Li Ning falls into a “low ebb” Anta rushes to become the leader of local sporting goods

It is said that the Chinese team in the Shanghai World Championship diving competition has also dreamed up, but I am more concerned about another diving competition in Hong Kong: the stocks of several of the country's best sporting goods companies have been diving again and again. For one year (as of August 1st), ANTA Sports shares fell 14.31%, Peak Sports fell 17.46%, Xtep International fell 19.17%, 361 degrees fell 32.88%, the final champion is Li Ning, fell 62.64% .

The sporting goods industry, which has been growing rapidly, is facing a hardship. The reason is that the over-expansion in recent years has led to a slowdown in growth, a large inventory, and a drop in profits. This is what Nike and Adidas had previously suffered in the Chinese market.

However, it is difficult to explain why investors will be more distrustful of Li Ning. Usually when a disaster strikes, investors will trust more experienced teams. Li Ning, which has been established for more than 20 years, should have provided investors with more security.

It seems that Li Ning has at least adopted a similar strategy with other sporting goods brands in the past few years: to promote revenue growth through an expanding sales network. As of the end of 2010, Hong Kong-listed five sportswear brands had more than 7,000 retail stores.

So, why is Li Ning more questioned? The most direct answer is that this company has not had a good answer for a long time on a series of most basic strategic issues.

who am I. Although the Li Ning brand has a history of 20 years, but the brand is more reminiscent of the well-known founder. In addition, this brand is difficult to give people a strong sense of belonging. Li Ning's earliest brand interpretation is Everything is Possible, which seems to be another way of admitting Adidas' “Nothing is Impossible”. Last year, Li Ning launched a new slogan called "Make the Change," which looks more like a company's own appeal than it is for consumers.

Who to sell to. Li Ning’s initial target consumer group was the post-70s population in China. Last year, Li Ning targeted its target consumers to the post-90s population. This is a radical strategy that directly discards the post-70s and post-80s crowds, but it does not seem to be buying after 90. And Li Ning's pricing is not clear, its product prices are lower than Nike, Adidas and other international brands by 20% to 30%, but higher than the domestic brands 35% to 45%, consumers do not want to buy one is not the cheapest and not the most quality Good product?

What to sell. Last month I met with a radical Internet entrepreneur. His words about the product impressed me: This is the era of a product, as long as the product is good enough, word of mouth can be passed on. New technologies make information flow and sharing so fast and convenient. The popularity of SNS websites also makes word of mouth a truly important marketing method. Compared to Nike's legendary series and Adidas's clover series, Li Ning seems to have never had a classic. In addition, Li Ning accidentally abandoned football and basketball products as the core, evading the pressure on the future of badminton.

How to sell. The retail store is Li Ning's core channel, but Li Ning does not clearly distinguish the channel management quality from its competitors. Morgan Stanley expects Li Ning will need 1.448 billion yuan for inventory repurchases in the coming years. Li Ning announced that it has completed the integration of 256 inefficient stores and will complete the integration of 400 stores by the end of the year. However, this company has not changed its traditional expansion model driven by opening new stores. Its strategy is to store retail stores from the current About 8,000 increased to 10,000.

It is hard to believe that a company with a double-digit growth over the past 20 years has a series of basic strategic issues. However, this is a fact, and the cover of this series of issues is the Chinese market, which is so difficult to make clear. The chief culprit of strategic issues is usually the CEO.

But the root cause of this problem is Li Ning, the founder. He seems to be unable to hand over a company that has not reached maturity to Zhang Zhiyong, a professional manager with financial background. CEOs of CFO backgrounds are not uncommon, but CEOs with financial background are more suitable for mature companies—brands, products, and channels are all very stable. At this time, the growth of the company’s performance is more dependent on management, especially on financial management capabilities, and collections. Even corporate mergers and capital operations. For Li Ning, it is clear that it is in a product-based and channel-based cycle, and can not rely on management and finance to solve the main problem, but the need for a dreamer to break through various bottlenecks.

The sporting goods industry has always been extremely competitive, and Li Ning's performance has been declining due to inventory, and it is still in a turbulent mood. This gives the rival Anta an excellent opportunity to catch up.