2008 Olympics: Who Cheers More?

After the Games

According to the ZOU Market ing,  dur ing  2009-2012, the  sports market  in China would increase with  a margin  of  20%, reaching a value of 12 billion USD. Recently,  in Chinese market, Nike, Adidas, Li Ning accounts  for 12%, 20% and 17%respectively. According  to Adidas, China  is an  important market. The Olympic Games  boosted  its  first-half  sales in China  by  60  percent. China will become its second biggest market after the US by the end of this year, based  on  the  sales  performance in  the  first  six months  of  2008.

And  it  is  estimated  that  the  sale will  exceed  one  billion Euros  in 2010  in China.  Furthermore,  till the end of 2008, Adidas will open 5,000  franchised stores and 1,000 Reebok stores in China. Nike Company  also  expresses that, in China, the annual sales has already  achieved  one  billion USD.

The 2008 Olympics  is an absolute opportunity  for  the  company  to promote  its  brands  in Chinese market, which  is  also beneficial to  confirm  its  leading  position  in Chinese sports markets.  As  for  the  local  brands  Li Ning, it  has  already  set  the  development schedule.  There  are  three  stages: the  first  period  is  to  the  end  of 2008,  the second  is during 2009  to 2012,  and  the  third  is  during  2013 and  2018.
 
Till  the  year  of  2013, the  company will make China  as the main  strategic market, with a  predicted  increase  rate  around 35-40%. During  the  third  stage,  Li Ning will make effort to rank the top fve sports brands around the world.

According to Li Ning, due to the central  stocking  policy  carries  out in  2008,  the  company  could  save a  cost  of  30-40 million Yuan,  and keep  a  net  profit  level  at  around 47-48%  during  the whole  year.  In the  coming  five  year,  the  sale  in domestic market  is  predicted  to increase with a margin of 35-40%.
 
In  the  first  half  year,  Li Ning realized a sale of three billion Yuan, increasing  by  60.3%  comparing with  the  same period of  last  year. Of  them,  the  net  profit  reached 333.7 million  Yuan,  seeing  an ascendant  of  68.3%  against  the corresponding time. Moreover,  in August,  Li Ning Company  has  announced  that  the company has signed an agreement with  the  Italian  sports  brand Lotto Sport  and  gained  a  20-year exclusive  concession  at  a  cost  of round 930 million Yuan, marking an important  step  for  Li Ning's multi-brand management strategy, which will  strengthen  Li Ning's  product supply  in China  and  improve  its position  in  sports  fashion market, and help reduce operating costs of the company.

Till  now,  Li Ning  currently  has four brands under its management: Li Ning, New Dynamic, AIGLE and Double Happiness,  preparing  for its strategic development schedule confdently.

In a market with great potentials, each brand has  to  face various  changes  and  challenges, striving  for  survival  and more shares. Chances  exist  anywhere, the  key  lies with whether  you  are going to catch or wait for it.    Anyway,   " Impossible is Nothing".  "Just do it", "Anything is Possible".

Source form China Textile Magazine

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