Lining Is Running Fast To Overcome Difficulties And Is Expected To Take The Lead.

Dewayne Wade, the Miami heat player who just won the NBA finals, appeared on the stage wearing the "Wade road" T-shirt. The flash man just showed his teeth and smiled, and immediately returned to the scene of more than two thousand fans screaming.

A student who has just taken part in the college entrance examination said that her hard learning career was inspired by Wade's sports spirit. She was awarded a reward by surprise and could kiss Wade, so the scene screamed again.

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< p > Li Ning Co hopes that Wade's appeal can also infect distributors. In another venue not far away, these days, Li Ning Co will be holding orders for the first quarter of next year.

Dealers from all over the country see that "Wade road" series products have been placed in a prominent position. This is the high-end series of Lining basketball product line, which will be sold as a recommended product in the first quarter of next year.

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< p > it can be said that together with the series of "Wade's way" series, which are included in the most popular products of the season, the Li Ning Co called A+ combination will be the key to the profitability of the more than 6400 dealers nationwide, and also one of the changes made by Lining, the earliest sporting goods company in China, to reverse the huge losses.

Before that, the Li Ning Co did not worry much about what style the dealer had ordered, because Lining's sales work was basically completed from the moment he got the order.

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Last year, after the first loss of 8 years after listing, and the huge loss of nearly 2 billion yuan, Li Ning Co signed Wade is not an easy decision. P

It is widely assumed that it paid 10 years and 100 million dollars, plus the cost of sales and stock rights.

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< p > but compared with spending hundreds of millions of dollars to repurchase and clean up inventory and close 1800 stores that are unable to make ends meet, it is absolutely pleasant to negotiate with Wade and his broker.

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The Li Ning Co, "P", has high hopes for the investment.

This kind of business cooperation in the common way of return is naturally unavoidable, Li Ningqiu a target= "_blank" href= "//www.sjfzxm.com/" "//www.sjfzxm.com/" > shoes /a > to participate in the NBA competition, to meet the fans in China, television advertising, and the introduction of a series of Wade products.

In addition, shortly after signing Wade in October 10th last year, the Li Ning Co did an unusual thing. It took only 60 days to launch a modified low - priced basketball shoe to the market.

Hope to borrow a wave of basketball upsurge set off by Wade to drive sales.

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P > 60 days is a common thing for fast fashion brands such as ZARA, and their a target= "_blank" href= "//www.sjfzxm.com/" > designer < /a > can design a product that fits the latest trend in two weeks and let it appear on the shelf, but the Li Ning Co did not do it before.

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< p > traditional sporting goods company, a product from design to put on the shelf takes 15 months.

The first 9 months are product design, and then the dealer will take part in four orders every year. After receiving the order, Lining's outsourcing factory will start to produce. After 6 months, consumers will be able to buy this product.

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< p > this practice is called brand wholesale mode, which is very common among Chinese sports companies.

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< p > in the extensive combination of expanding the number of stores and competing for market share, Brand Company focuses on production and design. Designers improve products based on feedback from distributors. Dealers choose styles based on experience and preferences. Brand Company will hardly be directly concerned about changes in market demand.

Finally, when the overall market demand declined, Lining and its main rival Anta were in trouble.

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< p > Jin Zhenjun, the executive vice chairman of the Li Ning Co Ltd board of Directors believes that the mode of operation must be changed. The sales of Chinese sporting goods reached the peak in the 2008 Beijing Olympic Games, and faced more and more intense competition after that.

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< p > "the growth rate of the whole industry is declining and showing signs of saturation. This model is no longer suitable for the development of the industry, and it has begun to affect the company's financial performance."

He said.

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P CEO, a key sports consultancy, said that domestic sporting goods companies had to clear up inventory for the past radical expansion, and then change the traditional mode of operation.

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Less than P, basketball shoes sold for only 60 days are priced at 299 yuan, facing the mass market. It is Lining's attempt to shift from brand wholesale to retail oriented business mode.

Inside Lining, this practice is called fast response project, which is sold from product planning to up to 90 days.

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From P to November 2012, Hong Xiao Guo, a senior product manager of Li Ning Co shoes product planning campaign and life category, has more than one title, namely, director of sports life quick response project.

His first product was the $299 public product - the actual generation of basketball shoes.

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< p > before that, the Wade series's shoes were priced at more than 700 yuan, and the limited edition was also sold to thousands of yuan by fans.

After raising the selling price and brand positioning, and being robbed of the two or three line market share by domestic competitors, Lining signed Wade to promote the overall consumption demand of basketball products, and the biggest customer group of basketball products was students. The introduction of a basketball shoes at the right price is obviously more market value than the limited edition.

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< p > the first thing we should do is to explain the background of the product in detail, who the consumers are, what the prevailing colors and trends are, what kind of preferences the target groups have in design, the target price and so on.

Then Zheng Yongxian, director of the footwear product design of Li Ning Co, began to conceive the design of this shoe. He chose 5 matching colors, and at the same time increased the performance within the scope of cost allowable, using soles with cushioning function.

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< p > from December, the sales rate of shoes sold in two months (the share of sales accounted for the cost of goods) reached 40%.

Li Ning Co sales staff say that no footwear product has been able to perform this way in the past two years.

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< p > usually Lining dealers will purchase 60% of the estimated products at the order meeting, and 80% of the goods will be stacked in their warehouses at the start of the season.

ZARA will only complete the order of less than 25% months ahead of 6 months, and only 60% to 70% of the products will start at the beginning of each season.

This means that up to 50% of the products are designed and manufactured in the season.

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< p > quick response project is equivalent to a flexible channel outside four orders per year.

It plans to launch a quick response product every month. It will form a rapid response team from the managers of the product department, formulate product plans according to the latest trend and sales data, design and improve the products on a mature basis, and launch them quickly.

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< p > according to the data provided by Lining, the current rapid reaction products account for only 10% to 20% of the total sales volume, but the profit rate is higher than that of the bulk products ordered at the order.

Seasonal products meet consumer demand, fast sales, basically no inventory, new product discount rate is low, and product development and production cost is low, the future share may increase to 50%.

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< p > Jin Zhenjun believes that sports brands are different from fast fashion. The former must have professional sports elements, but from the perspective of business operation, the goal of establishing a fast supply chain is consistent.

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The operation mode of < p > ZARA has brought a very high production and marketing ratio, almost no inventory pressure, which has great attraction for Lining.

But the rapid response mechanism is only a supplementary link. The fundamental way to solve the problem is to build a retail oriented, fast response supply chain system, from the beginning to design products that meet the needs of the market, and make changes at any time, more frequently to grab data from stores, and eventually even allow product design to interact with the display of stores.

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< p > there must be another reason for this: the sporting goods market in China can not be promoted by sports events to form a healthy sports consumption environment.

Zhang Qing said: "the sports industry in the United States accounts for 5% of GDP. A tournament can lead to a few percentage points increase in sales of jerseys, while the sales of Chinese jerseys are not even 1/1000."

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< p > sports products are fashionable, making fast fashion brands their rivals.

A typical example is that Nike is not affected by fast fashion in the US, but has been disrupted by fast fashion invasion in China.

In the second quarter of 2013 (September 2012 to November), Nike's sales in China fell by 11%, the highest in the world.

The multinational company, which is in the leading position in the Chinese market, has to plan to open 40 to 50 factory stores to clean up its stock.

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"P," said Yao Wang, a consultant of Huatong Ming and Li said: "sports and lifestyle products need to speed up their response. Professional sports products are not so urgent because professional products need to be worn for 35 months before they can see whether the products are good or not."

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< p > faced with the radical changes that had to be made, even the founder Lining returned to the company.

But he made an important decision to let TPG, a private equity firm, become a new investor in the company, and a new team to drive the company's radical pformation.

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< p > Korean American Jin Zhenjun was a partner of TPG and head of Greater China before joining Lining. He led the restructuring and management reform of Daphne and large automobile dealer group Guanghui automobile.

After the TPG was bought at the beginning of last year, Jin Zhenjun, as the representative of TPG, spent 7 months looking for the core problems and solutions of Li Ning Co.

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"P," he later said, "frankly speaking, the challenges and challenges faced by Li Ning Co are even more severe than those faced by other companies."

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In July 5th last year, Jin Zhenjun was appointed Vice Chairman of the Executive Board of Li Ning Co and formally announced Lining's strategic pformation plan. P

The first step is to clear inventory, improve product and operation cost structure, strengthen management and execution capabilities, increase fresh blood for board of directors, and improve channel efficiency, focusing on core products and domestic market.

The second step is to assess the company's operating conditions and improve the supply chain, marketing and product planning models.

The last step is to pform the business model into a retail oriented company.

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"P", "our reform takes time, because we are creating a path to overcome a wide range of industrial challenges, which is why we take such bold steps to make changes.

We are addressing the problem systematically and organically.

Kim said in the Li Ning Co annual report 2012.

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< p > Yao said: "retail oriented, speed up terminal reaction, single small batch production, and then adjust according to market feedback, which requires every link in the supply chain to change from raw material, design, production to pportation, hardware and software feedback system also needs to be changed, which increases production cost and management difficulty."

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< p > Jin Zhenjun hopes to replicate the previous success.

In 2009, when he led the TPG team to Daphne, its stock price was less than HK $3.

In the two years after the entry of the company, Daphne shares rose 4 times, profits increased 1 times, and sales increased by 50%. Jin Zhenjun successfully pformed Daphne from "manufacturing oriented production mode" to "large-scale rapid retail mode".

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When he took office, he began to change the management team. He was the head of product planning and design at the beginning. By the beginning of this year, Lining had replaced the whole management level, including chief product officer, chief sales officer, chief supply chain officer, chief marketing officer and chief financial officer, P.

Most of Li Ning Co's top management team has international background and management experience.

Both product and design executives are experienced in international sports companies, such as Adidas, with many years of experience.

Now, TPG has more than one professional in the Li Ning Co.

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< p > in the chain from product design to listing, Mr. Kim added a new department product group Merchandising to allow professionals to decide which products appear at the order meeting.

"We must have a discerning team. He knows which products sell well and which color is better."

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< p > this team is composed of people in product planning and retail department. These people must be sensitive to data and product trends, and understand market changes through consumer surveys, retail data and trend analysis.

This department will participate in the whole process of product planning and development, and analyze shoes and color matching.

If the later data show that the style has been adjusted before, it will be modified in time.

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< p > this reduces the blindness of the new product planning in the process and lays the foundation for improving the efficiency of the order.

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Less than two months after taking office, Kim Kim Chun began to make more subtle adjustments when he first attended the order meeting. P

The company recommends the best selling products to dealers, which is the A+ product portfolio mentioned earlier, so as to reduce product categories, optimize product mix, and help dealers reduce order blindness.

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< p > "for example, 10 products, the best selling is two, accounting for 30% to 50% of your total sales, and its efficiency is 3 times higher than that of ordinary products."

Jin Zhenjun said.

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< p > and it is proved that the sales and sales speed of recommended products are obviously better than that of ordinary products.

"The introduction of A+ has made better product mix optimization.

The same store sales are improving, and the rapid response capability of products is gradually strengthening.

In an internal meeting, Jin Zhenjun summed up the performance of the first two quarters of this year.

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< p > Liu Guozhong, general manager of Shandong Liwei company, has been a Lining agent for 20 years and has more than 400 Lining stores.

In September 2012, when Liu Guozhong took part in the first order meeting after Lining's return strategy, he first heard about the recommended products by Li Ning Co, and found that the number of single products was significantly reduced.

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< p > "in the past to participate in the order, thousands of different colors and styles for us to choose, dealers are a challenge."

Liu Guozhong said.

The sales prospects of the recommended products are hard to predict, but it would be a great pity to miss the good ones.

Liu Guozhong decided to try it, including 50 thousand pairs of tenth generation ultra light running shoes order.

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< p > the product of this order will start selling on shelves in April this year.

Sales data surprised Liu Guozhong. His store sales accounted for 42% of the footwear sales. The proportion of footwear sales increased to 55% in April this year.

50 thousand double tenth generation ultra light running shoes went on sale for more than 1 months, and the sales rate has been higher than that of the previous generation.

But he also mentioned that "a target=" _blank "href=" //www.sjfzxm.com/ "> clothing" /a "product sales have not yet improved significantly.

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< p > the ultra light running shoes which made Liu Guozhong continuously add orders are another successful product after the establishment of the cargo Department and the quick reaction chain.

This running shoe is not all new. It was first born in 2005 and has become the main runner product of Li Ning Co.

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< p > group Cargo Department found that this shoe has a good sales basis, but with the advent of summer, the material is slightly heavy.

Lining, senior designer of the footwear product design department of Sun Jingyi, has designed the design. Considering the arrival of summer, the upper surface of the cloth is made of sandwich structure. Taking into account the higher requirement of durability for men's shoes, carbon fiber soles are used to increase the toughness of running shoes.

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< p > on the basis of recommending the best selling products, Li Ning Co also plans to constantly adjust this mode and make suggestions for ordering retail stores according to the characteristics of different regional markets.

Jin Zhenjun mentioned that his idea was inspired by DELL shop, and DELL could adjust the price and product category weekly according to the data.

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< p > after completing the work, the next step is to form a closed information feedback system between the distributor and the product department.

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Less than P, the retail oriented fast mode is inseparable from the latest data support of stores. Stores are the last link of sales and the first step of future product planning. On this basis, the right products can be delivered to the right place at the right time at the right time.

This has already been mature in other industries which are sold by agents. Some efficient automobile companies can produce orders according to the orders submitted by dealers.

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< p > "traditional wholesale mode, manufacturers only sell goods to distributors, do not care about terminal sales, in the market prosperity, the problem is covered up, but once the market fluctuates, dealer problems, and ultimately hurt the manufacturers."

Jin Zhenjun said.

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< p > simply speaking, the 6400 stores have become the different markets that Li Ning Co needs to meet. In the past, dealers were only required to pick up the goods themselves.

Now stores need to confirm all kinds of information, Li Ning Co will adjust according to weekly feedback.

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Retail Business Management (P) is established for this purpose, and there are retail data updates every month and every week.

According to these data, stores should replenish, reduce, distribute and display weekly.

After the retail store management is implemented, the consumer oriented fast supply chain can be truly established.

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"P", starting from December last year, Zhong Ming, head of retail operations of Li Ning Co, regularly appeared in retail stores all over the country. He is a member of the new management team of Kim Chun Chun, specializing in retail store management.

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< p > retail store management first is to understand the market and accurately locate the consumer group, followed by product designers using the data acquired by retail stores to understand their real needs.

The third is to set up a retail testing platform to analyze the key information in the retail data and optimize the allocation of resources.

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< p > last year Lining assessed all the stores. 20% of the more than 8000 stores could not be profitable or inefficient, and could only be turned off.

Zhong Ming said that rents account for a very high proportion of sales, so it is better to turn off the stores that are not profitable to get rid of the cost of goods purchase, store deduction and discount sales. If the existing stores are run well and each store sells 10 thousand more, the total sales will not be affected.

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< p > Zhong Ming looks for information that can reflect market changes from details.

He set out to improve the VI design in the store, display methods of goods, what products should be highlighted in different seasons, and the familiarity of the shop assistants.

This is part of Lining's sixth generation shop plan to improve customer experience and increase sales of individual stores.

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< p > "store furnishings directly affect sales.

A product can be sold on models, and sales will be higher. "

Liu Guozhong's store was the first to be reformed. Now he has gradually accepted this fine management method. "Store data will be sorted out every week, and meetings will be held weekly to discuss countermeasures."

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A series of changes in the "P" Li Ning Co began in July last year and it is just a year now. According to Jin Zhenjun's earlier statement, it may take two or three years.

A company that has lost market share for three consecutive years and has suffered huge losses is hard to get out of the trough through short-term reforms. At least this year's financial figures are still not good looking, but Lining is indeed beginning to get out of the most difficult period.

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< p > at the end of May 2013, at the annual general meeting, Jin Zhenjun said that the sales and discount rates of new products have improved significantly since the fourth quarter of last year. The proportion of inventory and sales has dropped to 7 times in February this year. He expects to resume to five or six times normal level in the second half of the year, and the time spent in the reform of channels and supply chains may also be shortened.

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< p > Macquarie Securities reported in June this year that the Li Ning Co situation will be reversed.

The pace of Lining's closing down is slowing down. In the first half of the year, only about 200 stores were closed, far less than 1821 last year, plus potential stock returns. I believe Lining is likely to achieve the expected reform targets.

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< p > Macquarie Securities even believes that Lining can become the first Chinese sports brand to go out of the trough.

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< p > when China's sporting goods industry is frustrated, performance decline and stock increase are common phenomena.

Hua Tong Ming Yao Yao believes that every company has its own special problems, and Li Ning Co seems to have found the crux of the problem.

Can Lining get back to the top three of the sporting goods industry? We will see the answer in the next two years.

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