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SBD/October 12, 2011/Marketing and Sponsorship
Nike To Continue Investing In China, Plans To Double Sales In Country By '15
Published October 12, 2011
LI NING FALLING BACK: The FINANCIAL TIMES' Patti Waldmeir reported Li Ning in the latest rankings of the richest people in China “has tumbled from 64 last year to 291,” and the decline in fortune “mirrors that of the Olympic gymnast’s self-named brand, which last year had overtaken Adidas for second place in the Chinese sportswear market.” Li Ning CEO Zhang Zhiyong last year “was predicting it would be a top-five global sportswear brand by the end of the decade.” But Li Ning since has “seen its profits and share price plunge and is rethinking its ambitious branding strategy.” With “so few successful Chinese brands in the global marketplace, the trials and tribulations of Li Ning can be seen as a proxy for the fortunes of brand China.” The company's net profits “fell 50 per cent in the first half year on year, and its share price has fallen 57 per cent since the beginning of the year.” The company last year “unveiled a new logo, and a plan to reposition the brand as a near-direct competitor with global brands” such as Nike and adidas. But with many consumers “unwilling to follow a local brand upmarket, Li Ning appears to be returning to its cheap-and-cheerful roots.” It still holds a “slight advantage over Adidas in the China market led by Nike, but market analysts expect it to slip back to third place soon.” Zhang admitted that Li Ning “had lost loyal customers when it raised prices.” Meanwhile, Waldmeir noted adidas is “expanding aggressively into Li Ning territory in smaller Chinese cities, and aims to boost its presence from 550 to 1,000 cities by 2015” (FINANCIAL TIMES, 10/11).