Li-Ning brings new Chinese brand to the United States

For all the commentary on China's manufacturing prowess, one fact that is often overlooked is that Chinese consumer brands are beginning to become mainstream as brands in the United States and Europe. While many people know that their Apple iPhones and Nike shoes are manufactured in China, far fewer are aware of the origins of the Haier refrigerator or the Lenovo laptop they purchase at Best Buy.

Chinese consumer brands are on the rise, and this shift in power was evidenced today by the grand opening of Chinese footwear and apparel company Li-Ning's first US store in Portland, Oregon. Li-Ning may be new to the United States, but the company distributes through 7000 stores in China, and with revenues in 2008 of $983 million... it's bigger than the H&M operation in the United States. Never heard of Li-Ning in the US? You wouldn't be alone, but keep in mind... the founder (Li Ning) is the man who lit the torch at the Beijing Olympic games in 2008. So thinking of him as the Wayne Gretzky of China wouldn't at all be off the mark. 

Li-Ning's entry into the US portends bigger things: the placement of their first retail store in Portland (equidistant between Nike's and the now defunct adidas store, smack dab in the heart of athletic shoe central) heralds a new competitive threat to dominant athletic shoe brands in the United States, but also a potential learning lab for how to expand their retail and brand presence in Europe, which is currently only served by franchise stores.

At the store opening, LA Clippers star Baron Davis talked about his involvement in the design of his signature shoes, now available through Li-Ning. One of the most interesting comments he made was that most shoe companies just show up with the shoe and expect the athlete to wear them, endorse them, and like them... whereas Li-Ning designers worked hand in hand with him to make sure the shoe reflected high functionality and a unique style. 

Perhaps the most interesting "news" from the launch event was that Li-Ning had signed an agreement with Champs Sports (the 600 store banner of Footlocker) to exclusively sell Li-Ning footwear and apparel in mall-based stores for 2010. Though details were understandably somewhat sparse, the existence of both a wholesale and retail strategy for the brand bodes well for their success. It will be very interesting to see how Champs Sports positions the new brand amidst a crowded field of competitive brands (see the graphic at right for the logolist that appears on the Champs web site... Li-Ning faces an uphill battle for positioning against entrenched rivals for the shopper's mindshare: traditional athletic shoe giants like Nike and adidas... as well as "emerging athletic lifestyle" brands like Ed Hardy slapping tired designs on technical fabric to appeal to fashion conscious "athletes").

It is precisely that overlap that causes the most excitement and consternation about the Li-Ning brand position in the US marketplace. The truth is that a very stylish technical shirt that would absolutely appeal to cool-weather acclimated Portland runners... is being marketed as a tai chi competition women's top (though in truth, the elegance of the design and the price point should be giving competitors like Lululemon and Lucy sleepless nights). The market for "competitive tai chi clothing" in the US is miniscule, but technical running gear? Massive. So Li-Ning faces the challenge of how to get US shoppers to understand how and why to buy their clothes, as the sports which have given rise to Li-Ning's incredible popularity in China (table tennis, badminton, tai chi and kung fu) are not entry points for fashion sales in the US the way that basketball, football, and baseball are.

GREC will be bringing more coverage of Li-Ning's US entry over the next few weeks, including observations on the merchandising strategy, store design, and global retail execution model. But for tonight, we close with a video clip from the press conference:

Comments

[Neil Kingham]

'Competetive tai chi clothing'! I love it as an idea... It may not be big time outside China yet, but it's only a matter of time!

[Keyon]

I personally think that new trends and brands are great. People of all ages these days are trying to be different and stand out and now because of the emergence of these new brands that give sports apparel a breath of fresh air; should be welcomed with open arms. Li-Ning's has an up hill battle to gain market position in the U.S but it can be done, just like Japanese brand name Red Monkey crossed over and now is a house hold name.I personally believe that Li-Ning's clean design, like other sports apparel new comer Ostas Sports Apparel gives them look that will appeal to more than just young people. Ostas was started by former Professional NFL athletes and like Li-Ning's is making alot of noise in the apparel industry. I think there a company that will be worth keeping an eye on as well. Good luck to the new comers in this industry as I will be rooting for the under dog companies.