Lining Brand Reinventing &Nbsp; Distributors Are Voting With Feet.

As China's most powerful sports brand,

To this dream, in 2010, Li Ning Co decided to make changes - brand remolding, just like its new slogan called "makethechange" (let change happen).

For Li Ning Co's trader Zhang Zhiyong, his task is to ensure that Li Ning Co will not lose its way in the process of reaching the end point.

Zhang Zhiyong repeatedly stressed that

With the obvious change of Chinese consumers' buying habits, perhaps for Zhang Zhiyong's Li Ning Co management team, the first thing to win is to win time before winning the desired customers.

awkward

Before that, the life of Li Ning Co was very comfortable.

In 1990, Li Ning Co was born in a hardly competitive environment.

Relying on the natural growth of the market for a long time, slowly expanding the scale, and fortunately become the domestic brand leader.

By 2009, Li Ning Co's turnover in mainland China finally surpassed Adidas, becoming the second largest sports brand after Nike. Although this time exceeded some luck, Adidas's performance declined in 2009 due to the implementation of big organizational change.

Zhang Zhiyong recalled that at first, Lining was actually relying on the market's natural growth to get "

However, such a day is gone forever.

The era of high growth of China's sporting goods has ended and is moving towards a period of adjustment.

From 2008 and 2009, the industry's average growth rate is over 30%, and now it is less than 10%. The industry will go through the new round of growth.

The demand for Chinese consumers is also fission.

Zhang Zhiyong noticed a phenomenon that all the people who went shopping in Hongkong were in Beijing, Shanghai, Guangzhou and Shenzhen, and now the two or three line cities are crowded there.

At the same time, in China's more than 600 two or three tier cities, similar to Nike, ADI, such a relatively high brand, its market share is not low.

"The biggest challenge for Chinese enterprises now is not the problem of making money, but whether you have the ability to provide the people with the ability to pay, to provide good products and good brands that they want, and how to catch up with the upgrading of consumption."

Zhang Zhiyong said.

Let Lining, including Zhang Zhiyong, be distressed by the fact that Li Ning Co has been working for so many years, but few consumers can tell clearly what Lining's brand personality is.

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Who is Lining? What does Lining represent?

In fact, this is not a unique problem of Li Ning Co.

At present, China's sporting goods companies almost have no definite definition of "brand", including the consumers, the brand's personality, what the functional characteristics are, what kind of sports products they want to make, how to clearly describe the brand personalities in products and services, and how to plate the "brand personality" into the creativity in the air at the executive level. There are few systematic thinking and solutions.

From the perspective of competition, Lining's current situation is not optimistic.

Compared with the Jinjiang brand, Lining does not have the competitive advantage of industrial clusters. The cluster brings about the reduction of costs and the optimization of resources.

In the layout of the channel, Lining is also very embarrassed.

The high-end consumer group is mainly concentrated in the first and second tier cities, and the high-end market of these cities has been occupied by international brands such as Adidas and Nike, while the three or four tier market is dominated by Jinjiang brand.

Lining seems to be "too tall or too low".

In fact, Li Ning Co management team, including Zhang Zhiyong, has been hoping to get rid of this embarrassment.

After 2000, Li Ning Co made the first choice: to march into the professional field.

Trying to emulate the international brand sponsorship mode and establish professional characteristics, Li Ning Co has sponsored almost all kinds of sports and many teams at home and abroad.

In 2002, Li Ning Co established a new brand positioning: Lining, anything is possible.

Prior to this, Lining's brand positioning advertising language used "China's new generation of hope", "leaving the wonderful to myself", "I exercise, I exist", "the beauty of sports sharing the world", "excellent, from the natural color" and so on.

Zhang Qing, who has served in Lining and now is the president of sports consultancy company, said that the possibility of "everything is possible" has been sparked by fierce debate within the Li Ning Co. The reason for the final success is that the road that China is taking and going is fully proved what is "everything is possible", which is also in line with the real spirit of sports.

However, for most Chinese who rarely exercise, sportswear is often used as a casual wear. Lining's professional evolution is somewhat unattractive.

Moreover, the sponsorship campaign is too complex to establish a strong association between Nike and basketball, Adidas and soccer, and the brand image of Li Ning Co is still very unclear.

Choice

In the front and rear of the market, Lining again sought a new position.

In June 30, 2010, Lining announced the change of LOGO and brand remolding, playing the positioning of "Lining, 90".

Its advertising style is quite different.

Spokesperson Lin Dan said in the new advertisement, "I do not like to be unconventional, but I do not agree with the same thing". Ordinary young people say, "don't always compare me to others, I just want to compete with myself inch by inch", "the way you arranged for me always makes me lose my way."

In order to attract young people from 18 to 30 years old to enter the store, Li Ning Co needs to change its face instead of using the honor and struggle to arouse the resonance of the forty or fifty year old middle-aged people.

In the view of Li Ning Co management team, young people will become the consumers of Chinese sporting goods market.

Previously, Zhang Zhiyong led the Li Ning Co management team to make an analysis. China's sporting goods market, in the past 35 years, will be divided into two directions: the basic market is targeted at price consumers, and the brand market is targeted at value consumers.

Price consumers attach great importance to the actual function of products. The core driving force of their business mode lies in vertical integration of value. The supply chain is short and the supply speed is fast. It is not based on high margin, but on the speed of capital pfer.

Besides the actual function, value consumers also value their feelings. Their business mode is to build the brand's premium capability, including the accumulation of cultural connotation of the brand.

There is another important background for Li Ning Co to reshape its brand again: the new situation faced by Chinese traditional manufacturing industry: after 2009, the cost of Chinese manufacturing enterprises in the whole product value has changed significantly, and manufacturing industry has already played a prelude to the "demographic dividend".

At the end of 2010, when Zhang Zhiyong visited the company's suppliers, he realized that the capacity of the southeastern coastal suppliers had been seriously lost, and the loss of 30%-50% was the largest. Even though wages had gone up, workers could not be recruited.

Moreover, in the next three to five years, the suppliers predict that the labour cost of the factory will rise by 10%-15% every year, in other words, it will double in 5 years.

At the same time, the pressure of distributors is increasing due to the double impact of rising shop costs and slowing sales.

For Li Ning Co, in the choice of business mode, it either insists on making brand, raises the value premium, raises the price, or compresses the supply chain and makes its own direct camp.

Choosing to be a brand operator, Li Ning Co needs to increase labor costs to suppliers and increase the discount point for retailers.

The whole increase cost can be digested by the consumer premium on the retail end, and the brand premium is not achieved in a day. How to grasp this rhythm is a test of Zhang Zhiyong's wisdom.

At this point, the channel characteristics of Li Ning Co in the period of horse race enclosure, to some extent, become the resistance of the company's brand pformation.

According to public information, Li Ning Co now has 129 distributors and more than 2000 distributors.

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

Of these, more than 1700 distributors operate only one store.

These distributors, who only run single stores, have set up Khan horse work for the Li Ning Co in the era of horse racing. They can open a store for about 100000 yuan. The owner himself is also a buyer, display and storehouse commissioner. They help Lining extend his tentacles to areas where the distributors can not reach them, so that they can cover the cities below three at a lower cost.

Now many of their stores are beginning to become handicapped.

Zhang Zhiyong said that individual stores often do not have a detailed division of labor. Most of the bosses have not heard of "display" or "buyer". They will not take the initiative to study buying goods, study the contribution of each wall, and study the allocation of logistics. They do not have revenue planning, nor do they have the tools to analyze consumer groups. In terms of storefront decoration, store display and sales strategy, the boss is not willing to delegate power.

The Li Ning Co decided to win the fittest. 500-600 of the weaker distributors: the most powerful direct acquisition and direct marketing of the 129 major distributors, those who bought less than $70 thousand a month or less than the shops in the surrounding areas, or let the big fish in the brave soldiers eat the small fish, and make a large scale by the better distributors.

Zhang Zhiyong believes that once the integration is completed, the scale efficiency of distributors can also be increased.

If you only do a shop, once the cost increases, the pressure will be great; but with the scale, the ability to bear is different, but with the scale, you need to have professional buyers, logistics and distribution, and retail more specialized.

This is a difficult trade-off, and side effects have emerged: out of uncertainty about the future, many dealers choose to be conservative when they sign the next year order.

In December 2010, Li Ning Co announced the order results of the second quarter of 2011. Considering that Li Ning Co adjusted the wholesale discount rate to dealers in 2011, the order volume decreased by about 6% compared with the same period in 2010.

The results of the above order were released, and Lining's share price fell. During this period, JP Morgan and American capital group sharply reduced Lining shares.

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adventure

The management of Li Ning Co, including Zhang Zhiyong, is still calm, indicating that all these negative effects are expected.

The integration of distributors will have a certain impact on the sales of the company in the short run. Li Ning Co hopes to find value consumers, and the new pricing of the products may be out of step with the current consumer groups; the existing consumers may feel that Lining is different from what he originally wanted, and such consumers may be reduced.

Zhang Zhiyong has always stressed that "the key question is whether we want to make such a change, if we want, we must stick to it".

Nike and ADI's two multinational giants have extended their strength to Lining's most important two or three line positions.

Domestic rivals also covet Lining's market share.

Anta executives have said that sales of the two to four tier cities now account for more than 80% of Anta's total sales. In the next 3 to 5 years, the company's target customers will still be positioned in the middle and lower income level of the Chinese public, which plans to exceed Nike and Adidas share in the Chinese market during this period.

361o, XTEP executives have said that its two or three line, three or four line cities will not slow down the pace of opening shop.

Zhang Zhiyong vowed that his bottom line for Li Ning Co reform risk control is market share.

But the outside world is still worried that the Li Ning Co is facing a serious reality.

Lining hopes to become a pnational brand like Nike and Adidas, but in reality, Li Ning Co is still a domestic brand in the eyes of its target group. The remodeling of the brand is also intertwined with changes in sales channels. Lining may have lost both consumers and dealers.

It takes time to catch up with pnational giants when they infiltrate their base areas, and at the same time, they can not catch up with their local rivals.

It also takes time to persuade the company's investors to stick with themselves.

Because this change is bound to affect the earnings of the company, and it needs a large amount of capital investment. Li Ning Co will turn from a high income period to a big investment period.

Zhang Zhiyong has calculated an account: Lining's brand remolding from the executive point of view, the easiest to carry out is the advertising creativity of every quarter; relatively easy to implement is the product, the product development cycle is 12-18 months, of which the clothing is faster than the new brand positioning; the slowest retail shop update, more than 7000 retail stores, according to the speed of the past, even if it changes to 1000 a year, it will take 6-7 years.

He hopes to "speed up" and complete the upgrading of all retail stores in 5 years.

I wonder if Li Ning Co's stock and investment institutions can be patient enough.