Chinese Brands Struggle to Go Global
While Western luxury names rush to China to tap into demand from the growing wealthy class, The Wall Street Journal details China’s struggles - as underscored by sports apparel maker Li Ning - to swim against the current and create its own global brands to match its manufacturing prowess:
Chinese athlete Li Ning captured attention at the 2008 Beijing Olympics as he soared high above National Stadium with torch in hand during the opening ceremony, showcasing China’s aspirations as well as his own ambitions to create a major global sports-apparel brand.
Three years later, Mr. Li has come back to Earth. His eponymous Li Ning Co.—which made a big push into the U.S. by signing high-profile endorsers like basketball star Shaquille O’Neal—has watched profits drop. It’s also endured an exodus of designers and other employees from its main U.S. outpost in Portland, Ore.
Its shares have responded in kind, having fallen 63% this year, far outpacing the Hong Kong market’s overall 29% drop.
The article also cites research which reveals that 83% of consumers can’t name a Chinese brand or company, prompting companies such as Li Ning to retool a global strategy which previously relied on distribution deals with U.S. retailers and plans for its own brick and mortal stores. Now, as PR Newswire reported yesterday, Li Ning has partnered with U.S.-based eCommerce and digital marketing company Acquity Group to launch a web site devoted to bringing its brand to the U.S. consumer.