china

Li-Ning: Straight Out of 'New China' to Cali - and the London Olympic Games

Posted by Abe Sauer on May 14, 2012 11:32 AM

For the third year, San Francisco's famed Alcatraz will serve as the site for the final game of the one-on-one Red Bull King of the Rock basketball championship. And for the first year, Chinese sportswear brand Li-Ning will be the official footwear and apparel sponsor.

For China's most famous athletic brand, established in 1990, co-sponsoring King of the Rock (along with Skullcandy, 24 Hour Fitness, and Dime magazine) is an opportunity to regroup and take another shot at a US market in which the brand has met a little success and a lot of setbacks.

Now Li-Ning is hoping to be a foreign success story, one of the few amongst successful Chinese brands that struggle to make a dent once outside of China's borders. Where better to test a brand's mettle than the infamous "yard" at America's most famous prison?

From Li-Ning's release:

"As the official merchandise arm of the event, Li-Ning will provide the official game jerseys for all U.S. qualifying events.  The company will also provide specially designed head-to-toe gear for the final competitors on Alcatraz Island, including the latest Li-Ning performance basketball shoes, game shorts, jerseys, and warm-ups. The company will also design and sell exclusive branded Red Bull King of the Rock merchandise at select qualifier events in the United States and online starting in May."

Li-Ning, by the way, sponsors badminton star Lin Dan, who's also a Red Bull spokesman.

Named after China's most famous gold medalist, Li-Ning made a splash during the 2008 Beijing Olympics when its namesake and founder ran along the walls inside the stadium to light the flame. Li-Ning became a Chinese market success story, and duly turned its sights on America by sponsoring NBA stars like Evan Turner and Baron Davis. (The former currently in the playoffs, the latter currently suffering a possible career ending injury.)

The brand even signed a deal with Shaquille O'Neal. In 2010, Li-Ning released an ad so self-aware that it stood toe-to-toe with anything Nike was doing. In fact, in a show of post Olynpic chest thumping, Li-Ning opened its first US location near Nike's Portland, Washington HQ.

Fast-forward to 2012 and Li-Ning stock is taking a beating after the company reported a crippling 65 percent drop in profit in 2011. Increased competition in China from both homegrown brands and global powers like Nike and Adidas are hurting Li-Ning's competitive edge. In America, meanwhile, it could really use a boost.

"Our sales have met our expectations and the growth of our community of followers via our social medium platforms has trended ahead of forecasts. We're very pleased with the market penetration we've made to date," says Craig Heisner, the brand's U.S. VP of Marketing, Sales, and Merchandising. Heisner's assessment is backed up by the fact that the Li-Ning Facebook page has 88,443 likes. Remember, Facebook is blocked in China. (For comparison, Nike's Facebook following is about 9 million; Adidas, 7 million.)

In addition to wooing American sneaker-heads and hoops fans, Li-Ning is already looking beyond the NBA and King of the Rock to the summer Olympic games in London. The brand claims an impressive stable of global talent, including Russian pole vaulter Yelena Isinbayeva, Jamaican sprinter Asafa Powell, Norwegian javelin thrower Andres Thorkildsen, and Zimbabwean sprinter and long jumper Ngoni Makusha. But for the US market, Li-Ning's Olympic hopes are on the USA's star triple jumper Christian Taylor.

Heisner says that Taylor brings an incredible amount of charisma to Li-Ning's brand. To tap into that, Heisner says, "We have plans to allow the consumer a chance to digitally experience Christian's first Olympics journey from the training leading up to the U.S. trials in June to hopefully earning a spot on the team and his time in London. Video blogs, Twitter feeds and the use of captured content will all be utilized to allow his fans to be close to the action."

Li-Ning's hoped for turnaround is about more than just product and the names attached. The brand is using a unique method to get its foothold, selling purely online in the U.S. while maintaining no retail locations — in contrast to China, where it operates more than 8,000 stores.

Heisner says that the biggest jump for Li-Ning to make with regard to the U.S. market is "establishing momentum through trial with relevant products that address the needs of a performance-based consumer here in The States." But as any sneakerhead knows, the athletic shoe industry doesn't rotate only on performance. To up its yowza! quotient, Li-Ning has recently dappled with the kind of limited edition shoes collectors crave.

Cue the brand's buzz-getting, limited-edition shoes: the Year of the Dragon limited edition collection of four, dragon-designed sneakers. The set has won the brand a great deal of attention. In addition, Li-Ning has attempted to keep things international by focusing away from its "Chineseness." In a bow to American athletic shoe-collectors, Li-ning this month released a a limited edition Cinco de Mayo "El Boom Loco" shoe related to its sponsorship of Baron Davis. While a few questioned if the shoes weren't a teensy bit stereotypical, they did get people talking.

Li-Ning's Chineseness is something the brand is obviously very aware of. Its product lines carry names such as "The Louts collection," its pitches are puns on "real Eastern principles." But currently, the brand tagline greeting visitors to the English version of the Li-Ning website is "Straight Out of the New China."

The "new" China can be defined by each consumer, and maybe that's their point. One thing Li-Ning cannot avoid—something Heisner wisely declined to comment upon—is that every time a story runs that puts Chins in a negative light vis-a-vis America, the Li-Ning brand has to work that much harder.

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