Li Ning, the former first brother of sporting goods, has encountered an unprecedented brand crisis in recent years. From a market value of US$280 billion at the beginning of this year to only a quarter of Anta's now, Li Ning has evaporated US$210 billion during the year, with a market value of 70 percent. What happened to Li Ning?
The immediate trigger was that the performance in the third quarter fell short of expectations. In the first half of the year, Li Ning could also see that its revenue increased by 13% year-on-year, but its net profit fell by 3.1% year-on-year. In the third quarter, the company simply didn't release the revenue figures, but only told you that the revenue growth was in the single digits, which is obviously an accelerated downward trend. And this kind of practice of covering his ears and stealing the bell cannot delay the market's disappointment with him at all, so the stock price is **.
However, the deeper reason hidden behind the stock price** is that recently, both the brand and the enterprise have fallen into the whirlpool of dislocation and distortion of values. There are the following aspects of performance:
The brand takes the high-end route and fails. After the success of using China's Li Ning sub-brand to make a national trend, Li Ning launched Li Ning 1990 and continued to raise prices, strategically hoping to occupy the market share withdrawn from Adi and Nike. However, whether it is the national brand Li Ning or the national tide brand of China Li Ning, its brand foundation is national, and the brand value is cost-effective, while Li Ning 1990, which still uses Li Ning elements, is trying to take the high-end route in vain.
The brand can't be stopped, no one dares to think that Li Ning, who has always focused on national pride, actually launched a series of devil clothes last year, and was complacent. I don't know if it was the designer's patriotic feelings for him to join the Japanese nationality and change the Chinese name to the Japanese name. But this is undoubtedly a huge damage to the brand of Li Ning, and it is difficult to heal. Could it be that the high-end and internationalization of the brand should follow his preferences of the C E O who changed his nationality? As soon as this series of clothing was released, Li Ning's stock price instantly fell by 100%, and the public questioned him for seriously hurting the feelings of the Chinese people.
When the Li Ning series sold well, they spent most of their income on marketing, and his income, marketing and sales expenses have increased significantly year after year, and now the high pressure is nearly 40 percent, while the research and development expenses are pitiful, accounting for only 1.8 percent of the revenue, or a downward trend year after year. Compared with Adi's 10% R&D expenses, how do you compete with others for product power, and do you still have to compare with others to sell products from this R&D cost?
In terms of management, Li Ning also made some puzzling decisions. For example, in the case of declining revenue and negative profit growth, it is necessary to spend 2.2 billion yuan to buy a building, and it is said in a high-sounding manner that it should be used as a Hong Kong headquarters, because it values the potential of the Hong Kong market, but the population of Hong Kong is not more than 10 million, and there are not many people in Guangdong Province. In fact, he might as well say that he wants to ** real estate and plans to make a profit, which is quite frank. In addition, their marketers are raising prices and lowering prices, and the chaotic ** system makes dealers at a loss, and it also directly exposes the cruel fact that his brand power cannot support high pricing.
Li Ning's brand crisis was not caused overnight, but was caused by the superposition of many factors such as value misalignment, declining competitiveness, and management errors. Li Ning needs to re-examine its brand positioning, product strength, and market strategy in order to get out of the predicament and regain the trust of consumers. Morgan Stanley, Citigroup, and CMBI have all lowered their earnings for the next few years**, which has further stimulated investors' pessimism about Li Ning. In the next few years, it is estimated that it will be enough for Li Ning and his Chinese-Japanese class C E O to drink a pot. Be kind.
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