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Retail Trends

Coming to America

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Gymnast Li Ning made a spectacular impression on the world at the 1984 Los Angeles Summer Olympics. It was China’s first Olympics since 1952 and Li was their brightest star, capturing six medals and grabbing the spotlight from American gymnasts Bart Conner, Peter Vidmar and Mitch Gaylord.

Li is intent once again on taking the United States by storm — but this time, instead of winning gold in floor exercise, pommel horse and rings, he is undertaking an even greater challenge. As founder and chairman of Chinese athletic sportswear brand Li-Ning Co., he is competing for U.S. retail market share against the likes of Nike, Under Armour, adidas and Reebok.

Li-Ning Co. is recognized as the world’s third-largest sports apparel company and already positioned as the “Nike of China.” The brand, founded in 1989, made its official U.S. launch in March. “The fact that we have a $1.3 billion brand from an Olympic champion’s vision that nobody knows about in the United States is a huge opportunity,” says Craig Heisner, vice president of marketing, sales and merchandise for the Chicago-based U.S. division of the company.

Training to train
Despite its U.S. upstart status, Li’s company is hitting the ground running with some solid fundamentals. It lacks the star endorsement appeal that Nike enjoys with a Michael Jordan or LeBron James or Under Armour with a Ray Lewis or Cam Newton, but Heisner sees Li himself as a powerful marketing tool.

“Everything starts for this brand ... with its founder,” he says. “It is a story we think is critically important. He is representative of what we believe a lot of this brand is about ... building a business and giving back to the community. He is incredibly philanthropic, and he’s an iconic figure in China.”

In 2010, the Credit Suisse Research Institute, an arm of the Swiss investment banking organization that identifies and provides insights on global themes and trends, included Li-Ning Co. in “Great Brands of Tomorrow,” a report identifying 27 brands it predicted would significantly outperform the market over three to five years.

“Great Brands of Tomorrow” asserts that a company’s brand can be one of the few true competitive advantages remaining in modern industry. “We believe Li-Ning is moving in the right direction of finding a spot in the upper echelon of sports brands globally,” the report says, noting that the company has embarked on brand building as a focus of its business that reflects the company’s core competencies.

Leslie Hand, research director at IDC Retail Insights, says the brand should be able to build on Li’s mystique in the United States.

“Li Ning is certainly a superstar in his home country, and his brand is extremely popular, as well,” Hand says. “There is certainly a place for the brand in the United States, as our country is diverse and our population tends to have hometown, regional and national sports affiliations.”

Training to compete
Heisner says the company isn’t tackling the market in the manner that U.S. athletic and sportswear brands have traditionally done so, such as distributing through sporting goods retailers and department stores. While it opened its first U.S. store in Nike’s backyard of Portland, Ore., Li-Ning Co. is opting for a primarily direct-to-consumer market approach, Digital Li-Ning.

Its initial U.S. foray will be focused on three product categories — basketball, running and women’s fitness. Heisner says Digital Li-Ning has enjoyed a nearly 600 percent increase in daily Internet traffic since its soft launch late last year, and it plans to release additional styles in both men’s and women’s apparel and shoes throughout 2012.

Digital Li-Ning also expects that product endorsers will help push the brand, including Baron Davis of the New York Knicks and Evan Turner of the Philadelphia 76ers and a handful of 2012 Olympians — Jamaican sprinter Asafa Powell, champion Russian pole vaulter Yelena Isinbayeva and American triple-jumper Christian Taylor.

“We’re going to have a really strong [U.S.] presence. ... [with] a lot of off-line initiatives as well,” Heisner says, noting the company’s affiliation with Red Bull beverage’s King of the Rock one-on-one basketball tournament at Alcatraz prison.

“With digital being a key push for us, it is obviously critical that we have opportunities to put our brand and our products in the hands of our target consumers,” Heisner says.

Training to win
Despite news reports that often portray China in a less-than-favorable light on issues ranging from human rights to currency manipulation and trade imbalance, Heisner believes that younger, technologically savvy Americans will give the brand a chance. He points to a survey on U.S. consumers’ attitudes toward China and Chinese brands from The Monogram Group, asserting that within five years Chinese brands will be acceptable to U.S. consumers.

“The younger consumer tends to be a bit more open-minded,” Heisner says. “They haven’t been jaded by others’ perceptions of what China represents from a negative standpoint.”

Hand says that Li-Ning could gain market traction in the United States if the consumer it seeks to reach “adopts it as the latest trend,” though she says it is too early to determine if that will happen.

The brand will rely on marketing the company’s Far Eastern heritage and methodology, Heisner says, melding the mind and body with an understanding of human movement, discipline and commitment. Such an approach contrasts with an element of “sameness” from other competitors in the U.S. market, he says.

“We’re interested in consumers who are open-minded, new world thinkers and those who want to think about brands differently or are looking for an alternative,” Heisner says. “To be successful [in the United States] you have got to be able to have a strong point of view. We’re working on evolving so that our point of differentiation is stronger than ever.”