With Sales Lagging Back In China, Li Ning Surges Into U.S. Market
Li Ning launched its newest brand at a gala event in Texas last month with U.S. basketball player Dwayne Wade "showing off sports shoes he helped design," according to Kwok & Jourdan of REUTERS. But his fans "can't buy them yet." Li Ning has no stores in the U.S. and "recently shut the e-commerce section of its U.S. website." It has left analysts "puzzling the logic of splashing out on an expensive NBA superstar with no apparent U.S. retail strategy in place." Sports industry analysts said the Wade signing was "more about marketing to Chinese consumers than trying to build brand recognition" in the U.S., where Nike and its Jordan brand control 90% of the basketball shoe market. Colorado-based sporting goods research group SportsOneSource analyst Matt Powell said, "The primary idea here is to say to the Chinese consumer, 'One of the best players in the NBA is wearing our shoes and you should too.'" The Chinese firm is "paying top dollar for an elite athlete" just as Nike and other established sportswear brands are scaling back on big-name endorsements because of disappointing returns. Haitong Int'l Research analyst Elyse Wang in Shenzhen said, "It (the Wade deal) has a positive effect in boosting Li Ning's image ... but it doesn't necessarily generate more sales. The deal is not justified as for sure it's offering a very high price" (REUTERS, 3/23).