Domestic Sporting Goods Brands Have Been Discounted And Excessive Competition Has Become The Root Cause Of Losses.

Lining seems to be even worse.

It has been losing money for more than four years.

In the first half of 2014, Li Ning Co spent 6 months to shut down 244 stores and cancel 3 dealers, but the downward trend was not controlled.

It looks like it started in the summer of 2012.

"No obvious results have been achieved, but there has been little time left for Lining.

The development track of Li Ning Co is like a "n" curve.

Since its inception in 1990, the Li Ning Co has maintained a high growth rate, with its turnover rising to 9 billion 478 million yuan in 2010, and then turning like a runaway roller coaster.

In the second half of 2012, Lining lost 2 billion yuan and lost 586 million yuan in the first half of 2014, an increase of 400 million yuan over the same period last year.

Losses are not caused by one day.

After 20 years of high growth, Lining has accumulated a lot of problems. The past rapid growth has covered these problems, but they have not solved them.

When the business environment changed, these problems were suddenly detonated, and Lining collapsed.

Looking back on the history of the Li Ning Co, the following three factors have pushed it from a "high growth track" to the "downhill road".

1, strategy

Lining did not adjust the business strategy and market positioning synchronously with the change of external environment.

In 1990s, under the background of the beginning of the consumer market, Lining followed the low-cost competition strategy and took the attitude of Nike and Adidas followers into the sporting goods market, which helped it achieve its initial success and laid the status of China's top sports brand.

A prominent problem is that Lining takes Nike as a teacher. Product design, brand LOGO and marketing slogans are very similar to Nike. This strategic positioning brings two questions: "is Nike the ceiling of Lining?" "when Nike strategy sinks, what does Lining do?"

The Li Ning Co seized the nationwide fitness craze brought about by the 2008 Beijing Olympic Games and launched a radical expansion strategy. Under the stimulation of the "Olympic bonus", it gained huge profits.

Lining's success in this period was to seize the market trend and provide Chinese consumers with products of high quality and low cost. However, they did not form enough strong competitive advantages in design, research and development, management, channels, brands and marketing. Therefore, when it wants to break through the previous followers' attitude, raise the selling price of products, change the brand image of China's Nike and re target consumers, "after 90's Lining", attracting the younger generation of consumer groups, the mismatched core competitiveness and the top-level strategic positioning are seriously divorced from each other, which has led to a series of systematic mischief since then.

Lining adopts the traditional wholesale mode, directly facing customers who are suppliers at all levels instead of terminal consumers. Therefore, they lack the sensitivity to market changes and the insight of consumers' needs. The market reaction rate is too slow, and the backlog of products is serious.

Li Ning Co adopts the market layout mode of "Direct stores + franchised stores". The advantage of this mode is to quickly seize the market by relying on the strength of dealers, and to seize competitors. The disadvantage lies in the fact that dealers are different in their own affairs, so it is difficult to systematize management.

Because most dealers belong to single store business, shop image is old, operation and sales level is not good, resulting in a large backlog of over season products.

Since 2012, Lining has reshaped the business model, controlled the number of distributors, and expanded the network.

In the first half of 2014, while closing 437 franchised stores, 193 new outlets were opened and the sales of direct outlets increased by 7%.

3, extensive management

Because of the high proportion of franchisees, Lining's corporate culture and management concepts are hard to penetrate to dealers at all levels, so that they lack control and control over channels, and can not timely feedback and grasp the dynamic market information quick response.

Lining is committed to building up a "retail and marketing operation platform". The IT integrated management platform is implemented in all direct stores and some distributors' stores. Weekly meeting of fast response / fast delivery Executive Committee is conducted to test product coverage, display of goods, retail discount and selling out rate, inventory changes, adjustment of marketing methods and display layout, but the results need time to test.

Li Ning Co has been established for 24 years, and this is not a short time.

However, the fact that we have to accept is that in today's rapidly changing world, Lining has gone through a good year of rapid growth and entered a slow middle age in advance.

All things are done in middle age.

Behind them, the younger generation is coming full of vigor and vitality; in the front, the winning generation is still holding the way.

For Lining, Anta, represented by its local competitors, is coming back and forth, with the potential of the Nike and Adidas in the front. It can kill a way out of the encirclement, and outline another "S" curve outside the "n" curve.