Within 10 days after the “H&M incident” occurred in March this year, Zheshang Securities found that sales of Li Ning’s official flagship store increased by more than 200% year-on-year, and Anta Sports’ growth rate exceeded 100%.
But then a more exaggerated data hit the screen: sales at China’s Li Ning Tmall store increased by 800% in April. “We were all quite surprised.” An employee of Anta’s e-commerce business department revealed to AI Finance and Economics that after seeing the data reported by the media, his direct leader hurried over to ask what was going on. “Li Ning has done well in recent years, but the entire brand has not grown several times.”
During this period, Li Ning also did something that made it out of the circle. ——He quickly signed Xiao Zhan, a top figure in the “rice circle”, as his spokesperson. Capital markets responded with ecstasy. In just two months, Li Ning’s stock price rose by nearly 70%, and its market value approached HK$200 billion.
Some people think that Li Ning, as a domestic sports brand, has seized the opportunity to outperform Nike, but the industry insiders interviewed have a conservative attitude towards this. On the contrary, Li Ning showed extra brand confidence to the outside world: raising prices. Credit Suisse’s recent survey data shows that among domestic sports brands, Li Ning’s discounts in the clothing and footwear fields have narrowed, and prices have increased the most. Some netizens joked, “I didn’t have money to buy Li Ning before, but now I have no money to buy Li Ning.”
1 “Up”
On May 17, when I walked into the Li Ning store in Beijing’s Guomao Mall, a life-size Xiao Zhan figure stand was placed in the most conspicuous place. “There are many co-branded models in the store. If you like them, try them out. Many of them are limited editions.” The clerk greeted the young customers.
The store does not display many styles of shoes and clothing. According to the clerk, this store is a SVIP store. Popular styles will be updated first every season, and the products are mainly new products of the season. “The online store has both new and old products, and there is no separation between Li-Ning (which specializes in sports) and China Li-Ning (which specializes in trendy products). Our store is full of trendy new products. The lowest price of shoes is more than 699 yuan, T-shirts, Sweatshirts and bags are generally priced at more than 499 yuan.” She also emphasized that there are rarely discounts.
“We now have some popular items that cannot be purchased in other stores.” The clerk pointed to the clothes and backpacks of the same style as the Xiao Zhan poster. Since it was officially announced that Xiao Zhan became China’s Lining After the new spokesperson was appointed, there were many more fans and customers in the store. The same products as the spokespersons were often sold out. Many fans also added the store staff’s WeChat account to make direct online reservations and offline purchases.
Picture/Photo taken by Li Ning International Trade Store in China: Ma Weibing
“Now the main consumer groups of Li Ning It is also the sports circle and the mid-to-low-end fashion circle. Those who play sports wear Li-Ning, which is both patriotic and practical; those who play fashion wear Li-Ning, which is not expensive and fashionable, and there is no shame in wearing it.” Feng Qi, born in the 1990s, loves to buy trendy shoes. Nike and Adidas account for half of the shoe cabinet, but in recent years he has also collected several new pairs of domestic sports brands. “Several domestic brands are doing quite well now. I often look at the trendy models of Li Ning and Anta, as well as the Peak Tai Chi series that was touted last year.”
For some For ordinary consumers, March this year is also an opportunity for them to change their consumption outlook. In the days before and after May Day, sales of Li Ning’s “China Li Ning” brand at its Tmall flagship store increased by more than 400% year-on-year, and Anta also increased by 46% year-on-year. During the Tmall 618 event, Anta’s sales on June 1 alone exceeded the total of the three days last year.
Picture/Li Ning Factory Discount Store Photographed by: Ma Weibing
But specifically for Li Ning, there are not only homeopathic elements behind the changes, There is also the proactive part. For example, Xiao Zhan, a top star in the fandom, has been signed.
2 Li Ning’s attack
Recently According to data from the international rating agency Morningstar, sales of brands such as Adidas and Nike at Tmall flagship stores fell severely in April, both halving from the same period last year. Among them, Adidas’ April sales fell by 78% year-on-year, and Nike’s April sales fell by 59% year-on-year. Uniqlo’s April sales fell by more than 20% year-on-year.
While the sales of international brands are experiencing Waterloo, domestic products are booming. The overall sales of Li Ning and Anta increased by 72.3% and 51.2% year-on-year respectively in April. Among them, the sales of Li Ning’s brand China Li Ning in Tmall flagship store in April increased by more than 800% year-on-year, and it was difficult to find a variety of products.
Image source: Credit Suisse Report
Credit Suisse released a report on China’s sporting goods industry stating that in April The sales of the Tmall flagship store account for 30% to 40% of the overall online sales of mainland sports brands. Before and after the May Day holiday, domestic brands experienced a collective surge in sales. According to Credit Suisse statistics, from April 27 to May 3, compared with the same period in 2020, sales of Li Ning’s “China Li Ning” brand in Tmall flagship stores increased by 419%, followed by Anta, which increased by 46.3%, and Xtep, which increased by 29.3%. The national tide has ushered in spring.
In this regard, economist Lang Xianping believes that Li Ning is selling well and Nike and other sales are booming.There are three reasons for this: first, China’s manufacturing level is high and quality is guaranteed; second, fashion brands are more likely to attract the attention of young people; third, national complex, patriotic complex and other factors are mixed together.
Picture source: Weibo
After the Xinjiang cotton incident in March, many consumers They have begun to shift their attention from international brands to domestic brands. Some netizens said that many teenagers are even resistant to buying brands involved in the Xinjiang cotton incident.
Picture source: Weibo
3 Out of stock everywhere offline Li Ning’s stock price skyrocketed
“The cotton shorts have been sold out and out of stock.”
“These shoes are no longer available in sizes , this is the last pair”…
At noon on May 9, CSI visited the China Li Ning store of Changsha IFS and found that there were many customers in the store, and the store had a variety of The product is out of stock.
Picture taken by our reporter Duan Fangyuan
The store’s shopping guide told China Securities Journal: “We It is the largest Chinese Li-Ning store in Hunan and has the most complete range of goods. If we run out of goods, you basically can’t find them anywhere else. Out-of-stock situations are common now, and popular items are sold out quickly. Limited editions are even more difficult to buy.”
In addition, the shopping guide told CSI: “Our recent business has indeed improved a lot. On the one hand, after the Xinjiang cotton incident, , everyone pays more attention to domestic brands and finds that we are actually very fashionable and the quality is no worse than that of international brands; on the other hand, our newly signed spokesperson Wang Yibo also has some driving effects.”
According to the shopping guide, the sales of his store have increased by about 30% compared with the same period in previous years. “Not only is our business good, Li Ning Sports’ business is also very good.”
Picture taken by our reporter Duan Fangyuan
Benefiting from the growth in sales, Li Ning’s stock price has increased from March It has been going up ever since. It reached a high of 72.95 yuan/share on May 7. As of the close of trading on May 7, the stock price was at 68.5 yuan/share, with a total market value of over 170 billion yuan. Between March 9 and May 7, Li Ning’s stock price rose by a cumulative 67.07%.
If you only look at the price, the prices of some of Li Ning’s products are already in line with Nike. However, some consumers may feel that it is not worth it and think that the technological level of the product has not kept up. “For example, Li Ning’s current technology series, priced at 899 yuan, is actually similar to the revision of Adidas’ technology series four or five years ago. At that time, Adidas also sold it for more than 800 yuan, but now it has given up on this technology and is developing new technologies and Product line. Nike also has accumulated technology patents, but Li Ning is still far behind them.” In the impression of sports expert Cheng Chen, Li Ning began to increase prices as early as 2018.
“It’s okay to increase the price of domestic products, but the technology and appearance should be improved first. The biggest cost of shoes is the mold + design. After the boycott of H&M, I feel that domestic brands can take advantage of this opportunity. Eat more markets, but the product strength of domestic brands has not increased, and prices have soared first, which is a bit like cutting leeks.” Cheng Chen said bluntly.
4 A completely different path from Nike
“Now Li Ning is trying to take a path that does not copy Adidas and Nike. Nike’s path is completely different.” Ma Gang revealed that Nike and Adidas pursue globalization, multi-brand, and professional sports style. In the past, this path was the strategic reference for Anta and Li Ning.
Anta is a fan of globalization and multi-brands. Among them, the acquisition of Fila in 2009 can be said to be an important step in Anta’s buying and selling journey. It can even be said to have reinvented Anta. merit.
Li Ning also tried to take the road of brand mergers and acquisitions before, but the acquisitions of Lotto, Aigao, Kaisheng, etc. were not too successful. Later, Li Ning embarked on a single-brand, Multi-category routes. “It will be difficult for Li Ning to surpass Nike, Adidas and Anta by following the traditional path. However, the combination of domestic products, national fashion and sports will bring unprecedented opportunities.”
This means that Li Ning will Improve your own product capabilities. Zhang Qing is optimistic about this and believes that originality is Li Ning’s gene. He remembers that in the late 1990s and early 21st century, many brands were copying international brands, but Li Ning was not like that.
At present, Li Ning has carved a way in the field of sports trends by integrating it with traditional Chinese elements. Take China’s Li-Ning autumn and winter fashion show held in Zhengzhou in April as an example. In addition to patterns and fabrics, Li-Ning’s designs also pay great attention to craftsmanship details. For example, in order to draw inspiration for embroidery techniques from Miao embroidery, they personally went to Miao villages to learn stitching and cross-stitch techniques. They also learned from tie-dye techniques such as indigo dyeing and plant dyeing when printing and dyeing.
At the strategic level, Li Ning invited Takeshi Kosaka as co-chief executive in September 2019. This veteran of the clothing industry who has worked for Uniqlo for 23 years is good at supply chain management and Store operations. At that time, it was speculated that while Li Ning was cultivating successors, it also hoped to take the opportunity to strengthen cost control, improve operational efficiency, and make up for Li Ning’s long-standing shortcomings.
Judging from the 2020 financial report, it was not easy for Takeshi Kosaka to achieve a group gross profit margin of 49.1% during the epidemic, which was the same as the previous year. The net profit margin also increased from 9.1% to 11.7%. However, in the equally difficult year of 2020, Anta’s gross profit margin increased by 3.2 percentage points to 58.2%, and its operating profit margin reached 25.8%.
However, the brand’s catching up did not happen overnight. In public perception, Li Ning is still far behind Adidas and Nike. A staff member of the celebrity live broadcast room reported that the sales volume of the Li Ning brand’s special live broadcast in March did not meet expectations. “The data broadcast by their own brand store is good, but Li Ning has a large supply of goods and the products with higher cost performance are out of stock. The sales volume in the live broadcast is not very good.”
In the final analysis, for domestic sports brands to rise to the top, their products must be strong enough.
An industry veteran, he is good at supply chain management and store operations. At that time, it was speculated that while Li Ning was cultivating successors, it also hoped to take the opportunity to strengthen cost control, improve operational efficiency, and make up for Li Ning’s long-standing shortcomings.
Judging from the 2020 financial report, it was not easy for Takeshi Kosaka to achieve a group gross profit margin of 49.1% during the epidemic, which was the same as the previous year. The net profit margin also increased from 9.1% to 11.7%. However, in the equally difficult year of 2020, Anta’s gross profit margin increased by 3.2 percentage points to 58.2%, and its operating profit margin reached 25.8%.
However, the brand’s catching up did not happen overnight. In public perception, Li Ning is still far behind Adidas and Nike. A staff member of the celebrity live broadcast room reported that the sales volume of the Li Ning brand’s special live broadcast in March did not meet expectations. “The data broadcast by their own brand store is good, but Li Ning has a large supply of goods and the products with higher cost performance are out of stock. The sales volume in the live broadcast is not very good.”
In the final analysis, for domestic sports brands to rise to the top, their products must be strong enough. </p
