Lining: From "Shipbuilding" To Sea To "Borrow A Ship" To Sea.

Lining, chairman of Li Ning Co

According to the world clothing shoes and hats net, in the afternoon of July 21, 2017, American NBA star Wade came to the headquarters of Li Ning Co (02331.HK) in Yizhuang, Beijing, in the drizzle.

Lining headquarters is like a sports park. There are plastic runways everywhere, office buildings and indoor natatorium.

Wade came to see his sponsor.

Lining, founder of the company.

In 1990, Lining, Prince of gymnastics, founded the Li Ning Co. Today, it is one of the leading enterprises in China's sports and outdoor industries.

Over the past decade or so, Lining's international road has been mainly sponsoring sports clubs and Wade stars around the world, hoping to promote the internationalization of the market through brand internationalization, but with little effect.

Over the past decade, the contribution of Lining's overseas revenues to total revenue has been hovering between 1%-3%.

Lining announced ten years ago that by 2018, overseas revenues would account for 20%.

But Lining reported that in 2016, Lining accounted for only 2.6% of the revenue from the international market.

In the face of fierce competition in the Chinese market, Lining contracted the internationalization strategy in 2012 and refocused on the Chinese market.

Lining shut down many overseas stores and handed over overseas markets to local distributors, which was equivalent to giving up the initiative to attack the international market.

Until 2016, Lining accidentally discovered that with the help of Ali fast selling (AliExpress),

Its cross border B2C platform can penetrate into the market which was hard to enter before, so Lining started the international journey again.

According to the financial report, Lining's overseas income in 2016 was about 200 million yuan, an increase of 36.4% compared to 2015.

Behind this growth, there are both exchange rate factors and the contribution of fast selling.

But compared to Lining's total revenue of 8 billion 15 million yuan in 2016, the contribution of overseas income is still negligible.

Since 2003, Lining has been the head of Lining international business.

He told the Southern Weekend reporter that many of the past sponsorships were pure money, but now many sponsors can make money.

For example, after several times of live broadcast on Wade, Lining immediately sold many smart running shoes at the official flagship store.

Bai Feng Tao said that fast selling is just a new channel for Lining. Lining's next step is to lay out O2O strategy internationally.

What Lining values is the value of fast selling to upgrade Lining's supply chain.

Bai Feng Tao said that at present, Lining has a large number of fans on the fast selling platform. Many of these fans are foreign opinion leaders and fashion designers. They are very familiar with the fashionable colors and styles abroad. They can help Lining improve design and production in a timely manner, establish a fast response supply chain, and even achieve the goal of selling products.

From "shipbuilding" to sea to "borrow a ship" to sea

Lining's internationalization began in 2001.

Lining was already China's first.

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That year, Lining opened a brand store in Spain.

Over the next few years, Lining's internationalization was basically a "shipbuilding" sea going mode, that is to set up branches abroad, set up exclusive stores or authorized distribution stores, and sponsor some foreign sports clubs and athletes.

Just as Lining went to the international stage, the mainland market of China as a base met fierce competition. The high-end consumers chose Nike and Adi, and the middle and low end consumers chose other domestic brands.

Lining was in a state of high inventory and deficit.

In 2012, Lining stopped sponsoring activities in almost all international markets and re focused on the Chinese market.

According to Bai Hui Road, a dealer in Spain told Li Ningfa mail that due to the European debt crisis and weak stores, Li Ning Co hopes to provide 2 million euros of financial support.

Lining calculated that the money could not keep the shop alive, so he closed the shop.

After focusing on the Chinese market, Lining's internationalization is in a state of decline.

But many domestic dealers have been stationed in speed sell, 00 scattered to sell some Lining products overseas.

Lining maintained a wait-and-see attitude towards these behaviors.

Until 2015, speed sell Lining invited to participate in a flash buying activities, Lining tried to test the mentality, found that actually sold more than 2000 pairs of shoes, so that Lining saw the value of fast selling channels, the two sides began to discuss the possibility of cooperation.

In October 2016, Lining officially opened the express flagship store.

Speed sell cleared the shops of Lining dealers on the platform.

Lining first made a lot of stock preparation, and selected the source of goods sold in fast selling way, and dealt with the tag and instructions in foreign languages.

In March 2017, shops began to operate.

In the past 4 months, Lining has sold about $100 thousand a month on fast track sales.

Among them, the Russian market has the largest contribution to sales, up to 40%, followed by Israel, Ukraine, Spain, the United States and Chile.

"This performance is far ahead of our expectations, not to mention the absolute amount is very small, we need to know that once the electricity supplier sales start growth, generally three digit growth rate."

Bai said that he raised the sales target of Lining in this year, from $1 million to $1 million 500 thousand.

Although Lining did a good job in fast selling, fast selling made little contribution to the sales of Lining international business.

Bai said that Lining's international sales volume is expected to be around us $35 million this year, and it is expected to contribute 1 million 500 thousand US dollars, equivalent to 1/23.

But what Bai pays more attention to is the "empowerment" value of Lining's internationalisation, which is quick to sell. As soon as it is tested in fast selling, it will soon be able to know which countries the users want to buy what kind of Lining products.

He accidentally discovered that in some markets where Lining could not get in in the past, he was able to sell quickly.

For example, at present, Lining sells 2% of the sales from the Chilean market which Lining has never set foot in.

With the help of fast selling resources, Lining was able to enter the more than 200 key outlets of Chilean post and set up a commodity display area.

These outlets are huge postal outlets. If the Chilean users see Lining's products at these post offices, they can directly land on computers at the post office or download APP on mobile phones for online shopping.

"After waiting for us to accumulate data for some time, we can know which commodities are suitable for the Chilean market, so that we can advance the goods to the outlets of the Chilean post office, and users can pick up the goods when placing orders."

Said Bai.

The "online Silk Road"

Fast selling was launched in 2010, initially like the international version of Taobao, and later pformed into a cross-border B2C platform to help Chinese brands and goods go to sea, becoming more like the international version of Tmall.

For China's offshore enterprises, speed sell is equivalent to providing a "Silk Road" on the Internet.

On this silk road, Chinese brands can make use of the infrastructure services such as logistics and payment built by overseas express to quickly realize "goods spread all over the world".

Chen Gang, a senior operator of express logistics and payment business, believes that the biggest challenge for Chinese brands when they go to sea is shopping experience is not good, mainly because logistics is not fast enough.

The reason for slow logistics is that there are no direct flights, and parcels need to be pferred many times. Two, customs manual inspection procedures are cumbersome and customs clearance is slow.

Chen Gang, for example, sent packages from China to Chile, which had to stop in Europe and Brazil, and then fly from Brazil to Chile.

If the warehouse of the pfer flight is full, the parcel is likely to stay at the airport.

Even in Chile, the customs spent most of their time on manual inspection. When consumers finally got the package, they left at least 45 days.

Later, it launched cooperation with Ali to invest in rookie logistics, and launched the "worry free logistics" service, allowing parcels to fly directly from China to Chile or stop flying to Chile in Australia.

Chen Gang told the Southern Weekend reporter that packages from China to Chile could be compressed to about 40 hours in the air pport sector.

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Speed sell also shared data with Chile customs to improve the technology of package so as to reduce manual intervention when clearing customs and speed up customs clearance.

These measures reduced the delivery time of packages from China to Chile to about 23 days, but the total logistics cost increased by only about 5%.

Chen Gang said that they have measured with Lining that the cost increase is within the scope of buyers.

In Chen Gang's view, if we want to further reduce the delivery time, we need to make goods close enough to overseas users.

With the deepening of cooperation between speed sell and Lining, a lot of data will be accumulated. These data will help Lining know in advance what products and styles the overseas market needs, and then advance the preparation of products with high frequency demand, and send the goods to Chile first.

According to the goal set by Ali founder Ma Yun, China's commodities will be able to achieve 72 hours of global distribution through express sale in the future.

Besides logistics, payment is another threshold that restricts Chinese enterprises to cross border B2C business.

At the early stage of fast selling, it was cooperating with PayPal, the payment platform of eBay company.

But after the big sale, eBay soon stopped cooperation.

Fast selling then chose to cooperate with local mature payment platforms or credit card companies.

Live broadcast: new method of traffic flow

Lining used to sponsor local clubs, sports events and stars when he was making brand promotion abroad.

The disadvantage of this traditional promotion mode is that it is limited to fixed areas and lacks interaction.

And a lot of communication is done through local distributors, so the pmission effect is very difficult to monitor.

Yang Ning, an operator of fast selling industry, told the Southern Weekend reporter that Lining put a billboard in a country, but how many people saw the advertisement? Who are these people? Lining hardly knows.

Li Ning Co told the Southern Weekend reporter that the sales promotion is very simple, and how much money will be needed to achieve the desired results.

Speed sell to help Lining do integrated marketing, mainly online channels and live broadcast.

In some countries, some of the local net red or sports stars are invited to do live broadcast, such as letting net red Live Live trial of Lining's products, or allowing sports coaches to broadcast live training courses in some countries.

If there are many user interactions in live broadcast, Lining will recommend that some products be put into test in this country.

Speed sell has helped Lining find a net red live in a TV station in Ukraine. As a result, the Ukraine market soon became the third largest selling market of Lining's fast selling official store.

Zhu Tao, a senior marketing expert at speed marketing, said that the biggest challenge for Chinese brands to go to sea is that overseas users are biased against Chinese manufacturing and feel that Chinese goods are of low price and poor quality.

Through the form of live broadcast, we can display Chinese products in all directions and dispel the worries of many people.

For Nike and the ADI dominated US market, Lining used to be cautious about entering the company. It only opened a small website in the name of Wade, selling some Lining products related to Wade.

After Lining entered the fast track, he made two rounds of live broadcast for Wade, and he got a lot of American orders.

How to solve the problem of left and right hand Stroke?

After fast selling became a new channel for Lining, Lining's overseas dealers began to worry about their own interests.

In order to solve the problem of online and offline channels, the 90% of Lining's products are shoes, while the 90% of the dealers are garments.

In addition, Lining has increased the profit sharing of local distributors in fast selling countries with large sales volume (such as Russia).

Bai said that Lining's overseas distributors are rational on the whole.

"They are very clear that cross-border electricity supplier is a trend and can not be stopped."

At present, Lining is concentrating on Amending the cooperation agreements of the distributors before, and striving for the legal status of the fast selling channels.

However, fast selling can not completely replace Lining's overseas channels.

Bai said that the characteristics of shoes and clothing industry is that the needs, sizes and styles of different countries are different. For example, the size needed in Europe is much larger than that in Asian countries. So in the past, Lining was overseas, except for his own stores, most of which depended on local distributors to open up the market.

Overseas authorized dealers can design, produce and sell Lining brand products themselves, but product design and production need to be confirmed by Lining before they can be sold.

Bai Feng Tao revealed that fast selling is just a channel for Lining to internationalize and is a part of Lining's O2O strategy.

In the future, Lining's internationalization will be the O2O mode, which includes Lining's specialized stores, authorized distributors and express sellers overseas.

Lining will push forward the O2O strategy comprehensively in the second half of 2018 or the first half of 2019.

Take the Israeli market as an example, in the O2O mode, Israel's dealers and fast selling channels will coexist, but the commodities sold by the two channels are different.

Fast selling is mainly customized and personalized products, but can be stocked products to distributors.

Users can sell the goods online and sell the goods online, so that they can receive goods in second days.

At present, Lining's overseas rivals, Nike and Adi, are also making efforts to cross border electricity business. They mainly choose to cooperate with the US Amazon.

In the view of Bai Feng Road, Nike and ADI's overseas line business is larger, and the online and offline businesses' mutual pressure is even greater.

In fact, Amazon also looked for Lining to seek cooperation.

Compared to Amazon and speed sell, Bai Feng Tao found that the advantage of Amazon is that its business is mature and its traffic is relatively large. But fast selling is willing to give Lining free traffic and good advertising promotion.

Moreover, the cost of entering Amazon is higher than that of fast selling.

Bai met Tao and said that Lining was basically losing money when he found out that he had settled in Amazon.

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