"Prince of Gymnastics" Li Ning not only won a series of unprecedented achievements in his career, but also crossed over to create a sports brand "Li Ning" that was once close to Nike in the domestic market, becoming an undisputed "first brother of the national tide", taking advantage of the 2008 Beijing Olympic Games, "Li Ning" became popular all over the country, and the story of a generation of business legends began.
However, the world is unpredictable, I thought that "Li Ning", who was born in 90 years and reached its peak at the "eighteen-year-old" coming-of-age ceremony, would continue to write a 10-year glory, but only 3 years later, "Li Ning" ushered in a textbook failure and entered a period of turmoil.
"Li Ning", which is high-end and sells more and more expensive, has been thrown away by Anta in terms of revenue and profits, and there is also a Xtep eyeing him, how can he sleep peacefully on the side of the couch of the former "first brother"?
01, after 20 years of ups and downs, Li Ning is "lost"?
A while ago, Li Ning disclosed its 2023 financial report, which showed that the company achieved revenue of 27.598 billion yuan, a year-on-year increase of 7%, and a net profit of 3.187 billion yuan, a year-on-year plunge of 21.58%.
As a comparison, Anta's revenue last year was 62.36 billion yuan, with a net profit of 10.2 billion yuan, an increase of nearly 35%, Xtep's revenue last year was 14.346 billion yuan, and the net profit was 1.03 billion yuan, a year-on-year increase of 11.80%, and 361 degrees had a revenue of 8.42 billion yuan and a net profit of 1.38 billion yuan, an increase of 28.80%, as of 15:45 on April 29, Li Ning reported 20.800 Hong Kong dollars, with a total market value of 53.757 billion Hong Kong dollars, which is more than 80% away from the historical high of more than 280 billion yuan.
This leads to the first question, why was Li Ning once so beautiful?
The success of any brand is inseparable from the right time, place and people, the great success of Li Ning's growth period, the same is true, 89 years on the sword of the sports shoes and clothing market Li Ning, can be described as the first "gold digger" of the mainland sports brand, at that time Anta, Hongxing Erke, Peak and other brands, is still wearing "open crotch pants" Even Anta, which was established immediately after Li Ning, was mainly overseas OEM in the first 10 years of the brand, and it was not until 1999 that Kong Linghui signed the brand self-operation stage, that is to say, Li Ning made efforts ten years earlier than its friends, and first occupied an unparalleled first-mover advantage. In addition, Li Ning's own aura of honor has brought great empowerment to its brand image, making Li Ning an instant hit, coupled with all kinds of large-scale sponsorship and advertising, Li Ning's performance has soared, and in 2008, Li Ning's revenue increased by 54% year-on-year, setting a record high.
According to "People", "the factory's car does not need to be unloaded when it is pulled to the warehouse, and the dealer's car is moved away directly and does not land at all" - which shows how popular Li Ning was back then!
With such a solid foundation laid in the first decade, why did Li Ning fall from the altar?
Li Ning, who has been making great progress all the way, was immersed in the joy of a bumper harvest at that time, and like many domestic sports brands that have eaten the crazy expansion of the Beijing Olympics dividends, they only care about eating meat first, completely unaware that the "Olympic fever" in 08 is an early overdraft of their sales in the next few years. In addition, the enthusiasm for national sports began to ebb, and in the next few years, the disadvantages of overcapacity began to appear.
The entire sports shoes and clothing market began to show a downward trend around 2011, and in 2013, the scale of the industry was further reduced, and each family had a hard time, and when the industry entered a downward cycle, Li Ning not only did not reduce prices and clear inventory like international brands, but instead adopted the sword of "others are afraid of me and greedy", and launched the post-90s Li Ning against the trend, but failed to reverse the decline.
In 2011~2013, Li Ning ushered in a round of store closures and customer loss, and the revenue of tens of billions of dollars was cut in half, and the capital chain was about to break for a while, 2012~In 2014, Li Ning's total loss has reached 3 billion yuan, China's first sports brand throne, the flower fell to Anta, this turbulent cycle, Li Ning has two people have left one after another, when the building is about to fall, fade out of the front line for many years of the founder Li Ning had to go out of the mountain, turn the tide in the fall, catch up with the Internet marketing and e-commerce era dividends, Li Ning finally turned losses into profits, once again on the right track.
The 2018 New York show is Li Ning's magic stroke out of the circle again, so that the "China Li Ning" and "national tide" labels have completed the epic binding, Li Ning's performance soared, breaking through the 10 billion revenue mark for the first time, which allowed Li Ning to regain confidence.
In 2021, Nike Adi was deeply involved in the Xinjiang cotton business and encountered a group boycott, and Li Ning, who has a keen sense of smell, immediately played a patriotic feeling of supporting Xinjiang cotton, and countless consumers were excited and used actions to support Li Ning, and for a time, China's Li Ning sales soared by 800%, and in the same year, Li Ning recorded a revenue of 22.572 billion yuan, which can be described as the limelight.
Li Ning, who has risen again, why is it silent again?
Because at this time, the dramatic scene happened again......
02, the road to high-end is long
If Li Ning's recovery process is compared with the flowering period, the biggest problem is that the flowering period is too short, not long after China's Li Ning became popular, there was a series of moths, and without exception, there was no interference from any force majeure factors, and the next many incidents made Li Ning fall into the mud!
In September 2021, during the 14th National Games, the Tokyo Olympics badminton women's singles champion Chen Yufei's toe was scratched and bleeding by sneakers, which attracted attention, and Li Ning was the sponsor of this pair of shoes, which caused a huge storm of Li Ning's quality doubts.
In October 2022, Li Ning once again exposed a "stupid trick", a set of winter coats for its new autumn and winter products, which caused a huge controversy because of their resemblance to Japanese military uniforms, but Feng Ye, general manager of Li Ning e-commerce, also added fuel to the fire, attributing the head to the lack of knowledge of Chinese consumers, which completely angered consumers.
After these operations, Li Ning's hard-earned brand reputation has consumed most of it, and under the premise that the brand and cost performance are not dominant, he has played a routine of rising prices, and can he blame passers-by for drifting away?
The beginning of Li Ning's launch of the more advanced sub-brand "Li Ning 1990" is a sign of its All in high-end, positioning the high-end light luxury LI-NING 1990, the product price band has jumped to about 800~5000 yuan, and has opened 24 directly-operated stores in the core business districts of the first line and the new first line such as Henglong, The MixC and SKP.
It is a pity that the "Li Ning 1990", which was pinned on by Li Ning and sold more expensive than "China Li Ning", did not make Li Ning soar!
As of the end of the first half of 2023, the inventory amount of Li Ning reached 2.1 billion yuan. BOCOM International pointed out in a report that online and offline price arbitrage has become a thorny problem for Li Ning due to consumers becoming more sensitive to prices, weak sales of franchisees, and greater inventory pressure caused by Li Ning's large single product matrix and higher prices.
In addition, many sports brands in China have a common weakness - focusing on marketing and ignoring research and development, which is the fundamental reason why they cannot support high-end premiums.
Huawei's success has made domestic high-end mobile phones have a high premium strength affirmed by the Chinese people for the first time, and it has also made Xiaomi OV Glory and other brands envious, the hard core logic behind this is that Huawei holds countless technology patents, and the products have no black technology experience, which is the confidence to support the brand premium, you have no hard power support, just wishful thinking to increase prices, that will soon be slapped in the face by consumers, and have to reduce prices to inventory, sports shoes and clothing industry, the same way.
Nike's patent content is far ahead of domestic brands, which we first need to recognize, this is not to grow other people's ambition, or to objectively see the gap, and among domestic brands, the number of patents of Anta once reached 3.5 times that of Li Ning, which directly reflects the level of the brand's R&D investment and talent reserve.
In 2023, ANTA's R&D investment in innovation will reach RMB1.614 billion, leading the rest of the domestic brand-listed footwear and apparel companies in terms of absolute investment, with Anta 2.6% and Xtep 2.8% in terms of relative R&D intensity, which is also slightly ahead of Li Ning's 2.2%.
If there is no excellent original technology selling point, it is not easy to tell a high-end story, and the old era of selling straw for gold by marketing alone is long gone, and even this post-00 generation has developed a consumption concept of only choosing the right one.
Can Li Ning, who has "stalled", regain his strength?
See!