Looking At Conway And Lining From Marketing Strategy

Conway is an early bird. If it is compared with Lining, who is striving to internationalize himself, the voice of Conway between the first tier and the second tier of domestic brands is obviously much smaller.

But back to the history of the two brands, Conway, founded in 1986, started earlier than Lining, and was once the champion of the domestic sports brand in the 90s of last century.

Judging from the way of entrepreneurship, Conway and Lining are very similar.

According to Conway's internal staff, Conway founder Li Weiquan and Lining are still quite friendly friends.

Li Weiquan is a basketball player and has served as a coach of the Guangdong basketball team.

At the height of his career, Li Weiquan gave up his career in sports and became an agent for Nike, an international sporting goods brand. Then he founded his own brand, Conway.

Before the 90s of last century, the Chinese market has always been a market that needs more than supply.

The sporting goods industry has not yet been formed, and the concept of brand building is still rare. The quality of products in the market is unstable.

The emergence of competitors was the creation of Lining in 1990.

But in the first few years of Lining's establishment, he did not pose a great threat to Conway.

The wide market opportunities during that period determined that no matter whether Conway, Lining or most of China's private enterprises, the company's clear development strategy, vision and clear positioning did not seem to be too important. "At that time, only the famous Chinese sporting goods brands were Adidas and Nike, but only Conway and Lining."

Kang Wei, deputy director of Conway brand promotion, said in an interview with our reporter.

Lining later came to occupy the watershed of Lining from the late 90s of last century.

The emergence of new brands, the intensification of market competition, and the upgrading of consumer demand, if the sporting goods industry has not yet been formed, then suddenly grew from a newborn baby to a big child who would run and jump in 2000.

The market reaction is lagging behind, which is a fatal injury to Conway's loss of antecedent advantage.

With the increasing consumption demand, the market competition has evolved from the original overall competition to the diversified competition of sports apparel, sports shoes, sports equipment, outdoor sports equipment, and so on. Subsequently, there are further product subdivisions, such as sportswear, which is divided into professional sportswear, sportswear and clothing, or even further divided into vest, sweater, single trousers, etc.

Subdivision products are segmented according to different market segments and different processes and styles. This has attracted the competition of brands from all over the world.

On the other hand, consumers' demand for sports products has shifted from the previous movement to daily sports and work life.

Before and after 2000, a large number of imitation small companies emerged in Guangdong, which immediately impacted Conway and Lining's products.

Faced with the upheaval of the market, Conway and Lining adopted two totally different attitudes.

Lining is thinking about what sports brand is.

In 2001, Lining started a series of reforms to organize organizations that match brands: including professional managers outside the company, forming a team of professional managers from Procter & Gamble, Coca-Cola, DuPont, Nike and other international companies.

Through extensive interviews and surveys, Li Ning Co follows Nike's strategy to describe Lining brand as "young", "friendly", "positive", "dynamic", and "made in China", aiming at a series of actions for young consumer groups.

At the same time, Conway was still bound by empiricism and did not realize that the market and rivals had undergone tremendous changes.

Due to the lags of the market reaction, besides the main product clothing will face more intense competition, the development of Conway's footwear and other categories of products has lagged behind.

Conservative strategy leads to another difference between Kang Wei's character and Lining's character, which is reflected in the use of funds by the two enterprises.

Both now and before, Conway is "very rich".

Unlike Anta and other rising stars, Conway and Lining both have a history of about 20 years. They are developed step by step. Cash flow and reserves of their own funds are very abundant.

For many years, Conway has basically developed on its own capital, with little financing and no debt. This shows that Conway's "foundation" is very thick, but it also highlights its relative conservatism over the past few years.

In this regard, Li Wei has said that "Conway has always been known for its stability, and never advocated the use of unconventional gambling risks to maximize the effectiveness of enterprises".

In the explosive growth of industries and the time when competitors seize time, too conservative and conservative development will miss the opportunity.

One of the prerequisites for Lining's false start is that his identity and promotion strategy have been widely publicized.

In the minds of the main consumers in the 90s of last century, "Lining" is more than just a brand name. He is a "gymnastic Prince" who carries the dream of a generation of powerful nations. He has won 106 gold medals and has been selected as one of the 25 greatest athletes in twentieth Century, and is tied side by side with Jordan and Bailey.

At the beginning, the name of Lining was used to make the company and the brand name, and Lining's high profile character could be seen. The rapid rise of the clothing sponsorship right with the help of the Beijing Asian Games and the Barcelona Olympic Games reflected his passion for publicity and promotion.

Of course, after 2000, the impact of Lining's name on the new generation of young people has been weakening. At this time, bold financing and massive brand building input have made Lining fast again.

From Lining's financial report, we can see that after 2000, Lining's annual investment in advertising and marketing costs accounted for 15%-17% of the total turnover. The investment in research and development accounted for 3.5%-4%. of the cost of sales, with the turnover of 3 billion 180 million yuan in 2006, and the calculation of advertising cost accounting for 16.4% of turnover. Lining spent about 520 million yuan on advertising and marketing expenses in 2006.

In 2006, Conway, whose sales volume exceeded 1 billion yuan, invested tens of millions of dollars in advertising, accounting for less than 5% of the total turnover.

Successful financing helped Lining leap. Although Lining had no shortage of funds in his development as well as Conway, he adopted a different strategy to improve the company's management capabilities and facilitate the listing in Hongkong. In January 2003, Government Investment Company SGIC of Singapore and CDHChinaFund of China International Finance Corporation entered Li Ning Co and entered the board of directors, holding 19.9% and 4.6% of Li Ning Co shares respectively.

Lining entered the company through the introduction of two strategic partners. The most important thing is to introduce the advanced management concepts of these two companies to the company.

This strategy of "killing two birds with one stone" has effectively solved the management problems in the development of a company, which is often unexpected or impossible for many other private enterprises.

In June 2004, Lining successfully listed on the main board of Hongkong, raising more than HK $430 million. The price earnings ratio determined by the company is 17.6 times that of Hongkong's casual wear listed company Giordano, which is 14.5 times higher than that of the international brand Adidas and 12.9 times that of Reebok.

Similarly, enterprises that have developed for more than 10 years also have plenty of their own funds. But Lining chose not to explore conservatively, but to actively raise funds and invest large sums of money in the promotion so as to achieve explosive growth.

This not only made it the first IPO sporting goods company in China, but the number of stores nationwide has reached more than 2000 before the listing in 2004, which is even higher than that of Conway today.

At present, the number of chain stores in Lining has exceeded 4000, which is more than two times that of Conway.

Conway's bitter experience with the international sporting goods brand entered the Chinese market, and the listing of Hongkong jumped across the board. Lining has completely thrown away Conway and other competitors. He is regarded as the only Chinese sporting goods brand that can compete with Adidas, Nike and other international giants for a day.

According to SGI, the US authoritative research institute, according to the market value of the 93 sporting goods listed companies in the world, Lining ranked first in the top five of the world's similar enterprises for the first time, and the market value is only after the four major international brands of Nike, Adidas, Puma and AI Shi Ke.

Whether or not he is willing to be present, Conway has to admit that Lining and Conway are not at the same level of competition.

From the market position, Kang Weizheng is in the first tier (Adidas, Nike, Lining, etc.) and the second tier (Anta, 361 degrees, etc.).

That is to say, Lining has locked his competitors into Adidas and Nike, while Conway's rivals are Lining and Anta.

However, although once lost the opportunity to be followed by competitors, but Conway's recent moves and planning can be seen that Conway has a great deal of pain, with the Olympic business opportunities to re force to catch up with Lining's ambition.

In the eyes of Conway people, they also have large capital and space for growth, and Lining's development defects also give Conway a chance to catch up.