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2009

Global Branding: Li Ning vs. Nike

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Dalton, Kristen, "Global Branding: Li Ning vs. Nike" (2009). Volume 17 - 2009. Paper 3.
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 G
GLO Global Branding: Li Ning vs. Nike

GLOBALB
LOBALBRA
The aim of the this paper is to discuss No.1 and beat out their foreign competitors. In the 1960s and 1970s, the United States
the global branding and marketing strategies Li Ning has the opportunity to not only drive was charged with dominating global media
of Li-Ning, one of the leading sportswear away the global powerhouses of Nike (United for its own advantage, which challenged the
companies in the People’s Republic of China, States) and Adidas (Germany), but also to one-way flow of news and information they

BRAND-IN
as it tries to regain the market in China, in compete with them on an international level claimed would benefit the development of
hopes of eventually pushing past the current and perhaps within their own countries. most countries (Straubhaar 40). The television
powerhouses of Nike and Adidas. Once they Theory
growth in Brazil through major broadcaster
have succeeded in this task, Li-Ning will then Joseph Straubhaar introduces two crucial
TV Globo and the use of telenovelas was
take their branding to the international level. concepts to global media and communications:
heavily influenced by American models, yet it
The data gathered shows evidence of the asymmetrical interdependence and cultural
progressed enough to be able to fully compete
marketing steps and strategies they have taken proximity, of which the latter is heavily
with the US. “The result was the mediation and

RAND-ING
in order to accomplish their current goal of dependent upon the role of the audience.
adaptation of aspects of the American model
gaining more popularity at home. The data also In his essay, “Beyond Media Imperialism:
via Brazilian elites who then reinvented their
shows how similar Li-Ning’s strategies are to Asymmetrical Interdependence and Cultural
own version of capitalist, commercial media”
that of Nike and Adidas and how they are trying Proximity,” he states that asymmetrical
(48). This commercialism of Brazilian media
to separate themselves in a unique way. interdependence is not the result of a one-
is the result of going beyond American
The theories of asymmetrical way flow of media products from First World
influences and tailoring their own home
interdependence, cultural proximity and countries such as the United States to Third
market, culture, economy and environment to
glocalization are discussed in order to make World countries around the world. Instead,
their specific needs.
sense of the data I have discovered. This It should be noted that national culture is
it is a constant exchange between the
paper will conclude that Li-Ning has made not uniform and is instead, heavily dependent
spectrum of cultures that enable a two-way
tremendous strides on the home front due upon social class. For example, the “popular
mmunication flow and an equal dependence
to adopting similar marketing and branding classes” of the lower-middle class, the working
upon another. Cultural proximity is the idea
strategies from those companies that have of people preferring television programming
class, and the poor show a great liking towards
proven to be successful. Even though they are in which the content is familiar to them
national and local productions (51). Elites
still behind, they have come a long way. Only and they can relate to it.
and the better educated tend to prefer US
time will tell if they can make the final jump to programs such as mini-series and music (51).

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GLOBALBR
The role of the audience plays an integral role in
determining the progress of the global media,
Li-Ning appeals to the Chinese culture
while the global media interaction consists of
working classes of the smaller cities tend to
favor the local, domestic products of Li-Ning

OBALBRA
especially those in Third World countries. the “development of the appealing product, (Straubhaar). Quite aware of this fact, Li-Ning’s
Straubhaar labors the point that “the role the expansion of its production, a continued promotion campaign is only concentrating on
of the audience is seen within supposedly expansion into export, and the eventual peak the second-tier and third-tier cities, it’s most
dependent situations, moving from a view of as markets and audiences became saturated” important markets. “Although Li-Ning hopes
passive, dominated audience to one of an active (Straubhaar 41). As a result, the rising local to compete with Nike and Adidas in first-tier
audience, conditioned by class, age, gender, business of Li-Ning in China would not only cities, where consumers wield the highest
and interests, and tending to prefer and select actually compete with powerhouses Nike in purchasing power, its fiscal reports showed that

BRAND-ING
local or national cultural content that is more the United States and Adidas in Europe, but the Shanghai and Beijing markets’ contribution
proximate and relevant to them” (43). But it audiences would eventually prefer products to the corporation’s income structure fell from
is important to keep in mind that despite such in sports performance such as sneakers and 10% in 2004 to 7% in 2005” (Cheung). Guo
strides, many countries still continue to rely apparel that relate to their own culture rather Jianxian, chief operating officer at Li-Ning
heavily upon productions from outside of than those that weren’t. Li-Ning’s marketing “mentioned that the key for Li-Ning is to
their nation and region. and branding strategy reflects the concept of cultivate consumers in the second-tier and
Roland Robertson introduces the theory of cultural proximity. Zhang Zhiyong, President third-tier cities and draw them closer to sports”
glocalization, which states that a broad, global and CEO of Li-Ning said of Nike and Adidas, (Yifei). Several hundred outlets will open

AND-ING
concept or idea, such as a sneaker, can appeal “They might have shoes that look like ours and nationwide by the end of 2008, mostly in these
to a specific group of people by focusing on everyone has things like shock absorbers, but cities. “The purchasing power in second-tier
a particular need at a local level. This can not they don’t have that eastern feeling to them and third-tier cities in China is really strong.
only be incorporated within the specific design like our shoes have. Every person from every Everybody has their eyes on those markets, and
of the shoe as it relates to the smaller, more country has different feet and we know how Li-Ning must go there,” said Guo (Yifei).
compact feet of the Chinese people, but also to make shoes that are comfortable for the It is in these areas, where the population
can be utilized on a creative level as well (i.e. Chinese population” (Rovell). is well over one million, that Li-Ning will be
integrating national colors or themes). This task is easier said that done, however. able to establish itself simply because Nike

NG
Background and Company History The branding culture in China is unlike and Adidas have not yet infiltrated them.
During the 1984 Olympics in Los Angeles, anything known of in the West. In the West, Guo suggested to Li-Ning executives “to try
Chinese gymnast Li Ning made a name for brands mean power, status, and loyalty. The to come up with shoes that have a distinctly
himself when he captured three gold medals, market of the East has the cheap, “made in Chinese flavor and would appeal, in an almost
two silvers and a bronze. In 1990, he noticed China” stigma attached to it, where brand patriotic way, to Chinese consumers” (Nocera).
that China did not brand a high-quality sneaker names are usually knock-offs. Joe Nocera of the Li-Ning responded with the creative and
in the sports performance arena. This is how New York Times said, “I went to a big five-story expensive green shoe that was made in honor

G
the Li-Ning Co., Ltd. was born. Li created his mart called the Silk Market, which was lined of the famous Chinese solider, Lei Feng, who
company by taking the global form of a sneaker with tiny retail outlets all selling ‘branded’ died in 1962 (Nocera). Nike first established
and localizing it to a specific need in a specific goods of every sort…but they didn’t say, itself as a premier sportswear and footwear
country; in this case, sports performance in ‘Do you want a purse?’ They shouted: ‘Louis company before it became popular. “Li-Ning
China. “Anything Is Possible” became the Vuitton! Gucci! Armani!’ All the goods are has still has not convinced consumers that it is a
slogan, one that is eerily similar to Adidas’ knock-offs, of course. But it certainly spoke to professional brand of sports equipment” (Yifei).
“Nothing Is Impossible”, while the checkmark the power of brands — a fake Louis Vuitton In order to accomplish that, Li Ning needs to
logo is jarringly comparable to Nike’s “swoosh.” was somehow ‘better’ than a better-made figure out their unique identity, who they want
Li-Ning is modeling itself on international unbranded purse” (Nocera). This is the market to target and how they will establish themselves
companies who have already proven to be culture that Li-Ning is facing. in China before they can establish themselves
successful, yet adapting to its home market, In big cities like Shanghai and Beijing, on an international stage. Chiang Jeongwen,
economy and culture to create a brand specified Western brands dominate over domestic a Chinese marketing professor at the Cheung
for the people of China. This marketing brands partly because of the elites and better- Kong Graduate School of Business was brought
strategy best exemplifies the academic concepts educated people in the populous; high-end in to give marketing advice to Li-Ning. “When
introduced by Straubhaar and Robertson. cities tend to favor Western brands like Nike. kids wear Nike shoes, they feel as though
On the other hand, the lower middle and they are the cool kids on the block. I said to

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 culture
culture
culture culture
culture
culture
culture
culture
culture
ulture culture
The rising local business of Li-Ning in China would not only actually compete
with powerhouses Nike in the United States and Adidas in Europe, but audiences
would eventually prefer products in sports performance such as sneakers and
apparel that relate to their own culture rather than those that weren’t.

the Li-Ning executives, ‘What does it mean to bring in 5 percent of Nike’s sales and $2.6 basketball arena. We will continue to develop
when you wear a Li-Ning shoe?’ They couldn’t billion of profit generated from selling Jordan such win-win cooperation, in order to make Li-
define it” (Nocera). Chiang’s point was not to apparel (Yifei). Right now, there is not a single Ning become the brand of choice for basketball
copy Nike’s model. Instead, Li-Ning should athlete sponsored by Li-Ning that can compare players and basketball fans and bring the brand
be creating a distinct personality that would to Jordan or be expected to bring in that type concept, ‘Anything is Possible,’ into full play on
separate them from their competitors. of revenue. China’s biggest athlete, Yao Ming, the basketball court” (Li-Ning).
During the 1990s, Li-Ning dominated the is not even sponsored by Nike, but rather, Li-Ning first achieved global status in
Chinese market. However, once the foreign Reebok. However, China’s debatably second 2002 when it signed a deal with the men and
companies of Nike and Adidas were allowed biggest athlete, 2004 Olympic gold medal women’s national basketball teams in Spain.
inside, Li-Ning found itself struggling to hurdler, Liu Xiang, is sponsored by Nike, which In 2004, they became the first domestic
maintain their No. 1 position and by 2004, has a full shoe and apparel line just for him. sportswear company to appear on the main
it had dropped to third with only 18 percent Charlie Denson, the Nike Brand president said, board of the Hong Kong Stock Exchange. They
of the Chinese market share while their “When I think of Liu Xiang, I think of Michael formed a partnership with the NBA in 2005
Western competitors each had more than 20 Jordan in the mid 80s, I think of what Tiger that allowed them to use the league logo as
percent. “There is a powerful sense among Woods and LeBron James mean to Nike in the well as sponsor league players to promote their
Chinese consumers that domestic brands are United States or what Ronaldinho in Europe shoes and apparel. In 2006 they signed Damon
inferior—and a distinct lack of confidence and in the world of football” (Rovell). This is Jones and Shaquille O’Neal to endorse their
among Chinese companies in the allure of their how Nike remains No.1 in the Chinese market. products. In 2008, Baron Davis was added to
own brands” (Nocera). Li-Ning now faces the Current Strategy their roster (Liu and Young). Earlier this year,
challenge of emerging as a reputable domestic How can Li-Ning expect to compete on Li-Ning opened its first US office in Beaverton,
brand in a country where no one believes in a a global level without a Chinese front man to Washington, Nike’s backyard. They hired Alan
Chinese brand. “And if these same companies lead the way? Their answer: “Part of Li-Ning’s Hardy, a senior designer at Nike and design
want to export their own branded goods, which marketing strategy is to attract interest among director at Converse (which is an affiliate of
is where the real profit lie, they’ll have to learn the Chinese customers by using images of Nike), to lead the direction of Li-Ning’s new
how to create distinct identities that appeal to Western athletes” (Cheng). Those athletes outpost in the United States. In 2004, they also
consumers—in other words, brands” (Nocera). include NBA stars Shaquille O’Neal, Damon hired Ned Frederick, a former research director
Chiang, the marketing professor said, “‘When Jones and recent endorser Baron Davis. at Nike, and Daniel Richarch Design, which
you get right down to it, Nike is a branding “This cooperation marks another important has also worked with Converse, to develop
company’; to compete, Li-Ning would have to step toward the international expansion of technology that could compete against the
become one as well” (Nocera). Li-Ning,” stated the press release on Li-Ning’s Nike Air lineup (Balfour). “Having expertise in
COO Guo stressed that “in the coming website. Zhang Zhi, CEO of Li-Ning said, a region you hope to expand into makes a world
years, we are going to have to find a Jordan “Professionalism and internationalization of sense,” said Paul Swangard, managing director
for Li-Ning. Nike had Jordan. Where is our have always been the operation targets of of the University of Oregon’s Warsaw Sports
Jordan?” (Nocera). Michael Jordan had not Li-Ning. This cooperation represents Li- Marketing Center (Hunsberger). Li-Ning is
only the athletic ability and fame, but charisma Ning’s another important breakthrough in the using former Nike design executives who once

76
e served for their biggest competitor, to ultimately
push past them on the international level. And
they’re doing it in Nike’s own backyard.
This isn’t the first time Li-Ning has used
Nike as a foundation for their success. “It’s
gleaming corporate campus near Beijing,
complete with an indoor swimming pool,
basketball courts, and a climbing wall, seem like
lighting the Olympic cauldron (Hunsberger).
Not to mention, he was sporting his own
Li-Ning apparel and shoes. The results: Li-
Ning’s share price rose 6 percent overnight
(ChinaRetailNews). “About 4.4 million Li-Ning
shares usually trade everyday. But on Friday,
9.4 million shares traded. Monday, another 9.8
million shares were traded” (Guppy).
think of another clever marketing strategy that
will help create global branding awareness.
Discussion
So where does Li-Ning stand now that
the Olympics are over? Still behind Nike.
Still behind Adidas. The main reason for
this is not a lack of leaps and bounds the
company has made due to its ability to become
a page out of Nike’s playbook” (Balfour). Nike’s During the Olympics, Li-Ning sponsored
asymmetrically independent of its competitors,
world headquarters, located in Beaverton, the Chinese gymnastic, table tennis and diving
nor is it for a lack of cultural proximity and the
Washington, consists of 16 buildings on 177 teams as well as a variety of other teams from
growing appeal it is has among the people of
acres (Nike). In the 1980s, Nike developed around the globe, including the United States
China. Its marketing strategies are modeled off
a light-asset based operational model that table tennis team, Sudan’s track and field
of Nike and have proven to be successful while
“entails outsourcing product manufacturing athletes, and Sweden’s Olympics delegation
its ability to glocalize a broad form of a product
and retail and distribution business, allowing (Balfour). “Call it paper-tiger marketing.
has also been more than capable. Instead, the
the company to concentrate efforts on design, Li-Ning tries to create the illusion of being a
problem for Li-Ning is rooted in its lack of
research and development, as well as a sales and global player despite its near-total reliance on
confidence as a legitimate sportswear company,
marketing strategy dominated by spokesperson its home market. In addition, the company is
thus it has no solid foundation for its identity.
and advertising. This generates higher rates of running an ad campaign called ‘One Team,
“To compete with the big names either at home
investment return with lowered investment One Belief ” featuring European, African, South
or abroad, Li-Ning may need to decide what it
input” (Cheung). Li-Ning then used this model American—and Chinese—athletes standing
wants to be. Today, it’s difficult to say whether
to enter the high-end market and directly | in a stadium with their hands across their
it’s a trendy brand for urban teenagers or a
compete with Nike in 2003. In 2004, they hearts” (Balfour). This image can be seen on
bona fide performance shoemaker, and simply
focused primarily on developing basketball Li-Ning’s company website.
creating an image of global reach won’t clear
products, specifically shoes, through such Li-Ning also took a different approach from
that up. The challenge is to link to a brand idea
strategies of sponsoring international sporting its global competitors in Beijing. Adidas spent
that is the basis for enduring loyalty,” said Tom
events and employing celebrity spokespeople $80 million to be an official Olympic sponsor,
Doctoroff, chief executive officer for China
(Cheung). “Mr. Guo and the other Li-Ning meaning that whatever country medaled at
ad agency JWT (Balfour). The paper-tiger
executives have big plans for Li-Ning sneakers. the podium would be sporting their logo. Nike
marketing and having journalists instead of
Although they are serving the domestic market decided to sponsor 22 of 28 Chinese teams
athletes wear their logo are ways in which Li-
almost exclusively, they want to begin exporting who competed in their gear. Li-Ning came up
Ning offers a lot of show with little substance.
to Europe and the United States—and go with the unusual marketing strategy of putting
There is no consumer loyalty with that.
toe-to-toe abroad with Nike and Adidas, as it their trademark on the Chinese television
The lack of confidence in its products has
is currently trying to do in China” (Nocera). journalists. “With the announcer’s strategy, we
caused consumers to have an equal lack of
Li-Ning currently generates only 1 percent of its needed a platform for publicizing our product
confidence. “Li-Ning shoes were purposely
$700 million in revenue abroad, but hopes to and journalists can give us better exposure than
priced 20 percent below their Nike and Adidas
be generating over $2 billion in revenue or 20 I can,” said Zhiyong (Rovell). This was a surefire
equivalent…Li-Ning is simply not confident
percent, to come from exports by the year 2013 way to separate itself from the competition and
that its current brand can stand up to its big
(Nocera). The perfect jumpstart to that plan: it proved to be successful in the short-term.
Western competitors” (Nocera). The difference
the 2008 Beijing Olympics. Knowing that it is a smaller business with
in company ideology between Nike and
On the greatest world stage, the Beijing a limited budget, Li-Ning was effective and
Li-Ning is critical and directly proportional to
Olympics provided Li-Ning with a much- intelligent in its marketing campaign during the
its successes. Li-Ning COO Guo said, “Why
needed golden opportunity to become an Olympics. “They are the most efficient marketer
should someone buy Li-Ning shoes? It’s about
international icon. Founder Li Ning captivated for the Olympics in terms of spend vs. return,”
value, design and an overall satisfying retail
an estimated 4 billion people when he ran said Greg Paull, a partner at a market researcher
experience” (Cheng). He told Nocera, “What
around the perimeter of Beijing’s National R3 in Beijing (Balfour). Li Ning now faces
the consumer cares about is the design, material
Stadium, the “Bird’s Nest,” while attached to the challenge of riding the Olympic wave of
and professional performance” (Nocera).
cables that held him 75 feet in the air, before momentum for as long as possible until it can

77
 Nocera responded, “I thought to myself: In order for Li-Ning to ever reach the status
that’s not what they believe at Nike” (Nocera). and success that Nike has, both at home and
Charlie Denson, president of Nike Brand on a global level, it needs to not only continue
believes “it’s about youth, it’s about excitement, to model their marketing strategies from Nike,
it’s about passion. Our focus has always been but also must adopt their mindset as well. They
around the athlete…and supplying them need to establish a company identity and have
with the best possible product to pursue the confidence that they will be successful.
their dreams and goals” (Rovell). While Li-Ning needs to look at catching up to and
Nike is focusing on and more importantly, surpassing Nike, not as a destination, but as a
promoting, the athlete, Li-Ning is focusing checkmark, as their logo simply suggests.
on and promoting the company. People Li-Ning has been facing troubled times
invest in companies that put their emphasis ever since China opened its market to foreign
of investment on the consumer. Nike is businesses, but the company has taken such
personable. Li-Ning is profitable. Nike has tremendous strides in their marketing and
the confidence and the mindset that they branding operations that even Nike and Adidas
will continue to grow and improve and push have started to pay attention. Li-Ning is coming
themselves to provide better sportswear, very close to beating Nike at its own game,
shoes, equipment and apparel for all future but right now, Nike still remains a dominant
athletes. “The Olympics are a great point in force with international status: two things
time and the Beijing Olympics are going to Li-Ning has yet to accomplish. Will Li-Ning
transcend the world of sport. They will become ever recapture its market at home? Will it
a monumental event throughout the world. It ever become an international player in the
represents an incredible opportunity for us as sportswear business? The possibility is certainly
a brand to participate in the world of sport at out there, but only time will tell.
the highest level on the biggest stage. It’s a great by Kristen Dalton
checkpoint for us but its not a destination,”
said Denson (Rovell).

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