Heated competition

Although it's not an official partner of the Beijing Olympic Games, Li-Ning Co Ltd, China's biggest sports brand, has its own way to celebrate the approaching event.

The company founded by Olympic gymnastics champion Li Ning hopes to use the Games to increase its pace toward the goal of becoming a top-five global brand.

Last weekend, Li-Ning officially inaugurated its flagship store on Nanjing Road, the most prosperous business district in Shanghai - a city in which it has 59 other outlets - after it opened its first flagship operation last November in Beijing.

The four-floor, 3,000-sq-m Shanghai store, the largest sports brand store in China, integrates retail displays with interactive experiences to promote Li-Ning's brand image.

"This kind of interactive store is definitely the best way for us to communicate with our customers as well as help more people experience the Olympic Games," says Zhang Zhiyong, CEO of Li-Ning.

In the interactive zone of the store personalized embroidery services are available to young consumers, while electronic games are offered torcustomers to take a break from their shopping.

The store also organizes events for clients to meet and have items signed by sports stars.

"It closes the distance between ordinary people and Olympic champions," says Zhang.

He declines to disclose the amount of investment in the Shanghai store, noting only that "it cost a lot indeed for us to set up such a big store in the most expensive commercial district".

In addition to a store opened four days before in Qingdao, Zhang hopes to have more city flagship stores where there are Olympic venues - including Tianjin, Shenyang, Qinhuangdao and Hong Kong - before the opening ceremonies in August.

"Just like our Beijing and Shanghai flagship stores, others will also be located on the most bustling commercial streets of the cities."

According to a research report by Harvard Business School, the rapid development of the sports market in China has pushed sports apparel makers into an unprecedented battle.

Li-Ning's rival Nike, the leading sports brand in China with a one-third market share, announced the opening of its first wholly owned flagship store in Beijing last August to mark the one-year countdown to the Games.

Its 1,200-sq-m store is on the capital city's bustling Wangfujing, the same street as Li-Ning's flagship store in Beijing.

"In the future we will launch interactive flagship stores in more cities as the model for our wholly owned retail distribution network to better serve the customers and promote our brand image," says Zhang.

Olympics involvement

"At the same time we also consider the 2008 Beijing Games as a golden opportunity," he adds.

According to Zhang, in the next five years, even wider exposure of its brand will be the focus for Li-Ning.

A survey conducted by Paris-based Ipsos Group last year showed that Li-Ning was mistaken as an Olympic sponsor by respondents - judged "ninth most favorite" - while the actual sports apparel sponsor adidas ranked only 17th.

"The Li-Ning brand has been famous during its 18 years of development in China," says Zhang. "But to meet our goal as one of the top-five sports brands in the world by 2018, we still have to strengthen ourselves. The flagship store is a way."

Last January, Li-Ning lost its 12-year sponsorship of the Chinese Olympic delegation to international rival adidas, which paid a sponsorship ticket more expensive than Li-Ning's entire annual marketing budget.

But Li-Ning says its Olympics involvement will continue and the event in its hometown is an opportunity for it to gain more international awareness.

The company signed an agreement with the sports channel of China Central Television - which changed it name to the Olympic Channel this month - under which all broadcast anchors and reporters will wear Li-Ning clothes until the end of 2008. The company's logo or logo pin must be visible even on formal attire such as suits.

Some have termed that "ambush marketing", but Li-Ning does have direct involvement in the actual Games as the uniform supplier for the Chinese national gymnastics, diving, table tennis and shooting teams, as well as official supplier to outfit both Spain's and Argentina's men's and women's basketball teams and the Spanish and Swedish delegations to the Games.

"We have just framed our next five-year strategy for 2009 to 2013," says Zhang. "But we can only release details after approval from all our board members."

However, Zhang does not dispute that an overseas strategy will be a keystone in his plan.

As the top sports brand in China, Li Ning now has over 5,000 retail outlets nationwide and about 30 test stores in Europe.

(China Daily 01/28/2008 page7)