Can Lining Recover The Lost Five Years?

After 5 years of dormancy, Lining's sales performance in 2017 is approaching the peak of that year.

When Lining was founded at 25th anniversary, he restarted the slogan "everything is possible". This represents the return of Lining brand, marking the strategic spanformation of Li Ning Co from sports equipment provider to "Internet + sports life experience" provider.

In March 22nd, Li Ning Co released its financial report in 2017 in Hongkong. In 2017, Lining group's income reached 8 billion 874 million yuan, an increase of 11% over the same period in 2016, of which gross margin was 4 billion 176 million yuan, up 13% from 3 billion 705 million yuan in 2016. However, the net profit of equity holders is 515 million yuan, down 19.91% from the same period last year. Although there is a gap compared with the peak data of 9 billion 479 million yuan in 2010 sales, Lining is returning to the right track from the overall performance of 2016 and 2017.

In the past 5 years, Lining has lost 5 years. During these 5 years, Lining suffered the mistake of brand strategy, suffered enormous inventory pressure and hard to stock, and suffered the first brand to hand over to Anta, and suffered a loss for three years. After a long adjustment and change, the Li Ning Co finally turned to profit and loss in 2015, and maintained growth and profit for three years. But compared with rival Anta, whether it's the turnover or the net profit, and the market value, it's not on the starting line. For Lining, it's really a long way to get back to the top of the brand.

In response to Lining's performance in the past few years, the Li Ning Co replied to the business school reporter that in 2015, Li Ning Co entered a new round of development year, usher in brand new life, restart the slogan of "everything is possible", marking Li Ning Co's strategic spanformation from sports equipment provider to "Internet + sports life experience" provider, and achieve profitability in 2015. And Lining continues to rely on products, channels and retail operation capabilities to build Lining experience value, to achieve healthy and sustainable growth of earnings.

Brand spanformation failure

Thanks to the positive impact of the 2008 Beijing Olympic Games, Lining's sales revenue reached a record high of 9 billion 479 million yuan in 2010 and a net profit of 1 billion 108 million yuan.

In 2010, the Li Ning Co set up 20th anniversary. At this moment, Li Ning Co launched a major brand remodeling project, abandoning the 10 year old "everything is possible" advertising language, changed to "Make the change" - let the change happen, this brand slogan is also regarded as another distillation of Lining's brand spirit -- Lining embraced the "90's". However, this comprehensive brand update has not been touted by the market, but has been questioned.

In the brand strategy expert, he Sheng brand management (Beijing) Co., Ltd. General Manager Li Wengang seems that a series of Lining catered to the brand image of the young audience after 90, not only lost the previous 70, 80 after the crowd, and the post-90s consumers may not accept Lining. Therefore, Lining's brand remolding strategy encountered a comprehensive crisis. Overnight, the previous generation of Lining's products had become an obsolete product. After 70 positioning, the old products after 80 became stock products.

"The younger brand is not just a slogan selling, nor is it a simple appeal to which brand belongs to which crowd. It is very hard and amateur to isolate people from the target audience in such a way of being too straightforward to use the brand to belong to which group of people." Li Wengang said frankly.

In addition to the deviation of brand strategy, Lining's product positioning also has problems. After 2008, with the overall promotion of Lining's brand value, sales revenue was second only to Nike and Adidas. Lining's product positioning began to be comprehensive and high-grade. After 2011, the price of Lining began to improve. The price of the mainstream products increased from 250 yuan to more than 390 yuan, and the price was fully integrated with Nike, Adidas and other international first-line brands. However, consumers do not accept Lining's overall "high-end", and the new positioning of new products has been rejected by the market.

In 2012, Li Ning Co sales fell to 6 billion 739 million yuan, a record loss of 1 billion 979 million yuan. The crisis broke out: the brand remolding failed, the product positioning was wrong, the channel was over expanded, the inventory was high, the executives were quakes, and the overall layoffs, and Lining, who had been following the wind, suffered a huge crisis.

Over the next few years, the Li Ning Co took a difficult road of adjustment. In 2013, Lining's sales fell to the scale of 5 billion 824 million yuan, losing 392 million yuan, and the number of franchised stores also shrank from more than 8000 in the peak period to more than 5600 in 2015. It was not until 2015 that Lining, who had been losing money for three years, began to turn a profit. But the sales revenue was still far from the peak in 2010. For Lining, a series of erroneous strategic choices made him lose the 5 years, and let the first brand of the Chinese movement lose its first place in 2012 and hand over to Anta.

Brand return

The Li Ning Co, which experienced a great setback, restarted the slogan "everything is possible" in 2015, that is, when Lining was founded 25th anniversary. This represents the return of Lining brand, marking the strategic spanformation of Li Ning Co from sports equipment providers to "Internet + sports life experience" providers.

In the key way, Zhang Qing, founder of sports consulting firm, seems to have experienced three stages of Lining's adjustment. The first stage is marked by Lining's return to the company. At the beginning of 2015, Lining returned to the board of directors and served as president and CEO to take over the management affairs of Li Ning Co. At that time, in the process of downgrading the company's performance, it could be said that it stabilized the company's situation and adjusted the staff, and found some veteran employees who had higher loyalty to the company.

The second stage is to adjust the multi brand strategy, focus on the local market and focus on the professional sports market. At this stage, the sponsorship of the CBA tournament was signed. In the basketball, running, women's fitness and other professional areas continue to start farming and strength. "I think it is a good foundation for his positive cash flow, including optimization and adjustment in terms of channels, focusing on retail sales." Zhang Qing stressed.

In the third stage, Lining began to make efforts in digital marketing, including the further strengthening of the retail experience, and the brand fashion. For example: the theme of Lining's fashion show in New York fashion week in February 2018 shocked the whole stadium, and made the Lining brand "look at each other" by the fashion trend. With the sensational effect of New York fashion week, Lining's stock price rose by HK $6 billion in one month. This series of measures has made an upward trend in performance.

From Lining's 2017 financial report, we can see that Lining's biggest adjustment is to focus and focus on Lining brand, and other brands' contributions are further weakened, such as ending cooperation with Italy brand Lotto, and selling shares of red double happiness. Obviously, from the growth of revenue and net profit, Lining's series of strategies focused on basketball and running, focusing on the brand of Lining have been effective.

At the same time, Lining brand is more focused on professional sports route. On this basis, the tonal design of the national brand is designed, such as the sports fashion show in New York fashion week. Under this brand is the use, R & D and design of new technology, as well as the input of retail experience and professional sponsorship market.

In the fashion week of New York, Lining branded all kinds of sports clothes on Chinese elements. A model or a Chinese national flag red or yellow coloured jacket or T-shirt or sweater with Chinese characters such as "China" and "Lining". Lining's fashion nationalism design style in New York fashion week has won the recognition of younger people. This shows that young consumers' recognition of local brands is improving. Of course, this requires more cool design at the product end, better technology application, and professional function design.

"We will enhance the professionalism of our products. fashion Sex, integrating functional and fashion elements into product design to meet the preferences and needs of different consumer groups, enables consumers to have the right Lining products on any occasion. " Li Ning Co replied to business school.

After stripping off the Lotto and red double happiness brands which had little help to the main industry, Lining also cautiously made some new brand acquisitions, such as selecting overseas brands including yoga brands, which are closely related to Lining's basketball, running, women's fitness and other professional markets. The introduction of such brands will play an important role in Lining's brand specialization.

Remodeling children's clothing brand

With the introduction of the two child policy and the pursuit of quality of post-80s and 90s parents becoming the main force in the consumer market, children's wear has become the best food in the shoe and clothing market. Not only is PEAK, Anta, 331 degrees, Lining has always wanted to build up her brand advantage in the children's wear market.

In 2017, Lining's big move was to launch the children's wear market. The original Lining KIDS was remodeled and upgraded to Lining YOUNG. At the same time, 3-14 year old teenagers were targeted to target consumers. For different age groups, two product lines were set up: 3-6 year old curious children and 7-14 year old dynamic juveniles, extending the coverage of shoes to running training, basketball and sports fashion.

Liu Xiang, founder of sports consulting firm, said that Lining had chosen to develop children's clothing with partners, but it was not good from sales and market reaction. Discount sales were the performance of cleaning up inventory. Positioning from 3-14 year olds is also more accurate, because 0-3 year olds do not have much demand for sports children's clothing. This time, Lining remodeled children's clothing by himself. Obviously, he saw children's clothing. market Good prospects.

"In the past period of time, we saw that 360 degrees and Anta were doing everything in the field of children's clothing. But Lining failed to make a good job in sports children's clothing because of his strategic decision making mistakes. It is a great strategic mistake to cooperate with Parker in making children's clothing in an authorized way. Such a good market must be done by itself, so that we can have a chance to succeed. Of course, Lining decided to take this brand back and make it happen, and challenge and opportunity coexist. Zhang Qing appraise.

As a matter of fact, because Lining's children's wear is a mode of authorized operation, partners are not enough in input, financial strength and understanding of sports children's clothing market, which directly leads to the backwardness of Lining's children's clothing. Obviously, Lining realized this problem and no longer allowed himself to do nothing in the hot children's clothing market. Children's wear Category, and rose to the company's strategic level. Next, we will see Lining in the children's clothing market offensive, large-scale shop and force business channel.

"With the opening up of two children and upgrading of consumption, the scale of children's wear in China has been expanding and maintaining a relatively high growth rate. We are optimistic about the share and development space of sports children's clothing in the market of children's clothing, and will also grasp the change of personality needs of new consumers according to their brand's sports attributes and sports product research and development advantages, and establish consumer cognition and even recognition, so as to enhance market competitiveness. The head of Li Ning Co said.

It is understood that in 2017, Lining YOUNG business opened 173 new image shops in 26 provinces across the country. Lining YOUNG officially launched after the end of the original authorization contract in January 1, 2018. At present, the original Lining KIDS nearly 400 stores also moved to Lining YOUNG, later Li Ning Co will upgrade these shops.

It is reported that the original Lining KIDS shop opened by the original authority mostly concentrated in the two or three line city. After replanning and layout, with the help of group platform resources, the construction of image store and retail benchmarking shop in the first tier cities will be strengthened, but the core of the channel will continue to develop the strategy of steady development of the two or three line market. In the future, KIDS shops will be renovated and upgraded to a new image of YOUNG.

"Lining can continue the practice of the success of the mother brand, and make efforts in terms of professionalism and fashion. Of course, the children's clothing market has some inherent laws of its own spanportation. I can only say that the challenge is very big and the opportunity is also there." Liu Xiang said.