Lining Tries To Enter The US Market By Testing Water E-Commerce

At the same time, in the domestic layoffs, Li Ning Co (02331.HK) take a step toward the US market - try to reduce the cost of physical stores by electronic commerce, and set up a new understanding of Chinese sports brands among American consumers.

"If TOYOTA Japan entered the us through more distributors in 70s, it would never become the world's largest auto company." In a recent interview with Caixin reporter, digital Lining CEO Lu Guangming said that Lining would like to use this unique way to set up a successful sample for "going out" Chinese enterprises.

Lining's ambition came from early 2011. From the new strategy of the United States to the implementation of the strategy, it took less than a year. In December 2011, digital Lining and its website came out in the US. This new business was jointly established by Lining and Acquity, Chicago digital consulting company.

Acquity chief executive Dalton (Christopher Dalton) told reporters that both sides held 50% stake in the cooperation and the initial investment was $10 million.

Ning Yun Li move The brand began to target the US market in 2007. At that time, Lining set up a global design center in Portland, Oregon. Two years later, it was also in Portland, where Lining set up a product exhibition hall.

However, Lining made a profit of 294 million yuan in the first half of 2011, down nearly 50% compared with the same period last year, and his income also dropped by 5% to 4 billion 300 million yuan. In Hongkong, the stock price of the rare mainland sporting goods listed company has dropped by 63%.

It seems strange to continue expanding outwards at this time. But Lu Guangming believes that the loss of Lining in China is just a small incident in the process of market integration. At this time, expansion will not have any impact on Lining.

Lu Guangming believes that the global retail industry will soon be restructured, and digitization will be an inevitable trend. "In the next 8 to 10 years, 1/3 of all retail transactions in the United States will be realized on the Internet." He said.

A recent report released by the US Internet Statistics and market research firm comScore (NASDAQ: SCOR) showed that online shopping in the US spent $161 billion 500 million in 2011, an increase of 13% over the same period last year.

However, there are still controversies in the industry about whether products that rely on user experience, such as footwear and clothing, can be operated through online sales. The total sales volume of online sales of Nike and Adidas is less than US $400 million a year.

"Before deciding to buy a sports brand, consumers need to have a perceptual knowledge of the product through touch and try on," said Zhao Xiwen, senior analyst at the international research department of Hongkong XinDa. "But for Lining, it is very risky to continue expanding the US business in the face of the difficulties in China's domestic operation."

For this, two executives of digital Lining, CEO Dalton and marketing director Alvin (Tim Irvine) also admitted that such concerns were true. But in the process of implementation, they are trying to find another way to make up for the disadvantages of online sales.

"For example, in the future, we will appear more in the NBA all star game, and interact with fans fans, making them familiar with Lining products." Alvin said.