Last June, Li Ning Co. underwent a brand reshaping. At the Li Ning product ordering meeting in the second quarter of this year, the average retail price of Li Ning's clothing and footwear products increased by 8%, while the order quantities decreased by more than 7% and 8% respectively (the order volume increase for the same period in 2010 was 22%), and the total order amount dropped by about 6%. The low order volume, combined with negative sentiments from major brokers, caused Li Ning's stock to plummet by 15.80% on December 20th, marking the largest single-day drop since its listing in 2004. The company’s market value evaporated by over 3.5 billion Hong Kong dollars in one day. In stark contrast, another domestic sports apparel brand, Anta, reported an order amount of 8.49 billion RMB for their spring/summer 2021 ordering session, representing a 24.9% increase year-over-year. This clearly shows that Li Ning's difficulties are not due to industry downturns but rather due to ineffective brand communication, which has left them vulnerable on all fronts.
### One: Do Not Attempt to Change Consumers' Established Brand Perception
The essence of "Li Ning" is centered around its founder, Li Ning, with the company and its products extending as a collective impression. Athlete Li Ning experienced the peak of his career in 1984 and a somber retirement in 1988. The dramatic reality and dramatization of his life have endowed the name "Li Ning" with epic brand charm, leaving a deep imprint on the hearts of those born in the 70s and 80s.
As a professional sports apparel supplier primarily using "selling celebrities, selling dreams" as its main communication method, Li Ning Company targeted customers aged 13-26 from the post-90s generation, thus positioning itself as "post-90s Li Ning." However, for consumers, the inherent character of the Li Ning brand is too different from the personality traits of the post-90s generation. "Li Ning" is the spiritual idol of those born in the 70s and 80s, symbolizing "optimism, perseverance, a fighting spirit, and high morale." On the other hand, the typical characteristics of the post-90s generation include gossiping curiosity, group loyalty, uniqueness, and obedience. It is easy to imagine that when "post-90s" encounter "post-90s Li Ning," the established brand perception would make the post-90s shrug and walk away; meanwhile, those born in the 70s and 80s would feel completely abandoned by Li Ning.
Li Ning Company's greatest core asset is not its annual revenue growth rate of over 20%, nearly 1 billion profits, or its network of 7,900 retail stores and tens of billions of annual revenue. Instead, it is the widespread recognition and high reputation of Li Ning's personal brand. Consumers buy Li Ning products essentially because they are paying for the Li Ning spirit, not for "post-90s Li Ning." The company's core task should be the protection and management of the "Li Ning" brand, not repeatedly shouting out "post-90s Li Ning." The personality traits and charm of "Gymnastics Prince" Li Ning form the "core value" and "ultimate differentiation" of Li Ning Company and its products, solidifying into the company's central and enduring competitive advantage, becoming something Nike, Adidas, and Peak can never replicate or surpass! But what exactly is "post-90s Li Ning"? It seems that even now, no one can explain it clearly.
Marketing theory proves: First, consumers only accept things consistent with their existing knowledge and experience. The concept of "post-90s Li Ning" conflicts with consumers' established brand perception, making it difficult to evoke rational identification and emotional resonance, thereby significantly reducing the effectiveness of communication. Second, advertisements attempting to change consumer perceptions are often counterproductive or even fruitless. The only outcome of "post-90s Li Ning" is non-recognition by the post-90s and alienation of the 70s and 80s generations.
### Two: Brand Positioning Must Be Implemented at the Product Innovation Level
Brand communication emphasizes the combination of abstract and concrete elements. Abstract refers to brand positioning, and concrete refers to product innovation. Without substance, it cannot last long, and without abstraction, it remains unknown. In the 1980s, Nike rose rapidly in the U.S., not only through Michael Jordan's promotion but also thanks to its unparalleled air cushion basketball shoes, which became true stars in the entire basketball field and helped Nike become one of the world's largest sports goods companies. In 2003, Adidas collaborated with Japanese designer Yohji Yamamoto to launch the Y-3 series products, and in 2008, Nike launched its first Nikesportswear series that emphasized artistry and modernity over athleticism. All product innovations were closely aligned with their brand positioning. From 2006 to 2008, China Motion demonstrated its "sports, fashion, sexiness, taste" positioning by integrating fashion and leisure elements while preserving the essence of sports, giving Kappa a bold logo and striking colors, ultimately achieving a brilliant result of 96.7% sales growth and 111.3% profit growth annually.
Discussing single-item communication strategies from the perspective of "post-90s Li Ning," I believe precise brand positioning is just the first step in brand communication. Micro-level product support is crucial. Nike implements independent product strategies for each region’s terminal materials and product design to cater to different target groups’ perceptions of the Nike brand. After announcing its brand reshaping, Li Ning did not conduct targeted research and development on its product lines. Li Ning COO Guo Jianxin stated, "Li Ning hopes to break through in fashion but will not abandon its leading advantage in sports product professionalism." Changing the logo, altering the slogan, and holding a press conference—does this constitute so-called "brand reconstruction"? Brand building requires systematic and thorough product design to support it. For "post-90s Li Ning," there should be several groundbreaking exclusive products, combined with celebrity endorsements, advertising campaigns, and terminal promotions, to form a powerful brand synergy.
Products are the foundation of brand communication. Even successful enterprises like Uniqlo can suffer significant consequences if they neglect their products. The founder of Uniqlo, worth $9 billion, Tadashi Yanai, admitted that last year, producing large quantities of unnecessary fashionable clothing led to inventory buildup, causing raw material storage shortages, which resulted in continuous revenue declines of at least 25% in Uniqlo stores open for over a year since September last year. Zara and H&M took this opportunity to invade Uniqlo's home turf. Now, Zara has 63 stores in Japan, and H&M has around 10. Uniqlo is truly besieged inside and out.
### Three: Promotion Models Must Adhere to the Principle of Combining Differentiation and Focus
The promotion model is key for sports apparel products. While maintaining consistency between brand positioning and product innovation, the promotion model must simultaneously pursue differentiation and focus: differentiation ensures survival, while focus ensures ultimate branding. These two principles are unified throughout the entire promotional process. Selecting a promotion model requires careful analysis of the company’s resources and overall strength compared to competitors, allowing flexibility according to needs.
Sports apparel brands generally use sports events and celebrity endorsements for promotion. Professional sports brands such as Nike, Adidas, Li Ning, and Peak mostly adopt a "point-to-surface" promotion method. By sponsoring the Olympics, national teams, and professional athletes, they aim to influence other professional athletes and amateur sports enthusiasts, eventually transmitting brand marketing power to the mass market. Conversely, fashion sports brands like Kappa adopt an opposite "surface-to-point" promotion method. Through entertainment marketing and fashion marketing, they focus on the mass consumer market while actively penetrating the professional sports sector. According to statistics in 2008, Li Ning spent approximately 17% of its total sales on market promotion annually, while Kappa spent only around 7%. The two different promotion methods determined their vastly different cost-sales ratios and profit levels.
The final step in promotion is advertisement representation. The TV advertisements for "post-90s Li Ning" showed little differentiation. New celebrities like Lin Dan, Isinbayeva, and Shaquille O'Neal are neither part of the post-90s generation nor effectively leveraged in deeper promotions based on their characteristics. The entire advertisement production was superficial, seemingly interchangeable with any other clothing brand. I believe Li Ning's marketing approach should be the most classic celebrity endorsement marketing: integrating the personal brand of celebrities into the corporate and product brand, guiding consumer appreciation towards purchase. Deeply exploring Li Ning's brand potential for refinement, elevation, and fixation, combined with the emotional trends of the post-90s generation, successfully grafting it onto new celebrities like Lin Dan, Isinbayeva, and Shaquille O'Neal. Achieving a result "originating from Li Ning but surpassing Li Ning" is the only path for the Li Ning brand and the fundamental way to win over the post-90s generation.
Conversely, Kappa is a prime example of differentiation and focus. Differentiation is evident in avoiding direct competition with financially strong brands like Nike, abandoning the professional sports market, and attacking the fashion sports market. Focus is reflected in concentrated sponsorship in the fashion and entertainment sectors. During the 2006 FIFA World Cup in Germany, China Motion sponsored the "Dream Boat Team" composed of Chinese celebrities. Members of the Dream Boat Team wearing Kappa sportswear provided post-match commentary on nationwide television programs after each game, greatly showcasing the two key elements of Kappa's product mix: "sports" and "fashion," achieving good market effects. China Motion also chose international brands with similar brand philosophies (such as Pepsi and Citroën) for joint brand promotion activities, sponsored Huayi Brothers movie stars, TV programs, or hosts, achieving rapid increases in Kappa's brand awareness and reputation at low cost and high efficiency.
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3. Sufficient authorization does not mean turning a deaf ear.