Lining: "Going Out" Frustrated The Internationalization Of Brands Is Hard To Break Through

Recently, a Li Ning Co spokesman told the media that the Lining sports clothing store in Hongkong, the only branch of Li Ning Co, was in early June this year.

For closure

The reason for the Li Ning Co is not positive, but that it will pay more attention to the mainland market in the future.

Lining's overseas market expansion is not isolated.

After 2008, the domestic sporting goods enterprises generally miscalculated the situation, and with the end of the era of high gross profit and high growth, the whole industry faced challenges.

Experts pointed out that in the face of this situation, local brands should shrink overseas expansion and pay more attention to the domestic market.

"Going global" is frustrated, and the internationalization of brands is hard to break through.

Lining Hongkong branch is a pilot of brand internationalization. It settled in Hongkong, Tsim Sha Tsui in October 2009, with an area of about 1900 square feet.

According to the Li Ning Co responsible person at that time, by 2018, Lining will become one of the five major sports brands in the world, when Lining will have more than 20% of its income from overseas markets, and 70-100 badminton stores will be opened in Southeast Asia by the end of 2009.

However, according to public data, the proportion of Li Ning Co's overseas revenue in total revenue in 2010 was 1.4%, and by 2011, the proportion was about 1.9%.

Compared with the established plan, Li Ning Co's overseas revenue share has not changed significantly over the past 3 years.

This year, Lining lost half of his employees at the design center in Portland.

In July 4th, Lining and Spain's agents set up a sales company to file for bankruptcy.

In addition, with partner Foot Locker Inc.

The agreement has also been terminated.

With the impact of this series of events, the internationalization of Lining's brand has become a mirage.

Independent commentator Ma Gang believes that "similar markets in developed countries such as Europe and the United States have been very mature, and it is very difficult to sell in a mature market.

The sporting goods market in Europe and North America has been quite mature, and Nike and Adi have been expanding for many years, leaving the market for domestic brands to be quite small.

In this regard, Li Ning Co responsible person said, including Hongkong, overseas markets, after all, there are many cases and the mainland market is different, the company is at the stage of exploration and learning, and should be controlled in a controllable way.

Stocks are under pressure, and mainland stores are closing the tide.

Since China hosted the Olympic Games in 2008, there has been a movement boom, and major sporting goods companies have also increased horsepower production sports products.

It is precisely in the miscalculation of the consumer market, the current major sports brands are facing high inventory problems.

As of August 29th, according to semi annual reports of 80 listed companies, the apparel industry and its upstream textile industry, 80 companies had a total inventory of 67 billion 166 million yuan in the first half of the year.

Among them, 11 companies in the clothing industry, including YOUNGOR, Hong Kong Group, China group, Mei Bang dress and Semir apparel, all stock more than 1 billion yuan.

The Li Ning Co is also hard to escape.

According to the Li Ning Co semi annual report 2012, as of June 30, 2012, the stock of Li Ning Co was 1 billion 138 million yuan, and the turnover days of inventory increased to 95 days from 72 days in the same period last year.

Insiders analyzed that overseas market, especially in Europe and the United States, the sharp decline in orders, the sharp shrinkage of single orders, is the main reason for increasing clothing inventory.

Inventory problem has seriously affected the capital turnover and continuous operation of enterprises.

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In addition to the high inventory problem, in June 12th, according to the Li Ning Co bulletin, the order volume and order quantity of Lining clothing products both declined, and the decline was over 20% in the fourth quarter of the Lining Products dealer order meeting.

Li Ning Co expects annual loss to be 226 million yuan.

stay

With the double pressure from the reduction of company orders, the performance of Li Ning Co has dropped again, and net profit has been greatly reduced.

According to Li Ning Co's semi annual report 2012, the company's revenue in the first half of the year was 3 billion 880 million yuan, down 9.5% from the same period last year.

Net profit attributable to shareholders of listed companies was 44 million yuan, a decrease of 84.9% over the same period last year.

In addition, in order to control the cost and efficiency of new stores, Li Ning Co has shut down some shops with poor performance and low profitability.

According to statistics, as of the end of June this year, the company's total of 7303 branches, the first half of the 952 have been shut down.

Industry "fever" has been retired, local brands also need to expand domestic demand.

Zhang Qing, the founder of sports Consulting Co. Ltd., told reporters that the closure of Lining's Hongkong branch reflects the bottleneck of China's sporting goods industry.

On the one hand, the era of high gross profit and high growth has gone forever; on the other hand, the growth mode of increasing sales through a large number of new stores has been difficult to sustain, and the expenses of terminal retail stores are also getting higher and higher.

In addition, from the fast fashion (such as ZARA, UNIQLO), outdoor sports brand, e-commerce three aspects of rapid development, so that the terminal retail market of sports brand has been seriously squeezed.

Under such circumstances, the sporting goods companies will inevitably face double pressures of increasing sales growth and increasing inventories.

Therefore, in the face of Li Ning Co's overseas market expansion failure, profit reduction, sales decline and other "internal and external troubles", Zhang Qing thinks, "Li Ning Co closes Hongkong branch is a rational choice."

Zhang Qing said that although the international market share of the Li Ning Co accounts for only about 3% of the total market share, the cost of capital and talent invested by the company in overseas markets is very high.

Under double pressure, if we increase the cost of the overseas market, it is undoubtedly "worse for the Li Ning Co".

"However, the pace of development of the sporting goods industry in the Chinese market is slowing down, but there is still room for growth."

Zhang Qing told reporters that China's per capita consumption of sporting goods is less than 1/10 of developed countries in Europe and America.

At present, not only Li Ning Co, but also other sporting goods companies focus on brand itself, sports spirit and domestic market.

Zhang Qing believes that sports products not only provide equipment and technical support for people in sports, but more importantly, the trend of product design.

The design of local sporting goods in China can not only integrate Chinese elements with western fashion elements, but also cross border cooperation with other brands.

In addition to brand differentiation, local sporting goods companies should return to the essence of sports in the process of brand promotion.

"It is worth thinking about every sports company to think about how to convey the idea and proposition behind the brand to stimulate the sports demand of consumers," Zhang Qing said.