From Caixin:

On May 24, Li Ning announced the resignations of three senior executives – COO Guo Jianxin, Chief Marketing Officer Fang Shiwei, and Director of E-commerce Lin Li. A source blamed the exodus on the failed campaign.

That same day, Li Ning’s Hong Kong-listed shares declined 8.4 percent. The stock has continued losing ground ever since, falling to HK$ 13.38 on June 9, far below the past year’s peak of HK$ 29.35. The company’s market capitalization has declined more than HK$ 16.8 billion.

Third-quarter shoe and apparel orders fell 17 percent from a year earlier, and 6 percent from the previous quarter, the company said in April.

Li Ning managed to report a 1.1 billion yuan net profit for 2010. But it was badly beaten in the earnings race by major rival Anta Sports Products, which registered a 1.5 billion yuan net profit last year.

While Li Ning  trying to raise its profile in the North American market, companies like Anta, Peak and 361 Degrees have been catching up domestically in 2nd- and 3rd-tier cities. According to the Caixin piece, three main reasons contribute to Li Ning’s recent loss:

• Focusing too much on upscale professional sportswear and less on leisure-wears
• Closing of small dealerships in consolidation of sales channels
• A lack of production factories

The company's new logo announced last year

Li Ning has been found inconsistent in its business strategy and branding. “Sometimes it wants to get international, sometimes fashion and then sporty. Nobody can really tell what the brand has been trying to deliver all these years. It’s caught in the middle of the industry,” said someone close to the Li Ning management earlier this month to Jiangsu Business News (江苏商报).

With the “make the change” campaign launched last June, Li Ning turned its focus to more high-end product lineup and younger consumers, which have not been received well by the market. As a Beijing dealer quoted in the Caixin piece, people can afford Li Ning would simply “buy a top brand with a little more money.”

Links and sources:

• Caixin - Li Ning Loses Way after Wrong Business Turn
• Jiangsu Business News - Li Ning “capricious” facing the competition (Chinese)
• Time – Can China’s Big Shoe Brand Make Tracks in the U.S.?

Previously:

• Li Ning to Open First Store in the US
• Li Ning Signs 5-year Deal with Yelena Isinbayeva

In the video, Harvey Davis, vice president at ESPN’s Events Management Group, reckons that “these [action] sports are now recognized in China as real sports, with real committees and real organizations reporting up to the top government organizations in Beijing” and concluded that as “one of the biggest things for the growth of sport in China.” With that comes, as in the case of Shanghainese BMX rider Shen Jian and his friends, a clash of interest between government organization and athletes/brands.

China has definitely been picking up actions sports in the past five years. But just because promoters established ties with the government, doesn’t mean the sports become mainstream in the country. And I think part of the image of the sports, as manifested in tattoos and piercings for most of the athletes, may be the main reason why Chinese parents would not want their children to practice in it.

In the Shen Jian story, we had a chance to talk with Chen Jie, CEO of SMP Skate Park in Shanghai. The world largest skate-park now has about 2,000 members and over ninety percent of them, according to Mr.Chen, are foreigners.

“It looks now we’re turning into a club catering exclusively to foreigners,” said Chen. “Some wealthy Chinese send their kids here to play only because they want their children to be more international, as the children could speak English with kids from other countries in the park.”

“They focus on language exchange, not the sports themselves, which again turned practitioners of extreme sports into a minority group.” Chen is cutting down on the ticket prices this June in hopes of bringing more local kids in, but he opines the results might not be fruitful.

Also in the video, PT Black commentates on sports participation in the country and why Chinese are more likely to watch than actually play sports.

Part of the reason, PT noted, comes from “a legacy of centralized sports planning” which “takes all the kids who’re good at sports out of the mainstream school system, therefore depriving their classmates of the chance to actually play with the good kids.”

Parents are the “biggest obstacle” and another reason to the lack of participation in PT’s opinion. “When the exam system is so important, parents look at any moment dedicated to sports as a moment that should have been spend studying.”

Any other reasons? This is actually what we look forward to finding out at Sports Illustrated China as the magazine is rolling out a cover feature on the topic. So more later on this.

It’s official…….Come visit the first Li-Ning retail store in Portland on 1/4! We will be open Monday-Saturday from 10am-6pm. E-commerce is coming soon at www.li-ningusa.com

Li Ning opened a design office in Nike’s backyard, Portland, Oregon, last January, but has yet to sell any products to Americans so far. The company opened a badminton flagship store in Singapore this July and earlier this month, a badminton store in Tsim Sha Tsui, Hong Kong.

Previously:

• Li Ning Signs 5-year Deal with Yelena Isinbayeva

Links and Sources:

• Oregon Live: Li Ning to Open in the Pearl
• BusinessWeek: China’s Li Ning Toe-to-Toe Ag
• China Daily: Li-Ning opens flagship store in Singapore

Yelena Isinbayeva set a new pole vault world record of 5.05 meters at the Beijing Olympic Games, and the 26-year-old told press earlier that she wanted to clear 5.20 meters by the end of her career. Yelena started Pole Vault with Evgenii Vasilievich Trofimov in 1997 and ended in November 2005. She’s now coached by Vitalii Afanasievich Petrov.

Li Ning is markedly in seek of a change in their branding route with the latest high-profile signing, especially after Anta, its Chinese competitor, sealed a deal with Jelena Jankovic, the top ranked female tennis player this January. Li Ning signed NBA player Baron Davis last November, a confusing branding move to us. The company’s president, former Olympic champion Li Ning, labeled by Chinese as the “Prince of Gymnastics”,  ignited the cauldron at the Beijing Olympic Games’ opening ceremony.

About Li Ning Company Limited:

Li Ning was established in 1990. The company now has endorsement deals with Shaquille O’Neal, Ivan Ljubicic and Tolossa, and is official partners of Spanish Olympic Committee, Spanish Basketball Association, Sweden Olympic Committee, Argentine Basketball Association and US Table Tennis.

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The new CSL season will be kicked off on March 21, with Shanghai Shenhua, Shandong Luneng and Beijing Guoan are among the favorites. While the defending champion Shandon Luneng lost their midfield general Zhou Haibin to PSV Eindhoven, Shanghai Shenhua spent over $ 8 ml USD in the transfer market this winter, snatching Mark Milligan from Newcastle United Jets in Australia’s A-League and another two players from FC MTZ-RIPO, a team in Belarusian Premier League. The Beijing Guo’an FC, or Imperial Guard, received a RMB 20 million yuan (roughly $ 2.92 million USD) boost from Beijing Municipal Bureau of Sport (BMBS) this January, and Li Weimiao, head of the Beijing Municipal Football Administrative Center, the football governing body under BMBS, became vice president of Guo’an Club.

There’s been rumors that the decision makers at General Administration of Sport in China (GASC) has been discussing whether to nationalize Chinese football by getting back clubs’ ownerships. “This could be the first step of GASC’s nationalization plan,” said Nan Fang, a former Beijing Guo’an midfielder to China Sports Review, “If they do it, they’re probably going to cross the river by feeling the stones.” Nan, co-founder and coach of Beijing Langyue Football School, attributes the futility of Chinese football to bad environment, namely fixed games and bribes in the league. “You can’t whiz everything back into the 80s. Things changed.” Aside from help fund a friendly match with world champion club Manchester Utd, BMBS will also help Guo’an develop youth players in the government-funded sports schools. “This would bring more young talents into the pool,” Nan noted. “I think the problem is whether they have enough good coaches there.”

China’s FA is currently in talks with Nike for a sponsorship deal. The sportswear manufacturer is reportedly to have prepared a 10-year-long contract for the clubs, with each club in the 2009 season could get equipments worth of RMB 5 ml and another RMB 1.5 ml fund. A lot money for some, the deal might not sound very riveting to big clubs like Beijing Guo’an, who is currently sponsored by Adidas.

Previously:

• Chinese to Enjoy English Premier League for Free?
• Go West! Chinese Footballers Now Can Transfer, Finally
• China May Juguo Its Professional Football League
  

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ANTA Sports Products Limited, the Fujian-based Chinese sportswear maker, signed a deal on Jan 18 with the top ranked female tennis player “JJ” Jelena Jankovic. The historic deal clearly marks the company’s ambition to go global, a very good branding move especially compared with Li Ning, who last year signed a two-year contract with the third-tier NBA player Damon Jones, the then Cleveland Cavaliers’ guard now playing for Milwaukee Bucks.

Jelena previously collaborated with Reebok before penned the deal with the Chinese company. Famous for her explosive forehands and powerful straight backhands, the Serb had a taste in No.1 for WTA on 11 August, 2008. With a record of 65 wins and 19 losses in the season of 2008, Jelena is the 18th WTA tennis player who ranked the first in women’s single, and she has become world No. 1 women’s tennis player since 6 October, 2008.

“The recent success of the Beijing Olympics has firmly established China’s reputation as a world power in sport. I feel very honored to be forming a partnership with the leading Chinese sports brand ANTA. I am delighted with the JJ range of products we have developed and I look forward to working with ANTA to promote the development of tennis and the ANTA brand world-wide,” Jelena said to the AFP.

Under the contract,  ANTA Sports will work with top designers from the US and Japan to tailor-make a range of professional sportswear and apparel for Jelena. In addition, the company will be launching a series of products including footwear, apparel and accessories named as “Jelena Jankovic series”. Jelena will be wearing ANTA gear in the Australian Open 2009, from Jan 19 to Feb 1.

About ANTA Sports Products Limited:

As one of the leading branded sportswear enterprises in China, ANTA Sports Products Limited primarily designs, develops, manufactures and markets sportswear, including sports footwear, apparel and accessory. The Group has established extensive distribution network and nationwide retail outlets in China under the management of the distributors.

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