Text | Guan Tide New Consumption, author | Wang San, Editor, | perilla
After the quadrennial Olympic boom faded, Li Ning handed over a dazzling report card.
According to the 2021 interim results report, Li Ning's revenue increased by 65% year-on-year, and net profit rose by 187% year-on-year. In the past six months, international brands have folded due to the "cotton incident". Under the continuous assistance of the Olympic Games and the national tide, Li Ning's sales have risen continuously.
With a market capitalization of HK$227 billion, Li Ning has steadily returned to the peak. But in the thirty years since the completion of the transformation of "Olympic athletes" into "business winners", Li Ning has experienced too many ups and downs in his life.
<h2>01 1988, open</h2>
In 1988, the 25-year-old "prince of gymnastics" Li Ning announced his retirement.
The talented athlete, once known as the "sports playground god", bid farewell to the arena in the insults of the "gymnastics dead son" caused by the mistakes of the Seoul Olympic Games in the same year.
The merits of the 8-year sports career are soon no longer commented on, the professional arena generation has talented people, the quadrennial carnival, like a precision gear to promote the frequency of new generations.
But the height that Li Ning has reached in another field has not yet come.
At the Seoul Olympic Games, Li Ning's bitter smile because of the mistakes in the game was infinitely magnified by the media. When he landed at the Beijing airport, even the staff sneered at him. There was only one person who brought him flowers and encouragement, and this person was Li Jingwei of Jianlibao.
After retiring, Li Ning faced two choices, one was to go to the Guangxi Sports Commission as a deputy director, and the other was to go to the national gymnastics team as a coach. But because of Li Jingwei's words, Li Ning went to Sanshui, Guangzhou, which was only a township enterprise at that time, and served as Li Jingwei's special assistant.
Li Jingwei said to Li Ning, your name is the greatest value.
In 1990, Li Ning, wearing a white Li Ning brand sportswear, took over the Asian Games flame on the Qinghai-Tibet Plateau, and the Li Ning brand, which had just been founded for 3 months, faced the Thousand Horses and Thousands of Horses and Thousands of Troops with Jinjiang Shoe Uppers alone.
At that time, Jianlibao transformed a five-story warehouse into a Jianlibao garment factory to produce Li Ning brand sportswear. In addition, Jianlibao used 16 million yuan to sponsor the Asian Games, helping Li Ning win the sponsorship of the torch relay.
As the designated costume for the transmission of the flame of the 11th Asian Games, the medal uniform of the Asian Games of the Chinese national team and the designated clothing of Chinese and foreign journalists, the "Li Ning brand" sportswear accompanied the transmission of the flame of the Asian Games, from Sanshui, Guangdong to the whole country.
By the time the Asian Games closed that year, Li Ning had already received 15 million orders.
At the 1992 Barcelona Olympic Games, Li Ning appeared as the special medal-receiving uniform of the Chinese sports delegation, ending the history of Chinese athletes wearing foreign sports uniforms at the Olympic Games. In the next three Olympic Games, Li Ning has been a sponsor.
In 1994, Liu Jipeng, a professor at the Capital University of Economics and Business, made a suggestion to Li Ning that since Jianlibao was the majority shareholder of Li Ning Company, and the major shareholder of Jianlibao was Guangzhou Sanshui Company, the hidden dangers in the equity structure would restrict the development of enterprises, and they should establish their own portals as soon as possible.
Under the repeated persuasion of Liu Jipeng, Li Ning finally opened his mouth, and Li Jingwei unconditionally supported. At the end of the same year, Li Ning redeemed the shares held by Jianlibao in the form of cash at a cost price of 16 million, and Li Ning Company successfully became independent.
After the first turn, the development of Li Ning Company entered the fast lane, but Li Ning himself gradually diluted the role of manager.
In 1996, Li Ning moved the company's headquarters to Beijing, and the revenue reached 670 million yuan in the same year. In Li Ning's view, his professional ability was not enough to manage enterprises of this scale, so he merged the three companies of Beijing, Guangdong and Yantai into Li Ning Sporting Goods Group Company, and served as chairman and general manager himself, and the specific business matters were fully delegated to Chen Yihong, who was already deputy general manager at the time.
The integrated company has indeed spent several years of golden growth under the leadership of Chen Yihong. In 1995, Li Ning's total revenue reached 360 million yuan, in 1996 doubled to 650 million yuan, under the influence of the 1997 Asian financial crisis, Li Ning still retained 680 million yuan of revenue.
In 1997, Chen Yihong took over the position of general manager, Li Ning himself went to Peking University to continue his studies, Li Ning's brother, sister-in-law, sister and other cronies quit the company, Li Ning company faded the color of family business, officially entered the era of professional managers.
But after officially taking over, Chen Yihong encountered a bottleneck. Li Ning's sales growth peaked, and it was unable to break through the 1 billion mark. In 2001, Chen Yihong stepped down and was succeeded by Zhang Zhiyong, who was one of his hand-picked.
Zhang Zhiyong graduated from the Beijing Institute of Economics (now the Capital University of Economics and Business), and after graduation, he was recruited by Chen Yihong to join the company, starting from a cashier, and then promoted to financial manager, gradually involved in the financial planning at the company level.
After the second generation of professional managers took office, Li Ning's development accelerated again. In 2003, it successfully achieved the goal of 1 billion sales, and in 2004, it was successfully listed with a report card with a turnover of 1.27 billion yuan and a net profit of 94 million yuan.
But behind this report card, it is not Li Ning's riding dust, but the rising tide of the sportswear market.
In 2003, Li Ning's sales exceeded 1 billion at the same time, but for 9 consecutive years the first position of domestic market share was taken away by Nike; in 2004, the scenery was listed, and the market share was overtaken by Adidas; in 2005, Li Ning's revenue increased by more than 30%, but still did not surpass the market ranking of the two major international giants.
What's even more frightening is that from 2004 to 2008, ANTA's sales doubled almost every year. Li Ning's goal is to overtake Nike and Adidas, but seems to ignore the opponent behind him.
Li Ning, who struggled to maintain the third place in the industry, encountered the first crisis in the history of the brand, but the way to survive this crisis was full of drama.
<h2>02 2008, crisis</h2>
In 2008, Li Ning walked the wall of the bird's nest cornice and lit the main Olympic torch. This time, his identity is "trapeze artist".
It was the year when the enthusiasm for the domestic movement was the highest, and a song "Welcome to Beijing" broadened the hearts of the people of the whole country. Many people remembered that they still owed Li Ning an apology, and this apology was written into Li Ning's financial report.
According to financial data, Li Ning recorded a net profit of 945 million yuan in 2009, up 31% year-on-year, an increase of nearly 10 times compared with the time of listing. In 2010, Li Ning's net profit attributable to the mother rose to a peak of 1.108 billion yuan, and finally surpassed Adi in terms of market share.
In the span of 20 years, the two rises of the Li Ning brand have come from the aura of Li Ning himself, does this prove that the professional manager's route is wrong?
The time goes back to 2004, and Li Ning, who lost the top two, is painfully thinking about change.
At the time, Nike was the first to discover the fashion trends in the post-millennial sports market. The Jinjiang Gang's Anta, Peak, and Hongxing Erke also reversed the encirclement and suppression from the sinking market outside the "Five Rings", and "Bao San vying for two" became the biggest target of Li Ning's second-generation professional manager Zhang Zhiyong.
Zhang Zhiyong's reform strategy is "professional + fashion". Professionalism is reflected in the professionalization of the team, a large number of elite management parachutes; fashion is reflected in the design, but it is still through the airborne high-paid designers in a straightforward way.
Unfortunately, the run-in period between the paratroopers and the elders was not considered in advance by the decision-makers, or deliberately ignored. Li Ning did not make conspicuous achievements from the design level, but showed the back and forth between fashion and sports, domestic and international from the strategic level.
In fact, it is precisely because of the lack of running-in that it has led to the hidden danger of unclear powers, and in some decisions that require decisive action, a delay will make a judgment.
In 2004, the eyes of the sports world were on basketball. Yao Ming, who conquered the other side of the ocean, took away too much attention, and the CBA's business prospects were bleak, and he gritted his teeth to open a new round of investment. Although the list price has been as low as 10 million per year, the head of the li yuanwei personally came to the door, but still li Ningwan refused.
Waiting for the opportunity, ANTA took a decisive shot and signed a 3-year and 60 million endorsement contract at a price twice as high as the quotation. This contract continued with the growth of ANTA for 8 years.
In 2012, when Li Ning snatched back the CBA contract from Anta, he paid a price of 2 billion yuan for 5 years. In 8 years, the price has increased by 20 times.
While Li Ning snatched back the CBA endorsement, Anta is already a sponsor of the Chinese Olympic Committee, and the status of the two sides has once again passed by, which can be called a textbook case of "one wrong step at a time".
In 2009, the National Day parade, Li Ning himself participated as a representative of the Olympic champion, but he had to wear ANTA's sportswear. In desperation, Li Ning covered ANTA's logo with the national emblem, but the stubborn diseases within the company could not be covered up together.
The decline in performance in 2010 is the best proof. According to the 2010 annual report, Li Ning's net profit has been exceeded by ANTA by MORE THAN 400 million Hong Kong dollars; on December 20 of the same year, Li Ning's stock price fell by 23% in one day, and the market value evaporated by 4.5 billion Hong Kong dollars, which is the worst decline since the listing.
In a board resolution in late 2010, Zhang Zhiyong was preparing to report his annual results to the board, and one director unceremoniously fired: "Don't talk about this again, it's useless, according to Global Entrepreneur." I just want to know what the cause is and when it will be resolved. ”
What Li Ning himself is most unacceptable is that ANTA has far exceeded Li Ning's HK$14 billion with a score of HK$35 billion, "Why can the Jinjiang brand catch up with us in two or three years?" What are our strengths now? What's the problem? What are we going to do? ”
This is not li ning's second crisis, because a bigger crisis is still brewing. In order to answer the founder's serial questions, Zhang Zhiyong shot continuously and led the transformation of high-end + youth.
In 2010, Li Ning began to rebrand and fully embraced the post-90s. In order to cooperate with the brand strategy of "Post-90s Li Ning", Li Ning's Slogan changed from "anything is possible" to "Make The Change", directly writing the change into the slogan.
In 2011, Li Ning cut all footwear SKUs with a unit price of less than 299 yuan to enhance brand positioning with high-priced products.
However, after the Olympic Games in 2008, the unified problem of all sports brands lies in the backlog of inventory after misestimating market enthusiasm, discounting inventory, and the practice of bucking the trend of price increases is too blind.
The transformation of rejuvenation is criticized by the industry, not only losing the loyal fans of the post-80s, but also the bias of the post-90s cognition is "offending" the main group of the consumer market.
In 2012, Zhang Zhiyong stepped down, and Li Ning invited Jin Zhenjun to be CEO. The third-generation professional manager of Li Ning, who is Korean-American, has made a more radical move and dominated the "channel revival" strategy.
From 2012 to 2014, Li Ning closed 4,500 stores. The company has lost money for three consecutive years, with a total loss of 3 billion yuan.
Before 2010, most domestic sporting goods companies imitated Nike and Adidas adopted the "asset-light" operating model, outsourced production and sales, focused on design and development and market promotion, and expanded distribution channels as a growth method.
Li Ning has long adopted the model of "directly operated stores + franchised stores" and accelerated the expansion of distribution channels, and in 2010, the number of distribution channels increased from 2526 in 2004 to 7333, while the number of direct sales channels only increased from 351 to 582.
After Jin Zhenjun took office, he adopted the method of buying back dealer inventory at a low price, but this kind of rule of law did not cure the root cause, and also made Li Ning's capital chain on the verge of breaking. In just two years, Jin Zhenjun stepped down, ending Li Ning's era as a professional manager.
In 2014, after Li Ning himself returned as acting executive CEO, the qualitative changes of the company finally began to brew.
<h2>03 2018, turning</h2> point
In 2018, the "China Li Ning" sub-brand debuted at New York Fashion Week with the theme of "Enlightenment", opening Li Ning's "National Tide Era".
On the day of the new York show, "Li Ning's" WeChat index soared by 700%; in the three days after the conference, the total number of tweets about Li Ning at New York Fashion Week exceeded 15 million times.
In the same year, the "China Li Ning" series of clothing sales exceeded 5.5 million pieces, shoes sold more than 50,000 pieces, and the sell-out rate of both exceeded 70%.
Li Ning, who rose for the third time, did steadily seize the dividends of the national tide, all of which stemmed from the reorganization of the company at the management level after Li Ning's return.
After Li Ning regained management power, he changed the slogan back to "anything is possible", and then solved the aftershocks of the inventory crisis by building a flexible supply chain, and began to promote the construction of e-commerce platforms.
After the 2018 Fashion Week, Li Ning Company suddenly "realized the Tao" and infiltrated young from the level of store display, design and marketing. Binding the "national tide" is the key for Li Ning to break into the young consumer group, and the products of the "China Li Ning" sub-brand have begun to use traditional elements such as landscape, ink and seal, and continue to strengthen the positioning of "new domestic products".
The data shows that in terms of national tide consumption, the attention of the post-95 generation is much higher than that of other groups.
In the following two years, "China Li Ning" has successively landed in Paris Fashion Week 2019, New York Fashion Week and Paris Fashion Week in 2020, and its positioning has begun to quietly transform into trendy fashion.
At the same time, Li Ning began to emphasize the blessing of scientific and technological research and development for product strength, in addition to maintaining R & D investment of 3% for several years, there are "bow", "?" and other series of new technology products.
After three years, consumers have no time to think about the question of "wearing Li Ning is patriotic, patriotic is not necessary to wear Li Ning", but silently acknowledged the perfect transformation of "China Li Ning" from a sports brand to a light luxury tide brand with purchasing power.
For example, the footwear of "China Li Ning" is priced in the range of 800-1200 yuan, which is more than 3 times the price range of 160-320 yuan of the Li Ning brand. The saying that "there was no money to buy Li Ning before, now there is no money to buy Li Ning" has also begun to circulate on social platforms.
After ten years, Li Ning has finally completed the transformation of high-end + rejuvenation in the true sense, and when another Olympic Year arrives, Li Ning is fully prepared.
In April 2021, after the outbreak of the "Xinjiang Cotton Incident", the sales of the Adidas Tmall flagship store fell by 78% year-on-year, and Nike fell by 59% year-on-year. In stark contrast, Li Ning's sales increased by 72% year-on-year, Anta's sales increased by 51% year-on-year, and the sales of China's Li Ningzi brand in Tmall flagship stores in the same month even increased by more than 800% year-on-year.
The latest earnings data from Nike and Adidas also confirmed the loss of power of international big names.
On June 24, Nike announced its results for the fourth quarter of fiscal 2021 ended May 31, during which Nike achieved revenue of $1.933 billion in Greater China, down 15% sequentially.
On August 5, Adidas announced its financial report for the second quarter of 2021, with operating income of 5.077 billion euros in the second quarter, an increase of 52% year-on-year, but Greater China became the only region where Adidas had negative revenue growth in the quarter, with revenue falling 15.9% year-on-year to 1 billion euros.
In addition, there is another positive news at the national policy level. On July 3, the "National Fitness Plan (2021-2025)" pointed out that by 2025, the national fitness public service system will be more perfect, driving the total scale of the national sports industry to reach 5 trillion yuan. According to the National Bureau of Statistics, in 2019, the total scale of China's sports industry was 2.95 trillion yuan. This means that in the next five years, the compound annual growth rate of the domestic sports industry will be about 9.2%.
After the "Document" was introduced, A-shares and Hong Kong sports concept stocks have ushered in a collective surge.
Subsequently, the Tokyo Olympics opened, bringing a quadrennial high level of exposure to sports brands. During this year's Olympic Games, Li Ning provided sponsorship for the Chinese diving team and the Chinese table tennis team, two teams that almost won the championship, so that Li Ning's logo repeatedly appeared on the podium in Anta's "encirclement and suppression".
It is worth mentioning that after the "Xinjiang Cotton Incident", Li Ning suffered two public opinion crises in succession. One is that the original price of 1499 yuan of limited shoes on a platform to 48889 yuan of sky-high price, was criticized for hunger marketing; the other is the rapid official Xuan Xiaozhan as a spokesperson, was questioned "disgusting consumers".
However, since March this year, Li Ning's stock price has risen by more than 99%, revenue and net profit have also ushered in a double explosion, and negative public opinion has soon been overwhelmed by the heat of the Olympic Games.
On August 13, Li Ning released the first half of the financial report. According to the financial report, In the first half of the year, Li Ning's revenue increased by 65% to 10.2 billion yuan, and the net profit soared by 187% to 1.962 billion, with a net profit margin of 19.2%.
Since taking the National Tide Express, the time and place are in place, but Li Ning still needs to prove his people after the Olympic boom recedes.
Because there is a question that has not yet been answered: Is it Li Ning who brought fire to the national tide, or did the national tide make Li Ning? Or is it Li Ning who led the way, or did he gamble in the right direction?
The branch of the tide brand is separated from the positioning of the sports brand, and finally the miracle of the ultimate savior is staged by the sub-brand, but the fashion wind direction changes extremely quickly and is difficult to predict, and the sports trend is a four-year thunderous wave.
<h2>04 Conclusion</h2>
The three years ending in 8 cleverly record the rise and fall of Li Ning himself and the sportswear giant. In the past thirty years, there have been several twists and turns of several crises, and Li Ning has also punched Nike, stepped on Adi, carried the encirclement and suppression of the Jinjiang Gang, and also defeated himself.
But it is undeniable that in Li Ning's three rises, the blessing of the Olympic aura has not been absent. Compared with the huge crisis after the "flying self-help" in 2008, Li Ning today has not shown the slightest trace of decadence.
In addition to not reaching half the market value of its old rival Anta.