Why did the prince lose to the grassroots in the 30-year battle between Li Ning and Anta

  In 2008, at the opening ceremony of the Beijing Olympic Games, Li Ning, the prince of gymnastics, lit the main torch.

In the same year, the Li Ning brand (02331.HK) ushered in a bright moment: the company's revenue and net profit attributable to the parent in 2008 increased by 54% and 52% respectively year-on-year.

  In 2012, Anta (02020.HK) surpassed Li Ning in revenue for the first time, and became the number one sports brand in China.

  In the next ten years, it was difficult for Li Ning to surpass this "grassroots" competitor.

  The financial report shows that in the first half of 2021, the revenue of Li Ning and Anta were 10.197 billion yuan and 22.812 billion yuan respectively; the net profit was 1.962 billion yuan and 3.84 billion yuan respectively; as of February 16, 2022, the total market value of Li Ning and Anta were respectively It was HK$210.4 billion and HK$350.9 billion.

  Whether it is revenue, net profit or total market value, Li Ning lags far behind Anta.

  Li Ning and Anta have "loved and killed each other" for 30 years, which may also make people curious, why did Li Ning lose the first throne?

And how did Anta counterattack?

  The story is long.


  who's peak

  who is rising

  ■In 2008, Li Ning's market value reached 50 billion yuan, more than twice that of Anta.

  ■The turning point came in 2010 - that year, although Li Ning's revenue was still above Anta's, its profits were overtaken by Anta.

  ■In 2011, Li Ning looked at Anta as a leader for the last time, but the distance between the two was very close.

  ■In 2012, Anta's revenue surpassed that of Li Ning for the first time, and the gap became wider and wider in the following years.

Whether it is revenue or market value, Anta once opened the gap of more than twice that of Li Ning and became the first brother of domestic sports brands.

  starting point

  Gao Fushuai VS Small Factory

  The Li Ning brand was established in 1989, and Anta was established in 1991. The two companies had a huge gap at the beginning. It can be said that one is a "rich and handsome" and the other is a proper "poor boy".

  Li Ning:

  Before the establishment of the Li-Ning brand, Li-Ning, as a gymnast in my country, has won many awards and honors.

At the 1984 Los Angeles Olympic Games, Li Ning won three golds, two silvers and one bronze in one fell swoop, which was close to one-fifth of the total medals of the Chinese delegation, and became the athlete with the most medals in the Olympic Games, known as the prince of gymnastics.

  In 1989, Li Ning, who was injured and sick, chose to retire. After retiring, Li Ning joined Jianlibao. Under the leadership of Li Jingwei, he started business and founded Li Ning Company.

Li Jingwei once said to Li Ning: "Li Ning, your name and face are the greatest value."

  In the 1990 Beijing Asian Games, Li Ning won the clothing sponsorship right for the torch relay of the Beijing Asian Games with RMB 2.5 million. The Li Ning brand was also well known and recognized by consumers, and Li Ning gradually became the No. 1 sports brand in China.


  In 1991, Ding Shizhong established the brand Anta in Jinjiang, Fujian with a start-up capital of 200,000 yuan.

Jinjiang footwear industry has a long history of development, and now it has become a gathering place for Chinese sports brands; Anta, Xtep, Hongxing Erke, 361° and other brands were also born in Jinjiang during this period.

  In the initial stage, Anta mainly undertakes overseas order business and processes foreign brands, forming a business model focusing on production and order processing, and gradually realizes the accumulation of original capital.

  On the other hand, Anta started the channel construction of its own brand.

From 1991 to 1992, Anta initially developed the enterprise by means of tiered agency distribution; from 1993 to 1994, Anta changed from manual workshop production to large-scale production. Although the profits were considerable, the Anta brand was still not well-known.

  At that time, Anta was inconspicuous among the Jinjiang-based brands.


  Marketing Aggressive vs Marketing Neutral

  Although Anta's "starting point" is not high, its goal is "one brother" Li Ning.


  Li Ning can occupy the minds of users, and Li Ning's own IP blessing is one of the reasons.

Therefore, Anta chose another national sports idol, Kong Linghui.

  In 1999, Anta, which completed a certain amount of capital accumulation, took out 20% of Anta's annual profits, signed Kong Linghui as its image spokesperson, and spent 3 million yuan on CCTV prime-time advertisements, creating a "sports star + CCTV" marketing in China. model.

  Anta "bet right", Kong Linghui won the championship at the 2000 Sydney Olympic Games, when he shouted the slogan "I choose what I like", Anta was quickly known to the Chinese people.

Anta's turnover also soared from 20 million yuan to 200 million yuan that year.

  With popularity as the cornerstone, Anta began to follow the event sponsorship strategy.

In 2004, Anta fully sponsored the CBA league; according to public information, Anta reached a cooperation with CBA at a price of 60 million over three years, and CBA also made Anta the only designated partner for the league sports equipment.

Since then, Anta has sponsored the CBA League for 5 years and has cooperated with the CBA for 8 years.

  In this process, Anta has gradually grown into a well-known domestic sports brand.

  Li Ning:

  Back in 1999, at that time, Li Ning signed a contract with the popular star Qu Ying as the image spokesperson, shouting the slogan: "I exercise, I exist".

  However, as an entertainment star, Qu Ying's brand fit is still under discussion. Coupled with the news that Kong Linghui won the championship, Anta's "money" is obviously worth more.

  In terms of sponsorship, Li Ning, who was positioned in the mid-end market at that time, was eyeing more high-end NBA events.

  In 2002, Yao Ming joined the NBA; in 2005, Li Ning became the NBA's strategic partner.

Anta is the only designated partner of CBA League sports equipment.

  It was not until 2012 that Li Ning obtained the sponsorship rights of CBA at a price of 2 billion in 5 years.

  In the past 8 years, Anta has consolidated its position in the sinking market through the CBA league.

  At that time, Li Ning was still firmly on the first throne, but his opponents were narrowing the gap step by step through aggressive marketing strategies.


  Brand high-end VS brand diversification

  Anta has been approaching its opponents, but it is difficult to surpass them. The turning point came around 2010.

  Li Ning:

  Since 2010, the sports shoes and apparel market has been in a downturn, and all domestic sports brands have experienced a backlog of inventory.

  Under the pressure of inventory, Li Ning made a major strategic mistake.

In 2010, Li Ning hoped to revive sales by raising pricing and brand positioning, changing the slogan to "Let Change Happen", and targeting post-90s groups to promote new brand stories.

This not only failed to effectively drive sales, but made the inventory problem more serious, and Li Ning fell into crisis.

  In 2012, Jin Zhenjun, then the head of Li Ning Greater China, proposed a "three-step" transformation plan, intending to transform the company's business from wholesale to a retail model that can quickly replenish and respond quickly. However, due to the relatively radical reforms in the early stage, management There have been too many changes in the layers, the old backbones have left one after another, and the transformation has not improved much.

  The financial report shows that in terms of revenue, after the 2008 Olympic Games, the growth rate of Li Ning's revenue began to slow down; from 2011 to 2013, the revenue showed negative growth, and the corporate reform also entered a period of pain.

Until 2017, its total revenue was still below 2010 levels.

  In terms of net profit, in 2011, Li Ning's net profit attributable to its parent fell off a cliff. From 2012 to 2014, Li Ning's consecutive losses exceeded 3 billion yuan, and only small profits were achieved in 2015.

  Li Ning's high-end brand not only failed to attract emerging consumer groups born in the 1990s, but also lost those consumers born in the 70s and 80s who accompanied Li Ning's growth all the way.


  Anta, who came from a "small factory in Jinjiang", may well know that it is more difficult than Li Ning to influence high-end consumer groups.

So Anta entered new markets by acquiring well-known foreign sports brands.

  In 2009, Anta acquired the loss-making Italian sports brand FILA from Belle Group, trying to use this as a breakthrough to develop the high-end market.

In 2013, Anta began to focus on cultivating FILA in the domestic market, which has also become a key part of Anta's position in the first place.

  The financial report shows that in 2015, FILA's revenue was 1.75 billion yuan, and it will increase to 17.45 billion yuan in 2020.

Judging from the proportion of FILA's revenue in Anta's total revenue (revenue contribution), in 2015, FILA's revenue only accounted for 15.8% of Anta's total revenue; after that, FILA's revenue contribution to Anta's revenue increased In 2020, FILA's revenue has reached 49.1%, surpassing the Anta brand and becoming Anta's largest revenue source.

  After having the tacit cooperation between the Anta brand and FILA's "one high and one low", Anta has cut its target into multiple segments.

  Since 2015, the high-end ski brand DESCENTE, the mid-to-high-end children's wear brand KingKow, and the Korean brand KOLON have been successively acquired by Anta.

Anta has also completed its acquisition offer for Amer. The high-end and ultra-high-end outdoor fields have formed a complete closed loop, and different brand positioning complements each other and complements each other.

The use scenarios of the products cover sports and leisure, professional sports, and high-end fashion, etc., to meet the product needs of different consumer groups for different use scenarios.

  Constantly burning money to "buy, buy, buy", Anta now has a huge business matrix, which also gives the capital market more room for imagination.


  Looking back at Li Ning's 11 years, first, due to mistakes in decision-making and executive turmoil, the "first brother" status was taken away by Anta; in 2015, under huge losses, the founder Li Ning, who retired behind the scenes, had no choice but to come back again. Hot flashes in the country", Li Ning was able to return to blood again.

  In the past 30 years, the domestic sports brand has made great waves, and the story of Li Ning and Anta is very exciting.

As for whether Li Ning can make a beautiful turnaround, the answer may be revealed soon.

  Chengdu Business Daily-Red Star News reporter Yu Yao and Liu Mi