"Li Ning" trapped in "post-90" dilemma: the brand is high-end

Li Ning, who was distorted by the positioning of high-end brands, backfired under the influence of overseas brands and local brands. Li Ning Co., Ltd. expects the 20-year-old gorgeous transformation to be a Waterloo.

Li Ning announced at the just-concluded ordering meeting that according to the calculation of wholesale shipments, the order amount of Li Ning's products in the second quarter of 2011 decreased by approximately 6% from the same period in 2010. As soon as the news broke out, it triggered a shilling in the stock market. Li Ning's share price plunged by nearly 16%, setting a biggest one-day drop since the listing of Li Ning in 2004, and the market value evaporating more than RMB 3.5 billion in a day.

Facing the disillusionment of sales growth, brokers sang Li Ning’s prospects, arguing that Li Ning was already caught in the brand positioning and sales crisis.

"Our view on the outcome of this fair is that the retail environment of the sporting goods industry has obviously encountered more pressure this year," explained Zhang Zhiyong, chief executive officer of Li Ning Group Company.

However, according to CCB International Analyst Chen Zhaochang, Li Ning's ordering meeting in the second quarter of 2011 was not performing well, not the entire sporting goods industry.

Compared with the 6% drop in the amount of orders for Li Ning, another domestic sporting goods brand, Hong Xinger, had an order amount of 849 million yuan*** in the spring/summer 2011 shopping fair, up 24.9% year-on-year.

"The industry has its own growth. It is Li Ning who did not do well himself, making it difficult to compete with other companies in terms of market share," said Chen Zhaochang.

Some industry insiders believe that Li Ning's sales crisis mainly stems from the brand strategy after the rebranding in June 2010.