Plan for Success: Li Ning
Emperor in Cavaliers, Fight Fearlessly; Advertising Agency: Leo Burnett, Shanghai, China
In a today’s economic landscape where being the market leader is what we are told to strive for, a sporting apparel company in China is showing the world an alternate approach to compete with the big boys. While Adidas, Nike, and Reebok continue to spend hundreds of millions on advertising, China’s Li Ning is proving it can compete at a fraction of the cost with a little planning and by going after 2nd and 3rd tier markets.
Need a logo? Where better to start then something resembling the unforgettable Nike swoosh. Worried that rival Reebok signed China’s top marketable athlete, Yao Ming? Have no fear, sign his teammate and equally visible-on-the-court-with-Yao, Chuck Hayes. Unable to compete with Adidas’ 80 million dollar bid to sponsor the Beijing Olympics? Who cares, let the entire world watch founder Li Ning lite the ceremonial torch to start the games for the price of…. nothing.
Former Chinese Olympian Li Ning won 3 gold medals at the 1984 games held in Los Angeles
The story behind the Li Ning shoes and sports wear company is one built on a brilliant long term strategy that really began with the awarding of the 2008 Olympics to Beijing. Years before the games were held, company founder Li Ning saw a chance for his company to capitalize. Already one of China’s most decorated former Olympians, Li Ning aimed to increase his company’s visibility on an international level. Of course when Nike opened its pockets and secured sponsorship to 21 of China’s 28 Olympic squads, most would have thought the rest of the competition would be left out in the cold. Instead, Li Ning eagerly scooped up the rights to outfit China’s diving, table tennis, shooting, and gymnastics teams. Still not satisfied, Li Ning aggressively secured sportswear deals with the Spanish men’s and women’s basketball teams, as well as becoming the first ever Chinese company to sponsor a team from the US.
Who can forget the amount of free publicity that came with this Li Ning campain?
...or this one?
While the Spanish National teams took alot heat for the ads with Li Ning, Public Affairs Director Frank Zhang dismissed the gestures as insulting, “In fact, the gesture shows that the Spanish team is so humorous, relaxing and cute. They sat around a dragon pattern, which we think showed respect to the Chinese.” Hows that for spin? But the damage was done. Even though its said that any publicity is good publicity, culture shock on the international scene was proving to be a challenge.
Skeptics were further critical when the company introduced a lower end sports brand called Z-Do, which included shoes/apparel/sports accessories that retailed for about half the cost of Li-Ning products at around $13-$40. But that’s exactly were they would succeed, cost cutting. Li Ning was already able to bring their full product line to the market at a lower price then giants Nike and Adidas with lower production costs by working domestically with factories in China. By adding Z-Do to their portfolio, Li-Ning has continued to grow- fueled by rapid urbanization, the secondary line now accounts for almost half the companies sales. Why just make Coke when you can also own and sell Sprite, Nestea, Powerade, etc. too, right?
As Nike and Adidas continue to dominate the Chinese sports and apparel markets, Li Ning has fought them back with a taste of their own medicine. Li Ning’s Visionary Marketing VP, Wu Xianyong, has has pulled their best trick out from their sleeve; teaming up with the NBA. While the market in China is large for shoes and sportswear, its peanuts compared to the US (2005 numbers show about 3 billion vs 30 billion). What partnership could better bring the Li Ning brand to the forefront of the global markets? Li Ning has gone on to sign individual deals with Damon Jones, Jose Calderon, Baron Davis, and even… the Diesel. Yes, Shaq, the man who once told a news reporter to tell Yao Ming, ‘ching-chong-yang-wah-ah-soh’ is now on onboard with Li Ning. So maybe a little controversy isn’t a bad thing after all. Li Ning is out to prove that causing a stir is a good way to compete when resources are limited. Just as Adidas claims, ‘Impossible is Nothing’ in its slogan, you gotta love a company like Li Ning who responds with, ‘Anything is Possible’ as theirs. Who knows, with China’s one child policy now being reviewed, there could be a need for a whole lot more shoes domestically soon. I have a hunch that one company is already licking their chops.
Can you spot the Shaq-Fu?
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