Six Reasons For Li Ning Co'S Future Development

In March 19th, Lining announced 2014 fiscal year results, a loss of 781 million yuan, third consecutive years of losses.

The good news is that there are already solid financial data showing that Li Ning Co has gone out of the mire of declining performance, and the dawn of losses in 2015 has already emerged.

Li Ning Co's losses in 2014 mainly occurred in the first half of the year. In the second half, it actually lost only 196 million yuan.

Judging from the order meeting, the Lining order meeting (excluding subsidiaries) recorded a year-on-year growth in the five quarter of 2015 until the third quarter of 2015. The latest quarter recorded a year-on-year growth of over 15%; in addition, Lining's same store sales in the second half of 2014 rose to positive growth, and the number of units increased in the fourth quarter of 2014, which all contributed to a higher growth in revenue, especially in the second half of the year.

In 2014, Li Ning Co revenue returned to growth track, increasing by 16% to 6 billion 730 million yuan per year.

Looking at the future of Li Ning Co, there are six simple reasons:

1, complying with public opinion, Lining has to shoulder the challenge.

After Korean American Jin Zhenjun resigned as chief executive of Li Ning Co, there had been news that Lining would continue to invite an old foreigner to take charge of Li Ning Co.

However, insiders pointed out that the mountains of the Li Ning Co are in the wind, and only Lining has the potential to integrate all aspects of power to achieve "heart to one mind, strength to one place".

Lining seems to be listening to the voice of the company inside and outside. The latest public statement of Li Ning Co is: "the Board believes that Mr. Lining will be the executive chairman and acting chief executive officer, which can provide a stable and consistent leadership for the group and is especially conducive to the planning and implementation of the business strategy of the group.

The board also believes that the current arrangement is in the interests of both the company and its shareholders. "

For sporting goods companies, Lining, who holds the world championship title, is the best image endorser and core asset. Other companies have money and competent managers.

Before falling into the mire of losses, some Li Ning Co executives did not catch cold with some distributors.

Many of these distributors are single store businesses, with low efficiency and low retail operation level, aging stock structure, old store image, impact on earning capacity, and risk of closing business when operating losses.

And Lining's goal of high-end pformation is "no match".

But the result of Lining's pformation to the high end is that he has not become "rich handsome". The original grass-roots market has also lost a lot. If we want to stabilize the situation, we must have a good relationship with distributors.

In consolidating the cooperation with distributors, the Li Ning Co has established a store manager website and multiple WeChat platforms to communicate with store managers, communicate and share business initiatives, retail knowledge and future trends. Store managers can also directly report the operation, problems and product needs of the store, upload photos and follow up the display of merchandise in the store.

The Li Ning Co has also launched a "resource management platform", and discovered inventory overstock / shortages of group warehouses, distributors and Affiliated Companies, and made corresponding decisions such as adding orders, distributing goods and promoting clearance.

For those products that are unsalable for the season, the Li Ning Co voluntarily let the channel sell these products to the discount stores to sell shelves, and sell shelves for the best sellers.

This is the best way to teach distributors how to make money, and the relationship between Li Ning Co and distributors will be better.

3, the direct increase in stores, the formation of "imperial forest"

As of December 31, 2014, the number of shops in Lining regular stores, flagship stores, factory shops and discount stores was 5626, a 289 decrease compared with December 31, 2013.

The reduction is mainly the shops of distributors and distributors, and the number of sales outlets directly under Lining has increased a lot.

In 2014, the number of Lining brand outlets was 1202, an increase of 29.8% over the previous year's 926.

In addition to setting up a direct store, Lining also incorporated many retailers' retail assets.

Last year, Li Ning Co acquired 5 dealers in Heilongjiang, Liaoning and Zhejiang, which cost nearly 100 million yuan.

With the establishment of a large number of Direct stores, Lining's control over sales channels has been greatly strengthened.

4, bite ADI, retail channel differentiation

Gao Jiali, managing director of Adidas Greater China, said that the needs of Chinese consumers varied and the market situation was complex, requiring different coping strategies.

Adidas therefore boldly "eat crabs" in the country, and opened up sub stores such as footwear stores, women's stores, etc., and do not know the same big and all store mode.

A similar channel layout strategy has also been established.

Lining's sales department, in collaboration with product departments and distributors, divides shop categories according to consumer demand characteristics, improves shop classification planning, and carries out differentiated group cargo planning according to different shop groups, which greatly improves the accuracy and effectiveness of ordering.

Lining also carried out further business segmentation and differentiation work, classified the store according to product category.

According to category strategy, store management is classified according to factors such as city level, business district characteristics, consumer classification, sports / sports life and so on.

Wang Xin, global partner and chief executive of Greater China, said Sullivan, with the continuous development of China's social economy and the changing concept of Chinese consumers, the economic structure of Chinese consumers has also given them different purchasing power, which has become the complexity of the Chinese market.

Therefore, sports brands should not adopt a strategy of one size fits all in the face of the Chinese market. The channels must be diversified and aimed at different consumer groups.

This is even more prominent in a second tier city. Because of the complexity and diversity of consumer demand in a second tier city, sports brands must adopt a more detailed market strategy to excavate and meet these needs, so as to achieve their own growth.

5, sports Plus Fashion

In recent years, with the fast fashion influx, the change of Chinese consumers' enthusiasm.

Today, the enthusiasm of Chinese consumers has shifted from sports products to fashion and leisure.

Multinational brands and Chinese brands all have a good harvest in sports and fashion. The former such as Adidas, the latter such as XTEP, Lining are more familiar with professional sports products.

Lining is now adjusting his original strategy.

The Li Ning Co has opened up a LNC (Lining Collection) shop channel for the collection of high-end sports activities. The main force is to expand the sports consumption market of middle and high-end customers.

The product design is dominated by Korean designers, signing Jessica, a former maiden member of the Republic of Korea, as spokesperson, and launching a cross border goods portfolio with image and style to attract consumers who are in pursuit of fashion.

At present, more than 10 shops have been opened, and their performance in the fashion shopping arcade is good. In 2015, there will be a larger shop opening plan.

To evaluate Lining's future, we must connect with the Internet.

Similar to other enterprises, in the early days, the Internet was only a supplement to Li Ning Co's sales channels. Now, this idea has been adjusted.

Li Ning Co's e-commerce business recorded a notable growth in 2014, with total revenue rising by 48% and direct store revenue by 85%.

Lining doubled the size of Tmall's flagship store and Jingdong's flagship store on the main business platform, selling 77 million yuan on double eleven, and second in sports / outdoor products over Nike and Adidas, more than double the number of other local competitors.

Lining said that at the beginning of 2015, the companies in the Internet field, such as man Wei and Xiaomi bracelet, had begun to have deep contact with each other, and the two teams had activated various kinds of cooperation ideas on their respective advantages and resources.

Its products will be available in early April, and will promote online offline marketing with digital marketing and media strategy.

Lining has also released a strategic agreement with the millet ecological chain enterprise and the millet Bracelet Founder Technology, to jointly build a new generation of smart shoes and explore the health field of big data.

Lining hopes to make use of the advantages of his products and technology, and cross border cooperation with more innovative and technological enterprises, and provide products and services that are more in line with modern sports lifestyle and consumption patterns, making them a driving force for the company's new round of growth.