What Do You Think Of Li Ning'S Cross-Border Selling Of Coffee And Wine

　　 As long as Chinese brand companies have money, they will break through their own business, either in real estate or in employment.

Li Ning, who is "everything is possible", has the idea of selling wine again.

Recently, Li Ning, the founder of Li Ning company, was revealed to have formally entered the rice wine industry, invested and launched the "Twelve reading" rice wine. This is the second time after Li Ning launched Ning coffee in May, it has attracted attention due to cross-border.

From athletes to sportswear entrepreneurship, Li Ning's most successful cross-border entrepreneurship comes from the insight and continuation of its own advantages. With the rise of national fashion, the national sports apparel brands have ushered in a wave of growth. However, compared with Anta, Tebu and other brands taking advantage of Guochao Dongfeng to consolidate their own business, Li Ning's brand attention in recent years mostly comes from cross-border operation which is far from its own business.

Compared with the popularity brought by strong marketing, Li Ning company has been in the second-line position for a long time in the global sports apparel brands, and has been deeply affected by the price pressure of the head brand. Under such pressure, Li Ning needs to seek differentiation and strengthen its core competitiveness.

In other words, whether it is coffee sober, or alcohol paralysis, for Li Ning is a temporary shot in the arm. After the noise, Li Ning still has to consider how to achieve a breakthrough in the main track.

Coffee and wine, the more you drink, the more you have?

The popularity of cross-border coffee of Li Ning company has just passed, and the news of Li Ning's personal investment in rice wine has been on the hot search of wine industry.

According to the public information, twelve reading rice wine is the product of Zhejiang laoshaofang liquor industry Co., Ltd. The company was established on May 17, 2021. Its legal representative is Zhao Jianguo, the co-founder of Li Ning group, and the behind shareholders are Tianyang Co., Ltd. and Huzhou laoshaofang Liquor Co., Ltd.

Although from the perspective of ownership structure, twelve reading rice wine has little relationship with the listed company Li Ning company, which should be a personal investment. Ms. Wang, who is engaged in brand strategy consulting in Henan Province, believes that the IP effect of deep binding is one of the main reasons why twelve reading rice wine can attract the attention of the industry.

The trouble is, for Li Ning company, the founder of Li Ning's personal IP has long been deeply bound to the listed companies. Even if Li Ning's personal investment is invisible, it is also endorsements with the goodwill of listed companies. If the negative impact of twelve reading rice wine appears, it will also be transmitted to the level of listed companies.

In recent years, Li Ning and Li Ning company have a special preference for cross-border. At the beginning of this year, Shanghai Coffee Co., Ltd; On April 30, the first "Ning coffee" was opened in a Li Ning flagship store in Xiamen, Fujian Province.

However, Ning coffee from hot to ebb only two months, finally failed to escape the fate of most online red products. "Li Ning's coffee is not easy to buy. He has to stand on the shoulder of 499 yuan." A user once shared his experience of tasting "Ning coffee" on a social platform. According to the user, you need to spend 499 yuan in the store to get a cup of Ning coffee for free.

Li Ning company once introduced the positioning of Ning coffee and an innovative attempt of retail terminal consumption experience. The main goal is to improve the comfort and experience of customers when shopping. However, according to the above-mentioned user's opinion, this may be just a "free" new game for the retail industry.

How many people are willing to spend 499 yuan for a cup of coffee? A small red book user shared on the platform: "the quality of coffee is very ordinary, not a boutique coffee. It's just used to quench thirst." According to Lu Jiu's business review, social platforms favored by many young people have not found a large flow of tap water.

Why can't clothes, shoes and hats satisfy Li Ning's appetite?

If we talk about the introduction of free pining coffee, it is still a sober attempt of Li Ning Company: to improve the experience of main retail links through the coffee loved by young people. Well, Li Ning's personal launch of twelve reading rice wine may be a little bit paralyzed with alcohol. For many enterprises, cross-border and diversified operation is a conventional operation. But Li Ning is a special brand, because consumers are not only concerned about the products and design of "Li Ning", but also the honor and national feelings behind Li Ning. Li Ning and Li Ning company, which are labeled with the national tide label, have always been placed in the high hopes of the national brand "overtaking on the curve". Even Ning coffee, which eventually dissipated its heat, was also claimed by netizens at that time that "the taste is not particularly hard to drink, and the price is close to the people, and is willing to support it for a long time."

However, in recent years' performance reports of Li Ning company, we can not see that the leader once had the spirit and will of "fighting for the champion" and hovered in the second position all the year round.

At present, China's sports apparel listed companies are Anta sports, Li Ning, Tebu international, 361 degrees. In 2012, after being overtaken by Anta, Li Ning company was in the following state, and the gap was widening.

As can be seen from the figure below, from 2017 to 2021, the domestic sports brand market has maintained an overall growth trend. However, the company's 36th Anta is slightly higher than that of the other 36th brands in terms of revenue growth. In 2017, the revenue gap between Li Ning Company and Anta was less than 8 billion yuan, and by 2021, the number had soared to 26 billion yuan.

According to the figures in the table, the compound annual growth rate of Anta in the past five years is about 24.25%, and that of Li Ning Company is about 20.59%. In 2021, under Anta sports, the income of Anta single brand is higher than that of Li Ning company.

For Li Ning, the good news is that it still outperformed the growth rate of China's sportswear market in the same period (from about 221.5 billion yuan to about 371.8 billion yuan, with an annual compound growth rate of 10.9%).

Another good news is that Li Ning Company is still a very profitable enterprise. In terms of operating profit, the compound annual growth rate of Li Ning Company is more than 67%, while that of its main competitor Anta is only 22.7%. Although this may be due to the low operating profit base of Li Ning company. From the perspective of net profit margin, Li Ning Company (17.77%) is still lower than Anta (20.45%).

But for Li Ning, a little rich can never be peaceful. In the 2022 Winter Olympic Games, Anta will be in the limelight and repeat the myth of Li Ning 14 years ago. In the future, it may become inevitable that Anta will occupy more market share. If Li Ning Company is not willing to be the number two, it needs a higher growth rate. It is not without effort that Li Ning company has acquired three high-end brands such as baoshilong, tieshidongni and Clarks in the past three years. However, according to the current figures, the acquisition of Li Ning company has not brought about the obvious second growth curve as FILA did to Anta.

Trying to cross-border business outside of sportswear, perhaps Li Ning Company is the latest effort to find a stronger growth momentum for itself.

Chasing the trend and losing the core competitiveness?

In his early years, Li Ning joined Jianlibao after his retirement, and started business under the leadership of Jianlibao operator Li Jingwei, and founded Li Ning company. Li Jingwei once said to Li Ning, "Li Ning, your name and face are of great value." As the saying goes, the sense of honor and national feelings behind Li Ning's name have brought cultural barriers to its brand. In recent years, the rise of Guochao is similar to that of Li Ning brand in essence. It is the enhancement of national cultural confidence, not just the pursuit of trend.

After being overtaken by Anta in 2012, Li Ning company also tried to break through the circle with national tide and cross-border other fields. However, the trump card that seems to be able to overtake in a curve has made Li Ning Company trapped in the "mud" of Guochao. This is because, in the process of constantly chasing the trend, Li Ning has gradually forgotten the core competitiveness.

Compared with Anta's strategy of never letting go of any sports event, Li Ning company has been desalinating sports elements. Li Zhiling was chosen as the spokesperson of the company in the early days; In 2021, Xiao Zhan was signed as the global spokesman. The information from this brand connotation makes the outside world think that Li Ning Company is wavering between fashion and professional sports, which blurs the brand image.

The more debatable choice is that "China's Li Ning" will shine in two fashion shows in New York and Paris in 2018, and the brand of Li Ning also makes frequent moves in the fashion circle. But the bad news is that from the perspective of fashion, Li Ning company has never had a sports fashion brand like FILA like Anta. Through brand isolation, it has completed the mental occupation and cooperation of consumers. A sports brand, want both professional and fashion, it is difficult to achieve both.

In addition, the long-term sales of sportswear and sports shoes depend on the professional value of the brand. Through continuous research and development, we can maintain the quality and design of the products. Only in this way can we win the favor of users in sports events in various vertical sub fields.

The R & D data show that although Li Ning company has increased R & D investment in recent years, its R & D cost rate shows a downward trend. In 2021, Li Ning's R & D expenditure increased by 28.2% to 414 million yuan from 323 million yuan in the previous year, but the proportion of R & D expenditure decreased from 2.2% in 2020 to 1.8%.

On the contrary, Anta and Tebu R & D expenses accounted for more than Li Ning for the other two top players in the industry. Anta's R & D expenses accounted for 2.3% of revenue in 2021, while Tebu's R & D expenses accounted for 2.5% of revenue in 2021. At the same time, Anta's annual revenue is much higher than that of Li Ning company, which means that the gap of R & D expenses between the two sides is also doubling.

In short, in the international market, it is still difficult for Li Ning Company to obtain the position of head, but it needs to be on guard against the latecomers who are in close pursuit. This state of affairs may accompany Li Ning Company for a long time.

After "breaking the circle", Li Ning Company will probably repeat the inventory crisis in 2010 if it only wants to rely on keeping close to the national tide and various online Red flows to "eat fresh food all over the world".