26-2009, 06:59 AM #280
the discussion in this thread has been really thoughtful and wisely participated. good stuff.
for whatever Li Ning has done in the market so far, they have done a good job. lots of leaks about a potential Chinese sponsorship deal generated a lot of buzz in the internet, esp here in BC. that the best marketing that cannot be bought with money.
personally, i am interested in buying a Li Ning racket and see what the hype is all about. that's how well the marketing has worked.
Yonex nor Li Ning will go out without a fight. that's for sure.
04-26-2009, 07:36 AM #281
I dont think a "made in China" racket would be regarded in the same way as a "made in Japan" racket...if so, why all the ongoing threads about "JP", "SP" etc rackets? I guess there is always the perception that JP rackets are better in terms of QC, finish and end-product...
I think if yonex were to concentrate on the low-end market, then, it is unable to distinguish itself from the many "mass consumer brands out there"....this is by no means to say that the other "low end" brands are not good...though I wish that yonex would drop its price...I agree with Eepak that it is unlikely to happen....just hope that it will not go up more and more in the face of declinig prices all round in this time of econmic crisis... haha
04-26-2009, 07:43 AM #282
Ultimately I think the inability of yonex to sponsor the Chinese team may to a certain extent impact negatively on yonex's marketing and image strategy... only then, despite the higher costs of production (it being based in japan), it may wisen up and go easy on the cost of its product range.....
04-26-2009, 10:07 AM #283
Yonex in Japan
I happen to play a little tennis too (only if I found time after playing badminton). Yonex tennis rackets in my opinion is one of the best technologically. The spin generated from the ISO frames are really there. Other rackets like Wilson and babolat are mostly sold through brand-player recognition. I haven't heard any tennis player being able to name 3 technolgical features their USD 350 racket has except mumble words like "Nadal uses them!"
Looking at Yonex, I do not blame their complacency. Japan has a huge population with high GDP. If you go to Japan, you would realize that most tennis players plays with Yonex. OK, Golf is a little different. There are many other Japanese golf brands. So from a profit point of view, I am sure they are not doing too badly. But their main worries will be the erosion of market bases elsewhere. Their effort better be on high yield places like Europe and northern Asia. I am sure the Koreans wouldn't caugh dead with a Yonex, and they wouldn't with a Li Ning too if there was a Korean brand. The sad thing is, there isn't one (can any Koreans explain this?). So given a choice between a USD 200 Li Ning and a USD 250 Yonex, the choice would be obvious. Now and perhaps in 3 more years.
The issue then becomes that Li Ning and others will continue to mop up the market that is one step below that and slowely build up. This kind of "eating- upwards" business examples are so numorus that it should have entered the Yonex's management's mind. So in my opinion, if the end game is very clear (death by thousand cuts), maybe its still not too late to counter attack. Work on a segment that Li Ning would really want to be in (I guess USD120-USD180) and fight them there. Let Li Ning win at the even lower segment and let them be known as a cheap brand. Yonex at current level still have enough clout to win there it would erode the USD 250 market too much if Yonex can make a good distinction. The problem here is that Chinese and Taiwanese production bases are deemed too cheap (sorry there!). Pehaps its time to build a real Yonex factory in Europe (Eastern part of west Germany) or a "IP protective" place like Singapore. Imagine a real SP racket. Made in Asia (outside of Japan) but deemed well made enough to sell around the world.
04-26-2009, 10:12 AM #284
Financial highlights of the two companies:
If I am reading these correctly, in 2008, Li-Ning had about 3 times the sales and 7 times the profit of Yonex. Li-Ning's operating margin was also a lot higher than Yonex's.
In 2008, Li-Ning's revenue was 99.2% from domestic market. No wonder we don't see much Li-Ning outside of China!
04-26-2009, 10:18 AM #285
hmm..food for though
04-26-2009, 12:05 PM #286
Li Ning's sales in 2008 were US$1 billion, gross profit US$472 million. Yonex's sales were US$376 million, gross profit US$1.65 million. As you can see Yonex just doesn't have the money for more bells and whistles whereas Li NIng's figures are a startling jump of about 50% over the previous year.
Li Ning has also acquired a controlling interest in Double Happiness, a famous Chinese company that is synonymous with China's dominance in world table tennis. Li Ning has also signed partnership agreements with China's national teams in table tennis, gymnastics, shooting, diving, and now badminton. These 5 sports are China's king of sports. According to a joint statement from Li Ning and the Chinese national badminton association, released to the press recently, all the equipment tested by and to be used by the Chinese team in the coming Surdiman Cup met and surpassed their professional needs.
04-26-2009, 09:50 PM #287
04-26-2009, 10:50 PM #288
04-26-2009, 10:56 PM #289
I am really happy for the chinese badminton team, now they have their own brand of equipment for rackets, shoes and clothing . Lin dan and the rest will be using them for the up and coming tournaments!
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