Lining'S Sales Situation Is Not Ideal, And Net Profit Is Declining Year By Year.

In the Olympic year, Lining's situation is much more difficult than that of the Beijing Olympic Games.

In June 12th, the Li Ning Co Ltd announced that its 2012 annual order meeting data showed that the total number of orders has dropped by a high double-digit percentage, and the promotion cost will increase significantly in the next few years. The net profit of the 2012 half year to the end of this year will decline considerably compared to the same period.

Among them, the order amount of shoes products resulted in a low double-digit decline year by year, while the annual decline of clothing products was more than 20%, while the total annual orders in 2012 will have a high double-digit decline.

So far, five mainland listed companies in Hong Kong.

Lining's net profit has dropped to the end of the team.

"In 2012, Lining was a double-digit drop, while Anta sports is the number of units falling, XTEP international and 331 degrees should be the growth of unit number, PEAK sports is better than Lining", a senior sports industry analyst said, "this situation is actually a continuation of Lining's inventory to digest and channel difficulties last year, coupled with the overall impact of the industry, Lining to achieve satisfactory growth level is very difficult."

In June 13th, the Li Ning Co replied to the newspaper: "the overall retail environment of the industry is still a big challenge. Going out of stock is still the primary goal this year. Li Ning Co does not want to add new inventory pressure to the retail side, actively communicate with distributors and control orders.

From the present point of view, the retail side's operation is still not ideal, but the inventory is going on, but the speed may be lower than our original goal. To go stock includes reducing the pressure of new sell-in, including building a clear channel, and continuing to recycle some old stock, and strive to reduce the stock to a reasonable level by the end of this year.

Channel reform

"What Lining urgently needs to do is to stabilize the big channel providers and not let them run away."

In China's clothing industry, the high inventory risk faced by Lining is no longer isolated.

A senior sports industry veteran said that compared with other domestic brands, Lining's problem was exposed earlier and more thoroughly.

In 2011, Lining announced that he threw 300 million yuan.

At that time, brands such as Anta, XTEP, and 31st degree did not have any problems. "These problems were not exposed until the beginning of this year.

That is to say, some brands may also have problems, even bigger than Lining's. But they may be concealed by covert means. "

Lining's exposure of high deposit problems is closely related to its channel mode.

"Lining is basically a channel outsourcing mode, which has a common channel with Nike and Adidas, that is, the suppliers of Lining have both represented Lining and other international brands, which directly led to the weak control of Li Ning Co on the channel.

In contrast, the agents of these competitors in China basically make only one brand, and the channel control power is stronger, "the industry said.

Since then, Li Ning Co has proposed channel change, which is to acquire the sales resources of less profitable customers by large customers, and adjust the channel management with a series of detailed measures.

Some media quoted Lining's news that Lining has about 129 distributors and more than 2000 distributors at present, and the latter has 1700 or so on average, which only operates 1 stores.

According to Lining's assumption, the integration of dealers will be promoted by about five hundred or six hundred per year.

{page_break}

Lining has difficulty in operating the sales channel, and has practical difficulties in running the mouse.

"In the retail sector, Lining can not excessively stimulate big clients to be run by Lining. His company does not have so much cash to do it.

At this stage, what Lining urgently needs to do is to stabilize the big channel providers, not to let them run away, but not to clean the customers in large areas.

The industry insiders bluntly said, "because of the difference in channel mode, the other domestic brands will be slightly better at this stage.

However, Lining and Anta are strong in the north and the South market channel. If Anta wants to exceed Lining in the northern market, it will have to pay a very high price, so it is difficult to surprise the opponent in a specific regional market.

The third venture

In 1990, the Lining sports brand was formally established, and two years later, the Chinese Olympic delegation was provided with the award equipment. The Lining brand went through the first undertaking. Before and after the listing in Hongkong in June 2004, the company upgraded its deployment in the national strategy. It was regarded as "the second venture" by the industry. Nearly two years ago, Lining launched a new slogan and brand logo, which made the company fall into disapproval. The public opinion referred to as the "typical example of the negative teaching material case", and the third pioneering station was at the edge of success or failure.

Li Ning Co's net profit in 2011 dropped by 65.2%, and its income dropped by 5.8% to 8 billion 929 million yuan.

In the fourth quarter of 2011, in the order data, the order of Lining shoes was less than sportswear, because sportswear was more likely to be replaced by homogeneous products. Besides sportswear, it was also influenced by some casual wear brands.

The substitutes for sneakers are lower.

"The core markets of domestic brands are in the two or three tier market.

Among them, XTEP is walking between fashion and sporting goods, and has different ways from Lining and Anta, and the market is more professional.

"The 31st degree is taking the road of comprehensive sports," said Ma Gang, an independent critic of the sports industry. "Apart from international brands, Lining's main imaginary enemy is Anta.

Lining is slightly higher than Anta in terms of price, while Anta mainly intercepts Lining's customers in low and medium price customers, thereby reducing Lining's customer sources.

It is right to do the post-90's segmentation of the consumer market, and we can not ignore the feelings of the 70 and Post-80 market.

In fact, many domestic and foreign brands (including Nike and Adidas) adopt the practice of multiple markets going hand in hand.

After all, it is still more difficult to define the market after 90 precisely, and only by constantly trying to get it right, "Ma Gang said.

Li Ning Co said that at present, Li Ning Co will focus on "focusing on core business and improving operational efficiency".

In the four years of the Olympic brand marketing war, Lining faced the challenge of old rival Anta, and the Gladiator line continued from sales to sponsorship marketing.

At the beginning of June, the theme of "witness change, Dragon Fire London" was presented by the chairman of the Li Ning Co and the founder of Lining's personal platform company at the 2012 Olympic Games equipment conference. The competition equipment was provided for the five gold medal teams of gymnastics, shooting, diving, table tennis and badminton.

As a partner of the Chinese Olympic Committee, the theme of "Dragons London" put forward by Anta is only one word difference from Lining, and the award dress is provided for the Chinese national team. The competition between the two is fierce.

Ma Gang said

Lining has experience, Anta provides the national team award dress, Lining provides the match suit, but in the five gold medal matches which the Chinese people are very concerned about, because of the particularity of these items and the reason of live broadcast, Lining is likely to win the best in propaganda effect.

In addition, Lining recently announced the signing of a memorandum of cooperation to become a sponsor of the Chinese men's Basketball League (CBA) equipment. The agreement covers 5 seasons in 2012-2017 years. The Li Ning Co said, "the amount of sponsorship is not disclosed due to the consideration of relevant commercial provisions and trade secrets."