Brand Shoes Enterprises Lining Change Bid (2)

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The most intuitive explanation for the reshaping of Lining's brand is that it hopes to enhance the positioning of Lining's brand.

Before that, China's sporting goods market has formed such a brand structure: Nike, Adidas, Lining, Anta, XTEP.

Lining is understood as a "sandwich layer" between the high end and the low end.

That is to say, Lining will compete with Nike and Adidas and compete with Anta.

Li Ning Co CEO Zhang Zhiyong said that the price of Lining's products is about 20% to 30% lower than that of the international first-line sports brands, which is about 35% to 40% higher than its domestic brands.

Lining hoped that the situation could be changed.

Li Ning Co said publicly that after the brand was rebuilt, the Lining brand will be launched in the first tier cities and compete with Nike and other international brands.

Including the upgraded version of the new image store, will be concentrated in the first tier cities.

The reality is that whether Lining, Anta, PEAK or 361 degrees, more than 70% of their stores are distributed on two or three lines.

One of Lining's top initiatives is to adjust the price structure of products.

Li Ning Co COO Guo Jianxin said that in Beijing, Shanghai, Guangzhou and other first tier cities, the proportion of high-end products in Lining stores will increase, while in the four tier cities, the proportion of low-end products will be increased.

Guo Jianxin disclosed that in the fourth quarter of this year's order meeting, the average unit price of Lining's shoes increased by 7%, and clothing rose by more than 10%.

This is the change brought about by Li Ning Co's conscious upgrading of the structure of the medium and high priced products.

In the international market expansion, Li Ning Co has taken Southeast Asia, Europe and the United States as the first target market.

In Singapore and the United States, Lining has launched the flagship store.

Li Ning Co CPO (chief product officer) Xu Maochun introduced that in the Southeast Asian market, Li Ning Co will mainly promote badminton sporting goods, while in the United States, it hopes to promote basketball products.

In fact, such internationalization means more intense competition.

For example, in the field of basketball sports goods in the United States, Nike has become the absolute dominant market.

Sports resources (contract athletes and sports teams) are positively related to the premium of sports brands, but in the United States, Nike basically monopolizes NBA's star resources.

At present, the main sports resources of Li Ning Co are in China, and China does not have absolute advantage in sports, such as soccer, basketball, tennis and golf.

All of these make Lining's brand premium capability difficult to deal with Nike in the near future.

How did Lining persuade the channel and persuade the consumers in the overseas market? Zhang Zhiyong didn't give a positive answer. He revealed that the globalization of Li Ning Co's design was divided into three steps. Now it has completed the use of international resources and the establishment of a global system. What's next is the localization of the organizational structure.

The reconstruction of Li Ning Co's internal management structure has already laid the foreshadowing for internationalization.

In the European and American market, the channel of sports brand is already dominated by sports category. Lining needs to do as the Romans do.

Defense

If Lining is at the top of his mind, what will happen if Nike, Adidas and other international first-line brands choose to sell products with lower prices in the two or three tier cities?

This is one of the problems that Lining has put forward in this regard.

As a result, the competition between the two or three line market and even the county-level market is bound to be more intense.

In county-level cities such as Zhangping, Fujian, Nike stores already exist.

For Li Ning Co, how to sink the channel to the three or four tier city is also a challenge.

Born in the second tier city, Fujian Jinjiang company is more familiar with the operation of China's two or three tier cities and is better at using promotional mix to attract price sensitive consumers in such markets.

Over the past three years, companies such as Anta, XTEP and PEAK have been listed. With the help of capital market, they have accelerated the pace of opening stores in two or three cities.

In the third and fourth quarter of 2009 and the first quarter of this year, Li Ning Co's product discount rate was 22%, 20%, 21%, while Anta maintained or was lower than 20%.

Zhang Zhiyong disclosed that in the past, the lowest discount Li Ning Co gave to the channel was 50 percent off, and then it would gradually increase their discount, such as 51% off and 52% off.