Reorganization Of Sales Channels Lining Launched "Winter Defense War"

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After the Li Ning Co sent the above news, a number of agencies expressed their attitude toward Lining, which subsequently led to a continuous fall in Lining's share price, and the total value of the two trading days evaporated 4 billion 500 million Hong Kong dollars.

In response to the reaction of the capital market, Li Ning Co spokesman said, "share price performance is the behavior of the market, and we will continue to do business well."

Channel difficulty

But the disappointment of the market has also made Li Ning Co reconsider its traditional distribution channels.

Li Ning Co spokesman said Li Ning Co currently has 129 distributors and more than 2000 distributors.

Most distributors are relatively small in scale and operate 2 stores on average.

In fact, more than 1700 distributors operate only 1 stores.

Behind this "small and scattered" distribution team, it is uneven management capabilities.

"We note that most retailers' retail management capabilities, procurement capabilities and product lifecycle management are relatively weak, resulting in their single store efficiency and operating margin are not ideal, and they lack the scale effect of the number of stores."

The spokesman said.

In addition, with the rapid change of the sporting goods market and the continuous urbanization of the country, sports products are becoming consumption upgrading, and there is a higher level of demand for products and brands.

At the same time, distributors and distributors are facing the pressure of rapid cost rise, especially labor costs and rent increases.

For the decline in the number of orders, industry veteran Wang Yiming said, "unlike Anta sports and other competitors, Lining has been stuck in the past few years in the integration of channels, making Lining as a relatively old brand, with multiple brand agent agents, there is not much room for improving sales volume."

"Winter defense"

Faced with the current situation, Li Ningzheng launched a "winter defense war".

"The key to future development is to increase the efficiency of existing stores," Li Ning Co spokesman said. "We should face up to problems early and take the initiative to reform their distribution system, including integrating low efficiency distributors, improving store structure, enhancing product lifecycle management, and increasing discount rates to dealers. The aim is to solve the challenges faced by the retail sector."

In fact, Li Ning Co has launched a reform measure aimed at improving channel efficiency.

The important thing is, "through the acquisition of more efficient distributors or distributors who want further development, we will also encourage large dealers to increase the number of direct outlets."

It is understood that Li Ning Co will integrate more than 2000 distributors in the future, and 500-600 distributors will be eliminated from Lining's distribution system.