Li-Ning Aiming Global
Does Li-Ning have what it take to compete in the U.S. marketplace?
by Franklyn Calle
Li-Ning, an athletic apparel company that originated in China, has been around for two decades. Renowned Chinese Olympic gymnast Li-Ning launched the company in 1990, offering a variety of gear to choose from. Since its inception, Li-Ning has gradually gained notoriety and has become a household name in many different sectors of sports in China. Urban sports is probably the most, if not one of the most popular styles in China at the moment. The robust sports life product line, which is more casual and off-court intended, has seen its share of elevating demand throughout the years. Li-Ning has also been doing strong in other fields such as badminton, running, and women’s fitness line. But despite the good showings in their homeland, operating over 6,000 stores in China, the company hasn’t really been that well-known outside of Asia—something the brand sought out to change in 2010.
We began to hear about Li-Ning right here in America back in 2006 when Damon Jones, one of the top sharpshooters at that time and a member of the Cleveland Cavaliers, signed a two-year endorsement deal, becoming the first current American NBA player to sign with a Chinese sportswear company. A few months later, Shaquille O’Neal agreed to a five-year deal with the company. Then in December of that same year, Chuck Hayes of the Houston Rockets decided to get onboard as well, making it three signed endorsers in the year 2006. Also in ’06, Li-Ning agreed to a partnership deal with the NBA in a marketing strategic collaboration.
In 2007, Li-Ning announced the signing of a sponsorship agreement with Argentina’s National Basketball team—the company has also equipped the Spanish national basketball team since ’04. The deal put Li-Ning in charge of dressing two of the most competitive nations in the world of basketball. Argentina took home the gold medal at the ’04 Olympics in Greece before finishing with a bronze medal at ’08 Olympics in Beijing. On the other hand, Spain won the 2006 FIBA World Championship held in Japan, and followed it with a silver medal performance at the 2008 Beijing Olympics.
In the fall of 2008, Li-Ning signed Baron Davis to a five-year endorsement deal. Davis, whose deal with Reebok had just expired in the summer, became the company’s fourth American NBA player to join the Chinese sportswear company. Toronto Raptors guard Jose Calderon is also a member of the Li-Ning sponsorship family.
But despite having signed all of these guys, Li-Ning didn’t really have a place in the US market since none of the sneakers were being sold by US retailers, making the general public’s access to them very difficult. But all that changed this year when Li-Ning opened its first American retail store and showroom last winter (SLAM was at the “launch party”). The company showed no fear of the “Big Two”—Nike and adidas—and decided to put its U.S. headquarters right on their backyard. The opening of Li-Ning’s U.S. offices in Portland, OR was a bold move indeed. The Portland-metropolitan area is home to the biggest sports apparel companies out there. Nike, as well as Columbia Sportswear Co., have their headquarters in Beaverton, while adidas has their U.S. headquarters inside the city of Portland. Li-Ning’s flagship store and showroom were also placed in Portland.
This summer, Li-Ning signed a sponsorship deal with the Joventut Badalona basketball club in Spain, which also happens to be the team Ricky Rubio plays for. A few weeks later, on August 13 to be exact, Li-Ning launched their line at Champs stores on the west coast, as well as on eastbay.com, officially putting their products on the U.S. market.
And then just a few day later, Li-Ning officially signed the 2nd overall pick of the 2010 NBA Draft, Evan Turner, to a long-term endorsement deal. The move made the Ohio State-standout and 2010 recipient of the Naismith Award, as well as the John Wooden Award, the face of the company’s basketball division. “This is truly a game-changing moment for the Li-Ning brand,” said Li-Ning’s Brand Initiative Director for Basketball, Brian Cupps, at the time. “Adding a supreme young talent like Evan Turner sends a message to the global basketball community that Li-Ning basketball is committed to being a player on the global stage.”
So what now ? Where does Li-Ning go from here? The basketball sneaker industry is as cut-throat as it gets. In the last few years we’ve seen sportswear companies spend money while creating a basketball division in hopes of cashing in on it, only to have to shut it down later on after not being able to compete with the well established brands. Does Li-Ning have a legitimate chance to stay competitive with the likes of Nike, adidas and Jordan?
After talking with Cupps at the Golden Hoops Classic in late August, a high school all-star game that featured some of the best players in the northeast, and keeping in touch with him in the weeks that followed, I figured he would be the best one to answer all these questions…
SLAM: What do you feel Li-Ning brings to the table that’s different from the brands that are already out there in the market?
Brian Cupps: I think that at Li-Ning we have a cool story to tell. We are a 20-year-old company in China. The number one Chinese brand and founded at a when there was no one else there, off the reputation of Mr. Li Ning, the most famous Olympic gymnast. We’ve been around for 20 years but we’re now re-launching the brand in China and becoming more youthful, and now we’re bringing the brand to the U.S. I think the time is just right. The focus is picking up back on basketball with a lot of people jumping back in. Our competitors and the competitor’s field are getting that people are now actually looking for an alternative. Because we have such a strong foundation of a business in China, I think that gives us an opportunity to be very aggressive and take some risks here where maybe others can’t because they are so reliant here in the U.S. But for us is really open grounds; we’re going to learn a lot and we’re going to make some mistakes but we’re going to bring something new, fresh, unique and just have fun with our gear, and do things like today (Golden Hoops) where we really get to our core consumer and that’s what it’s about; getting our stuff on the top ball players in New York, in the country and globally for that matter.
SLAM: How do you get the youth’s attention when you’re the new kid on the block? Especially when most teenagers in the US have grown up in the Nike/ Jordan Brand golden era?
BC: I think the most important thing is getting our product on the kids because at the end of the day the kids are our bosses, they tell us what they want and what to do. We certainly have to understand the marketplace and understand the business but kids are brutally honest. If the sneakers are not cool or if they don’t like it, they’re going to tell you. So this is real time feedback from the guys who are going to make a living off their feet, and this is how they get to college or to the next level. So this a chance to get them to wear your product, talk to them and show them some products that are coming down the line, and get their feedback on what they think about the brand. You’re not going to get that anywhere else. This is as great of a focus group as you can get. This is a good way to get them talking about it but we are learning as much from them as we’re teaching them from our branding efforts.
SLAM: Is sponsoring a tournament like Golden Hoops (uniforms on the left), where only the best high school players get invited, a good way to get your brand into the homes of the game’s rising stars? Can we expect for Li-Ning to begin sponsoring other events?
BC: I think we will continue to expand our presence but we are going to be smart about it. This was a great opportunity because it can be a beachhead event. It’s at a great time when there is not a tremendous amount of basketball happening so our exposure can be strong. Launching the brand in the U.S. right now in basketball and this being resurrected is something that has great history; I think that’s a great opportunity to bring an introduction and resurrection together. We, along with the guys running the Golden Hoops event have a big vision for what Golden Hoops can mean and be, not just in New York but also on a global scale.
Photo on right side: Defend Mid (Available in December at Champs and Eastbay.com)
SLAM: Is it fair to say that by launching the brand slowly in the US, you have a better chance of positioning yourself better to against your competitors?
BC: I don’t want to say it’s slow. I think it’s about being strategic and being smart. There is a lot of people coming in and throwing a lot of money around. Everybody got something to buy and sponsor. For us, it needs to be owner-able, unique to Li-Ning and something that gives us a point of difference in the marketplace. If we just try to do everything our competitors are already doing and try to outspend them, then that’s a losing proposition for us. We want to look at it and say, “what is our DNA as a brand for Li-Ning? And does it fit that and is this something that we can own and makes of different?”
SLAM: How is Li-Ning seen in China?
BC: In China, with the 20 year history and being the first athletic footwear and apparel brand in the history of the republic of China, we’re a very nationalistic brand with a very strong following. Mr. Li-Ning himself resonates with the people there. I think as we’re trying to get younger and more relevant to the youth, the goal is to take what Mr. Li-Ning stood for, and that is his achievements through sports in life, and give young kids the understanding that our brand is about providing opportunities for youth in China—and now hopefully globally as we bring the brand to other markets like the U.S.
SLAM: In what ways can Li-Ning capitalize from China’s fast-paced growing economy, as it surpassed Japan as the world’s second largest economy behind the United States earlier this summer?
BC: I think is no secret that it’s the next superpower from an economic perspective. I think it’s still growing. I think there is still a thirst for global brands in China. I think that’s why we’re expanding ourselves. We have the vision to be global and we’ll bring them unique designs, partnerships and opportunities that as they look at the world with bigger opportunities, Li-Ning is also looking at it that way. But I think it creates an enormous opportunity in a category like basketball particularly, where the NBA has continuously expanded their efforts there. Basketball is only going to continue to gain momentum and popularity in China so I think that is well for us as a brand.
Photo on left side: Conquer Mid (Available in February at Champs and Eastbay.com)
SLAM: What exactly is in high-demand right now in China in regards to sportswear?
BC: I would have to say right now the market seems very focus on sports life but it’s trending on the performance side. I think consumers in China are very much like consumers in the U.S. in that they are looking for something unique, something that speaks to them, and certainly customization is big, so that’s something we’re exploring for the future. In sports, I think it’s indigenous. A ball player in China thinks the same as a ball player in New York. They have the same mentality although they may want a little tweak on their products. But that’s how we figure it out from a regional standpoint.
SLAM: How is the launching of the brand in the US going?
BC: We just launched the brand with basketball in Champs and Eastbay.com on Friday, August the 13th with the Doom Mid, which was the first introductory shoe worn by Baron Davis. About 70 doors on the west coast primarily. The launch has been very successful, with very positive feedback from our retailers. We’re in the early stages on launching the brand in the States here but till date, the feedback have been very positive from a retail perspective as well as from a consumer and actual ball players perspective. We’re very excited about the future and how we’re going to look to grow the brand here and our relationships from a retail level, athlete level, or new event level. That’s kind of where we’re looking down the line but we’re just getting started here. It’s very exciting for us.
Photo on bottom right side: Classic RB Mid (Available in China)
SLAM: How do you plan to take on the likes of Nike, Jordan and adidas?
BC: I think at the end of the day we have to certainly give our respects to our competitors and recognize that they have set the bar from which we have to judge our levels. But we have to determine what’s the right strategy for Li-Ning and what’s the appropriate place for us to be from a product, brand, and athlete standpoint in the marketplace. We’re not going to try to be anybody else other than Li-Ning as a brand. I think that if we focus on ourselves then hopefully we’re are aggressive enough that we can put those brands in a position where they have to at some point kind of pay attention to what we’re doing. But we are not going to make any assumptions to say we’re just going to try to outdo them in what they have done for years. We are going to take a unique approach. I think that’s how they were successful back in the day, by being aggressive and doing something unique that the market had never seen and I think it’s our time to try to do that. And I think that will ultimately determine our fate and not whether we can outdo any of our competitors in something that they are very successful at.
SLAM: With the NBA looking to expand its league to China, how big of a sport is it in the republic and how does it benefit Li-Ning?
BC: It’s the biggest team sport in China and it’s a very social sport there. Because of the one-child policy, a lot Chinese consumers don’t have siblings, so basketball is a great way for them to socialize with their friends. It gives us an opportunity to connect with the youthful consumers in China and the research shows that basketball players not only play basketball but they have a tendency to be runners, and they have a higher tendency to play badminton because they are usually the best athletes. So by putting large money behind basketball we’re not just expanding in the basketball category, were growing our brand with the youth in all categories.
SLAM: In the last few weeks, reports have spread that sneaker executive and basketball guru Sonny Vaccaro has been in talks with some brands, including Li-Ning about possibly joining and helping broaden their basketball division, where does Li-Ning stand in all this?
BC: While as a brand we have great respect for what he has done with our competitors such as Nike, adidas, Reebok and most recently Under Armour, we have not had any discussions with Mr. Vaccaro about partnering with him. We will continue to evaluate all sports marketing and grassroots opportunities presented to us within the US on a case-by-case basis and determine whether they fit our overall global strategy. We are committed to our new brand revitalization and hold true to our new brand slogan “Make the Change” in all our brand and sports marketing efforts.
SLAM:Brian, thank you for your time and good luck. Readers, keep your eyes on SLAM Mag and SLAMonline.com as we’ll have lots more coverage of Evan Turner and Li-Ning in the coming months.