Li Ning Woos Global Investors As Rivals Win on Its Home Field
- One of China's best-known brands is coming to the international market -- just as it is losing its home-court advantage.
For years, sports apparel and sneaker maker Li Ning was hailed as one of the few Chinese success stories in brand-building. Founded in 1989 by a Chinese gymnast of that name who won six medals at the 1984 Olympic games, Li Ning pioneered the sports market in China, positioning itself as a high-quality, homegrown alternative to global names such as Nike, Adidas and Reebok. Company executives frequently boasted that they sold more sneakers in China than Nike.
That record could prove attractive to investors, as Li Ning prepares for an initial public offering in Hong Kong, which is expected to raise as much as US$71 million and begin trading June 28. The company, which is majority-owned by the gymnast and his family members, is a play on China's fast-growing middle class; it could also benefit from a growing focus on sports in the lead up to Beijing's hosting of the 2008 Olympic games.
"They are growing fast and have developed a good local brand," says Chris Ruffle, director of the China investment team for Martin Currie Investment Management, which manages $1 billion in various China funds. Mr. Ruffle says he was impressed in recent meetings with the company's management and is subscribing to the offering.
Yet behind the scenes, Li Ning is facing increasingly tough competition on a playing field it has long considered its own. After years of laying the foundations for their China business, Nike and Adidas are now seeing astronomical growth that outstrips that of Li Ning, industry executives say. Already strong in Beijing and Shanghai, Nike and Adidas are now aggressively building up distribution in smaller cities, Li Ning's traditional base. As Chinese urbanites get richer, many who previously couldn't afford foreign brands now can. Among them are youths whom the global brands have cultivated through years of grass-roots marketing, like sponsoring high-school tournaments and building playing fields.
Market-share figures are hard to come by, but Zou Marketing, a Shanghai-based sports-consulting company, estimates that Li Ning ranks third in the industry in terms of sales, after Nike and Adidas, respectively. An executive at Adidas agrees with that ranking; executives at Nike say they hold the top position. Li Ning declined to comment on rankings or market share.
Li Ning "had a great brand and great momentum," says John Stephenson, managing director of Quest Sports, a sports retailer with more than 50 shops in China. "But now that Nike and Adidas have figured out China, [Li Ning] needs to figure out what they're going to do next."
Other successful Chinese brands are confronting similar challenges. Domestic computer maker Lenovo Group, until recently known as Legend Group, has long dominated its field but is now losing business to multinational rivals including Dell. In many cases, multinationals that have gained both experience and scale in China are forcing domestic companies to rethink their strategies to compete.
As the competition heats up for Li Ning, the company's weaknesses are becoming more apparent. Li Ning has long sold itself as a high-quality, but affordable, alternative to the foreign brands, with goods that cost between one-third and one-half less. But people in the industry say it hasn't really built a distinctive identity beyond that. The company has yet to prove it can develop high-tech innovations for professional athletes. An effort to design a shoe for Chinese soccer star Li Tie, who plays in the English Premier League, was called into question when Mr. Li ran off the field and changed his footwear in the middle of a game last year. Zhang Zhiyong, Li Ning's chief executive, says, "Maybe there was a problem with the leather surface on one pair, so he switched to another pair." Mr. Zhang maintains that the shoe switch was to another pair of Li Nings. He adds that members of many sports teams now wear Li Ning brand shoes with no problems.
Li Ning positions its products somewhere between sports and leisure, an awkward middle ground that may confuse consumers, people in the industry say.
The appeal of the name of company founder Li Ning, whose Olympics triumph is now two decades old, is fading among consumers, particularly in the key youth market. While Nike, Adidas and Reebok sponsor and promote a stable of celebrity athletes both foreign and, increasingly, Chinese, Li Ning has traditionally sponsored Chinese national teams in areas such as diving and gymnastics. China dominates these sports, but its athletes don't appeal to youths who idolize the high-octane stars of the U.S. National Basketball Association and the English Premier League. Li Ning plays up its Chinese roots -- a current ad campaign promotes its shoes as "More Suited to the Foot Shape of the Chinese People" -- but such appeals can seem dated to a younger audience.
"The kids look at what the companies tell them to look at. If the company says look at LeBron James, they look at LeBron James," says Rick Wang, CEO of RetailCo, a Shanghai-based sports retailer and consulting concern, referring to the rookie basketball star signed by Nike. "They don't care if it's a national brand or what."
Mr. Zhang, Li Ning's CEO, concedes that the company started to focus strongly on branding only two years ago. Since then, he says, it has placed a much stronger focus on pushing basketball and soccer, including a promotion of soccer shoes beginning this year. The company also has started reaching out to younger fans by sponsoring Chinese basketball players and a college basketball tournament set to start in September. Beginning at the end of last year, it has started doing basic research, building a database of foot shapes and analysis of sports moves in its bid to identify the ideal materials and structure of sport shoes.
国内优势渐失 李宁踏足股市
中国最知名的一个品牌即将踏入国际金融市场，而此时它在国内市场的竞争优势正在渐渐丧失。
多年来，运动服和运动鞋生产商李宁公司(Li Ning)一直被认为是为数不多的几家成功塑造了自身品牌的中国公司之一。该公司成立于1989年，创始人就是曾在1984年奥运会上获得六块金牌的中国体操名将李宁，目前公司的大部分股权都由他及其家人持有。该公司是中国体育用品市场的先行者，它将自身定位为可与耐克(Nike)、阿迪达斯(Adidas)和锐步(Reebok)等全球品牌相媲美的高品质本土品牌。该公司管理人士常常自豪地表示，他们在中国销售的运动鞋数量比耐克多。
这一记录也许会吸引投资者的眼球。李宁公司准备在香港进行首次公开募股，预计筹资7,100万美元，于6月28日上市交易。该公司的目标消费群体是中国快速增长的中产阶层，而且由于北京赢得了2008年奥运会的主办权，人们对运动越来越关注，这也会使李宁公司受益。
Martin Currie Investment Management的中国投资小组主管克里斯?拉弗尔(Chris Ruffle)说，李宁公司发展迅速，已经成功开发出一个良好的本地品牌。他表示，最近与该公司管理层的会面给他留下深刻印象，他准备认购这只新股。Martin Currie管理著多只中国基金的10亿美元资产。
但是，在风光的背后还应当看到，李宁公司正在它长期称霸的舞台上面临日趋严峻的竞争。业内管理人士表示，在经过多年的铺垫之后，耐克和阿迪达斯目前在中国市场正呈现出超过李宁公司的惊人增长。除了保持在北京和上海的强有力地位外，这两家公司还在较小的城市积极开拓分销网络，而这部分市场是李宁公司传统的销售基地。随著中国城市人口变得越来越富裕，许多以前买不起外国品牌的消费者现在有了这样的实力，其中不乏年轻人。全球品牌经过多年不懈的营销，通过赞助高中体育比赛和修建运动场等行动，已在中国年轻人中培养出了自己的消费群体。
具体的市场占有率数字无从获得。但是，上海体育咨询公司前锐公司(Zou Marketing)估计，从销售额来看，李宁公司处于行业第三位，屈居耐克和阿迪达斯之后。阿迪达斯的一位管理人士对这一排名表示认同；耐克的管理人士称，他们占据榜首地位。李宁公司拒绝对排名或市场占有率情况发表评论。
跨世体育用品公司(Quest Sports)的董事总经理约翰?史蒂芬森(John Stephenson)说，李宁公司拥有良好的品牌和强劲的发展态势。但是如今耐克和阿迪达斯都已经在中国站稳了脚跟，李宁公司需要考虑下一步应该怎样做。跨世体育用品公司是一家体育用品零售商，主要从事耐克、阿迪达斯、锐步等世界著名体育品牌的代理经营，在中国开设有50多家店铺。
其他成功的中国品牌也正在遭遇类似挑战。中国的电脑生产商联想集团(Lenovo Group)一直在国内市场居主导地位，但如今却正在遭到戴尔(Dell)等跨国对手的冲击。许多情况下，在中国市场占据经验和规模优势的跨国企业开始促使国内公司重新考虑它们的竞争战略。
随著竞争的加剧，李宁公司的弱势正变得日渐突出。长期以来，该公司一直自诩为可为大众接受的高品质本土品牌，产品价格是外国品牌的三分之二或二分之一。但是，业内人士称，除了价格之外，该公司并没有真正树立起一个独树一帜的形象，也尚未证明自己有能力为专业运动员开发出高科技的创新产品。
李宁公司专为现在英超埃佛顿队效力的中国足球明星李铁设计了运动鞋，但是李铁在去年一场比赛的中途换掉了鞋子。李宁公司总裁张志勇表示，也许是一双鞋的皮面出了问题，所以他换上了另外一双。他坚持说，李铁换上的另一双鞋也是李宁牌的。他还补充说，许多运动队的队员目前都穿李宁牌的鞋子，没有出现什么问题。
业内人士说，李宁公司将产品定位于运动和休闲之间，这一模棱两可的中间区域可能令消费者无所适从。
公司创始人李宁的光环正在人们心中渐渐褪色，尤其是那些已成为体育用品主要消费群的年轻人。在耐克、阿迪达斯和锐步不断赞助和宣传国外及越来越多的国内著名运动员之际，李宁公司一直致力于对跳水、体操等项目的中国国家队进行赞助。诚然，中国在这些项目中独占鳌头，但是它的运动员对当下崇拜美国NBA和英超明星的年轻人来说没有吸引力。李宁大事宣传其中国根基，当前的广告策略称其运动鞋“更适合中国人的脚形”，但是这类诉求点对更年轻的受众来说似乎过于陈旧了。
上海体育用品零售和咨询企业RetailCo的总经理王燮祖(Rick Wang)说，时下年轻人只关注商家要他们关注的东西，如果商家说要关注勒布朗?詹姆斯(LeBron James)，他们就关注詹姆斯。他们并不在意购买的是否为本国品牌产品。詹姆斯是与耐克签约的篮球新星。
李宁公司总裁张志勇承认，公司是在两年前才开始大力致力于品牌建设的，此后它在推进篮球和足球发展方面投入了更大的精力，包括从今年开始推广足球鞋。该公司还开始赞助中国篮球运动员和一个定于9月举行的大学篮球赛，将目光投向更年轻的球迷。从去年年底开始，李宁公司已著手进行基础研究，建立了一个脚形和运动分析的数据库，以找出运动鞋的理想材料和结构。
