It’s hard to imagine a better moment for guerrilla marketing. At the opening ceremony for this summer’s Olympics in Beijing, Li Ning, founder of China’s leading sportswear firm of the same name, flew through the air to bring the Olympic torch to light.
Investors took note and Li Ning – which was not an official sponsor of the games – saw its Hong Kong shares jump by 3.4% on the next day of trading.
But Terry Rhoads, managing director of sports marketing firm Zou Marketing in Shanghai, said the real game changer for the brand would have come if the Spanish basketball team – dressed in Li Ning uniforms – had defeated the US and won the gold medal.
“To me that would have been a watershed moment for the brand. They came within a whisker of beating the ‘Redeem Team,’ and it would have thrown Nike for a loop,” he said.
Zou Marketing estimates that Li Ning held a 10.7% share of the China’s US$5.9 billion sportswear market in 2007, making it the top Chinese brand. Nike and Adidas head the overall list, holding 16.7% and 16.4% respectively.
But Li Ning’s ambitions stretch beyond the mainland. The company has opened stores in the Netherlands, Belgium and Luxembourg, and by 2018 intends to raise its overseas sales to 20% of total sales, from 0.8% in 2007.
Shaun Rein managing director of Shanghai-based China Market Research, believes that global sponsorships will be vital to Li Ning’s future success.
“Li Ning has always positioned itself as the best Chinese brand for sports apparel, and going forward I’m not sure that’s the right positioning,” he said.
“They need to sponsor more of these international sports teams to establish themselves as not just a Chinese brand, but a global player.”
But Li Ning faces a daunting challenge in competing against companies with the global reach of Nike and Adidas. These companies can draw from R&D teams across the world to develop the next blockbuster product.
“You have to innovate to beat Nike and Adidas. You can stay close by copying them, but if you want to land some blows and hurt them you have to innovate,” Rhoads said.
To this end, Li Ning has opened a research and design office in Portland, Oregon – home to the likes of Nike, Adidas America and Columbia – in the hope that the city’s thriving cottage industry of sportswear experts and designers may help bring Li Ning to the cutting edge.
“A research and design office in Portland is a way of staying close to the heartbeat of the sector,” Rhoads said.