How sports-brand Li-Ning took China’s fashion to the world stage by embracing Chinese culture & cotton

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The Chinese sports apparel brand Li-Ning has even furthered its status as a national brand. After Nike, H&M and other foreign apparel companies announced their positions on Xinjiang cotton, Chinese consumers found that Li Ning’s products had been branded with the words “Xinjiang cotton is used in our products”. The discovery sent Li Ning’s share price up 10% on March 26 and it has continued to rise. By April 14, the stock had reached nearly 59 yuan per share, up 28% from about 46 yuan before the surge.

Li-Ning has printed on its logo the use of Xinjiang cotton

Source: Zhihu.com, Li-Ning has printed on its logo the use of Xinjiang cotton

The ups and downs of Li-Ning

Established in 1990 by China’s “prince of gymnastics” Li Ning, Li-Ning has come a long way from a local Chinese sportswear brand to the face of China’s fashion on the stage of New York Fashion Week runway show. As a local Chinese sportswear brand with thirty years of history and face of an Olympic champion, Li-Ning achieved great success and reached its peak in China’s sportswear market around 2010.

However, facing the competitions from global retail giants such as Nike and Adidas in China’s sportswear market and failure to appeal to young consumers, Li-Ning experienced a major fiasco in 2012 following three years of losses. In 2018, Li-Ning managed to engineer a turnaround from 3 billion of losses to today’s “light of Chinese goods” (国货之光) by reconnecting the brand to its Chinese roots.

Li-Ning managed to be regarded as today’s “glory of Chinese products” (国货之光) by reconnecting the brand to its Chinese roots. As the global fashion community  has now seen, it combines the western sportswear silhouettes and Chinese traditional elements.

Source:  Daxue consulting and Double V. Training & Consultancy; China rising fashion brands report, designed by Daxue Consulting, Timeline of  Li-Ning major achievements.

Source:  Daxue consulting and Double V. Training & Consultancy; China rising fashion brands report, designed by Daxue Consulting, Timeline of  Li-Ning major achievements.

The Covid-19 pandemic has hit the retail sector of the world economy hard, which caused exits of many retailers, while Li-Ning’s net profit in the first half of 2020 still increased by 12.7%. As the coronavirus gets contained in China and economy gradually recovers, Li-Ning could expect to see a rapid growth in the next half of the year.

How Li-Ning renewed its brand image

Since its peak in 2010, Li-Ning found it quite difficult to remain relevant in China’s sportswear market and often considered old-fashioned. Targeting the post-90s generation consumers, Li-Ning’s management team decided to reposition the brand as fashionable and international but came off as quite the opposite. Li-Ning not only failed to attract young people but also lost its existing consumers from the older generations due to its awkward transition. After several years of struggling, Li-Ning’s founder and former CEO Li Ning took over the company, hoping to boost sales again.

Li-Ning embraces traditional Chinese culture

Source: Nipic, Li-Ning embraces traditional Chinese culture

Li-Ning has broken away from the “old-fashioned national product” label and has established its own aesthetic image in design to cater to the new trend of Guochao (国潮)

Giving up on having an international appeal and revisiting its pride and confidence in “Made in China,” Li Ning and his team decided to renew its brand image by incorporating more Chinese elements in its design. At the New York Fashion Week on February 2018 and Paris Fashion Week runway show on July 2018, Li-Ning impressed China and the world with its brand-new “中国李宁” (China Li-Ning) logo print and fashion sense. According to Baidu index search frequency data, the search volume for Li-Ning peaked around February 2018. Blending traditional Chinese characters and modern fashion styles into its design, Li-Ning’s comeback show built just enough hype for the reborn of the brand and lead China’s sportswear market into a fashion revolution.

Source: Daxue consulting and Double V. Training & Consultancy; China rising fashion brands report, Li-Ning’s rebranding

However, this small bump in searches was shadowed by the searches after the Xinjiang cotton controversy.

 Search Index for Li-Ning from 2017.07 to 2021.04

Data Source: Baidu Index, Search Index for Li-Ning from 2017.07 to 2021.04

Li-Ning frequently co-brands with domestic brands

After the success of its huge comeback, Li-Ning has conducted a series of marketing campaigns collaborating with big IPs, brands, and variety shows.

Co-branding is a very popular strategy in China that helps brands increase exposure among other brand’s fans. The collaborations with other domestics brands also demonstrate that Li-Ning devotes itself to spreading Chinese Culture. The design of its clothing shows the sense of national pride.

In 2019, Li-Ning cooperated with the media department of People’s Daily(人民日报), one of the oldest Chinese newspaper publishers, and launched a series of co-branding products with retro designs including T-shirts, caps, shoulder bags, etc. Outside the media department of People’s Daily, Chinese young consumers were standing in long queues to purchase Li-Ning’s new products. By reconnecting the brand with Chinese culture, Li-Ning reshaped its relationship with Chinese consumers as well. Today, Li-Ning is no longer considered an outdated Chinese sportswear brand, but a trendy brand young people are proud to wear.

Li-Ning’s collaboration with popular brands

Source: Daxue consulting and Double V. Training & Consultancy; China rising fashion brands report, Li-Ning’s collaboration with popular brands

Li-Ning’s digital transformation: from brick-and-mortar to omni-channel

As the concept of New Retail becomes popularized, traditional retailers seek digital transformation to establish a strong online presence. Around 2015, Li-Ning cooperated with Alibaba and built its own “Data Middle Platform” (数据中台)to construct omni-channel data system, which helped Li-Ning dredge the chokepoints of its supply chain and largely accelerated Li-Ning’s digital transformation.

Shifting focus from the number of physical stores to operation efficiency, Li-Ning has shut down over 500 physical stores as of the end of June 2020. According to Li-Ning’s annual financial report of 2020, e-commerce has risen to be the second-biggest channel, secondary to concessionaires, which contributed 29% of the total revenue, up 5% from 24% in 2019. Meanwhile, sales contributed by the retail channel fell from 27% to 23%.

digital transformation of Li-Ning

Source: Daxue consulting and Double V. Training & Consultancy; China rising fashion brands report, digital transformation of Li-Ning

How Li-Ning broadened its products range to attract more consumers

Not limited to sports brands or sportswear, Li-Ning also produces trendy clothes and accessories fit for different occasions.

Li-Ning’s product range

Source: Daxue consulting and Double V. Training & Consultancy; China rising fashion brands report, Li-Ning’s product range

Li-Ning made new slogans that appeal to national pride

During the brand’s development Li-Ning has changed its slogan twice in order to focus on segment market and cater for new groups of consumers.

From 1990 to 2010: with its slogan “Anything is possible”, Li-Ning hopes to motivates consumers to be ambitious and perseverant. However, the company has received criticism over the years about how their slogan “Anything is possible” resembles Adidas’ “Impossible is Nothing”.

Source: Li-Ning, Li-Ning’s logo from 1995 to 2010

From 2010 to 2015: Since its peak in 2010, Li-Ning changed its slogan from “Anything is possible” to “make the change” so as to reposition the brand as fashionable and international and appeal to targeted post-90s generation consumers. “Make the Change” became Li-Ning’s new brand motto, which encourages consumers to embrace change and make breakthroughs.

Source: Li-Ning, Li-Ning’s logo from 2010 to 2015

From 2015 till now: Li-Ning not only failed to attract young people but also lost its existing consumers from the older generations due to its awkward transition. After several years of struggling, Li-Ning returned to its previous slogan.

It includes a subtle outline of the “Li Ning Cross” gymnastic posture and loosely depicts the founder’s initials.

Source: Li-Ning, Li-Ning’s logo from 2015 till now

Pain point 1: Hunger marketing strategy enrages consumers

The newly designed sneakers increased consumer confidence. However, due to the limited product offerings, prices are deliberately higher, even higher than internationally renowned brands such as Nike and Adidas.

The latest products are not available in Tier 3 to Tier 6 cities, which caused some consumers to be left out.

Li-Ning’s extensive use of hunger marketing

Source: Daxue consulting and Double V. Training & Consultancy; China rising fashion brands report, designed by Daxue Consulting, Li-Ning’s extensive use of hunger marketing

Pain point 2: Underinvestment in research and development

Li-Ning has not invested much in research and development, which leads to the lack of capability to produce high-end sportswear. The new products always follow the previous designs, showing the insufficient of creativity.

Source: Daxue consulting and Double V. Training & Consultancy; China rising fashion brands report, designed by Daxue Consulting,  Li-ning’s lack of investment in R&D

Pain-point 3: Too closely tied with national emotions

The brand over promotes national sentiment as one of its marketing points which has caused resentment on social media.

Source: Daxue consulting and Double V. Training & Consultancy; China rising fashion brands report, Li-Ning’s nationalist marketing

What brands can learn from Li-Ning’s marketing strategy

  • Through digital transformation, Li-Ning has been able to move towards an efficient way to operate physical stores, making e-commerce their second-biggest distribution channel.
  • Li-Ning re-branding and focus on Chinese designs (Guochao) has allowed the sportswear brand to attract more domestic consumers.
  • Co-branding with other domestic brands helped Li-Ning gain brand exposure among other brands’ fans.
  • Nonetheless, hunger marketing and a marketing strategy too tied with national  emotions have attracted negative comments from Chinese consumers.
  • Li-Ning’s lack of investment in R&D have lead to highlight the brand’s incapability to produce high-end sportswear.

Li-Ning’s turnaround

There is a fine line between losing brand consistency and rejuvenating the brand when renewing brand image. Li-Ning is a local Chinese sportswear brand with 30 years of history, while it was stuck for several years for positioning the brand as more international rather than local, which in a way contradicted Li-Ning’s original brand image. By looking for fashion inspirations from Chinese culture, Li-Ning found its way to win Chinese consumers back.

For foreign brands, it important to understand the Chinese market and find a balance point where the extent of brand localization is just enough so as to cater to local consumer habits and still maintain its international appeal when entering and rebranding in the Chinese market.


See our report on Li-Ning’s China market strategy

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