Is Lining Changing The New Logic Of Business Circles?

Editor's note:

From symmetry to asymmetry, from "everything is possible" to "let change happen", in June 30, 2010, Lining (China) Sports Goods Co., Ltd. (HK.2331, hereinafter referred to as "Li Ning Co") released the new LOGO (logo) and Slogan (slogan).

"Through external research, consumers feedback from the preferences and the intuitive perception of the original LOGO, Lining gives people a positive, potential, Chinese characteristic, approachable and reliable brand image, but we must change in fashion, cool and international perception."

In the next few years, Fang Shiwei is afraid to repeat the same words N times.

Fang Shiwei, vice president of Li Ning Co group and CMO (chief market officer), entered Li Ning Co in June 2007. For 3 years, one of his most important tasks is Lining.

For Li Ning Co CEO Zhang Zhiyong, Lining's new release means more: the age of Lining's consumer groups is too large, and the future competition lies in the contention for young consumers; the domestic sporting goods industry can increase revenue in the past, and now needs more direct competition from the international brand giants from the industry. Li Ning Co needs to shift the main battlefield from the domestic two or three line market to the first tier and super large cities.

Intended to raise prices

According to the 2009 earnings report, Li Ning Co sales increased by 25.4% over the same period last year, achieving sales revenue of 8 billion 387 million yuan.

This figure exceeds the estimated sales of Adidas China in 2009.

That is to say, in 2004, when domestic sales revenue was surpassed by Adidas, Li Ning Co reclaimed the "top spot" after 5 years.

Nike China is still top of the list.

The industry estimates that Nike's domestic sales in 2009 were about 10 billion yuan.

But Zhang Zhiyong noted that the annual growth of the domestic sporting goods industry was about 30% before 2008, about 11% in 2009, and 15%~16% in 2010.

The growth of Li Ning Co itself is slowing down as the scale increases: in 2008, the company grew by more than 60% and only 25.4% in 2009.

"The driving force of market growth has changed.

Over the past many years, the driving force of the growth of sporting goods is distribution. We call for more stores. The Chinese market is very large, so that people can buy them, and there must be shops to facilitate consumers to buy, making the industry develop very fast.

Now the store is almost open, and then we will go back to the core and critical stage of competition, which we call product innovation and brand innovation.

Zhang Zhiyong told China business newspaper reporter.

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In 2006~2007, Li Ning Co's Market Research Report for consumers shows that the actual consumption of Lining brand has a certain deviation compared with the target consumer group. The overall population is larger, and the crowd aged 35~40 is more than 50%.

Zhang Zhiyong, who is regarded as the main target group of the new generation of creators (Generation 1 Creator) and 13~26, often finds Lining not "cool".

This is a headache for Zhang Zhiyong. After all, the idea of Lining, founder and chairman of Li Ning Co, has always been the "international Lining" rather than "China's Nike".

Even if we only do well in "China's Nike", Lining brand is bound to face a "rising" movement from two or three line cities to domestic front-line and super large cities.

Therefore, it is necessary to inject more vitality and fashion elements into Lining brand.

However, a cruel reality is that the rent of domestic and super large cities is rising rapidly.

It seems that Li Ning Co is facing more difficulties even if it wants to maintain its current profit margin.

Price increases seem to be the only way out.

Zhang Zhiyong said that under the big trend, Li Ning Co first let more young people like this brand; if only these are done well, the price of Lining will rise to find the reason and foundation.

Inventory risk

Even though Li Ning Co has been preparing for 3 years, Zhang Zhiyong admits that Lining's road to bid change and brand remolding can not go all the way.

"From the perspective of temporary risk, the first one is the old LOGO stock, because we can not foresee the impact of the new LOGO on the old LOGO, because the product is rising at the first level, and this product is more and more, and that product is getting fewer and fewer.

According to our past experience, inventory should be cleared in 24 months, so we need to accelerate the work. "

Zhang Zhiyong said that because he had no experience in this field, only Lenovo Inc in China changed LOGO successfully.

In addition, Zhang Zhiyong's second worry is that Lining's new LOGO enables consumers to understand that the company must maintain consistency and continuity in product design and marketing.

"In other words, within 5 years of different sports, all the ideas should be consistent, which is much more important than the idea itself."

In order to reduce the potential risks of changing the standard, Li Ning Co has made adjustments from the market system, product system and sales system.

In terms of product design and research and development, Li Ning Co's original clothing (including accessories) and sports shoes parallel business department turned into a matrix organization structure dominated by sports, such as basketball, running, badminton and so on.

On channel upgrading, Lining "

Whether Lining's pformation can succeed remains to be tested by the market.