Corporate struggles topped headlines in China this week, as Li Ning and Esprit gave investors fair warning that their forthcoming earnings results may be less than spectacular. Both companies were refreshingly honest about the reasons for their poor performances, with Esprit blaming “worse-than-expected operating results” and Li Ning citing China’s “total lack of athletic ability.” “We even tried marketing outfits for jump-roping,” said one company insider. People with knowledge of the matter said that, after bombing so spectacularly on his first effort to boost the brand, Li Ning will turn to a plan he knows attracts attention: Running Peter-Pan-style around the rim of gyms and stadiums.
According to a report issued by well-respected authority HSBC this week, Prada is doing a good job dealing with the challenge of “ubiquity” – industry speak for having the taint of the unwashed masses rub off on your handbags, which LV fell prey to long ago. Was that Apple’s problem in China as well? The brand recorded its strongest product launch ever last weekend for the iPhone 5, but its stock continues to struggle. According to research firm IDG, Apple’s ranking fell to sixth among smartphone brands in China, down from fourth the quarter before. Hundreds of Apple stores opened across the country this year, though only a select few were chosen by Apple as “their stores.”
Focus Media, provider of skin commercials designed to make women feel guilty they are not milky CGI creations as they wait for the elevator, announced that it will partake in China’s biggest leveraged buyout ever. A group of investors led by Carlyle Group will take the advertising behemoth private for US$3.7 billion. CEO Jason Jiang and company celebrated, as they can now exaggerate their ad network to their hearts’ content. Finally, Taobao got mixed news this week. The US removed the site from its list of “notorious” markets for intellectual property, which may help the site attract more foreign brands, but is undoubtedly bad for its pirate street cred.