After surpassing Adi, Li Ning plans to “become a devil”

The children's wear market, which has caused headaches for many sporting goods manufacturers, is now the next big business that Li Ning is admiring after Adidas!

The progress of China's local sporting goods manufacturers is obvious to all. For example, Li Ning Co., Ltd. has surpassed Adidas and regained the second place in the Chinese market. In addition to this, a welcome change is that these local challengers are re-examining the deployment of combat power, from the simple planning of the market to the classification of sports events - focusing on producers' products and evolving to focus on segmentation. Crowd - Consumer-centric. Such as the female market, and the recent hot children's sports equipment market.

In April of this year, Li Ning's first KIDS children's clothing store opened in Beijing. The commercial approach adopted was to authorize a local children's wear manufacturer, Parklantti, to use its brand and take overall responsibility for the overall market operation from R&D, production to sales. Previously, Anta and 361 Degrees have also launched their children's wear series. The business opportunities Li Ning sees are that although Nike and Adidas launched children's wear products in China as early as 2001 and 2002, this market has not reached the ideal scale.

A plain business wisdom is that providing business solutions to a problem with a huge potential but difficult market can often lead to postponement. At present, there are more than 300 million children under 14 in China, of which about 100 million are in cities. As China has entered the peak period of childbirth since 2005, the future children population may also double. However, this market is still in its infancy for a long time. “There are few brands that can name names. Even the top three leading brands do not have a market share of more than 5%.” Nan Peng, director of new business development at Li Ning, told Global Entrepreneurs. The biggest obstacle to the development of the children's wear market is low investment, low barriers to entry, confusion in competition, price competition, limited brand competition, and lack of leadership brands.

This is undoubtedly the opportunity of Li Ning. Liu Jia, secretary-general of the China Apparel Association's Children's Wear Committee, told Global Entrepreneurs that when there are powerful and heavily-introduced brands, they will gradually eliminate the scattered forces and change the market structure.

The temptation of this market lies not only in its huge demographic dividend, but also because of the rapid growth of children, which leads to a faster product update cycle than ordinary adult shoes and clothing. Once a brand's loyalty is established, its considerable consumption of multiple purchases is even More than adults. However, the challenge is that this particular consumer group has the characteristics of “rapid growth” and the “duality” of the decision-making body. Consumers are children, but buyers are often parents. Children tend to focus on fashion and fashion trends, and parents will pay more attention to cost-effectiveness. For the current uniform style of children's wear market, sports children's clothing in the form of design to give children consumers a fresh choice, the internal content of technology is to attract parents to buy the best bargaining chip. For Li Ning, finding the psychological common point of this dual consumer entity will be the key to winning the market.

Find problems and solve problems

In Nan Peng's view, 2010 is the best time for Li Ning to launch the children's wear series: "The market is gradually showing a full demand, and at the same time, there is still a period of time before the real competition comes to allow us to fully prepare."

In terms of market positioning, Li Ning hopes to attract middle- and high-end purchase tiers in the cities and radiate from the big cities to the periphery. Although Li Ning children's clothing to a certain extent continues the market positioning of the adult series, and even the two can find similarities in the shape design, however, "Li Ning children's wear is not simply the MiNi version of the adult series." Nan Peng said.

In terms of shape design, children's wear does not equal the smaller adult outfit. People of different ages are accompanied by different cultural elements. The common ones are films, animations and fashion trends. These elements are reflected in the differences in costume design. In addition, the use of children's clothing is also more colorful than adult clothing, this point in the decoration of Li Ning children's clothing store has been reflected in the use of adult clothing store has not used the bright yellow and other colors.

As far as the technical content of sportswear is concerned, the functional requirements of the children's series and adult series are different. This involves the distinction and use of functional materials. For example, children's sports shoes do not need to withstand multiple starts and emergency stops in a short period of time like adult sports shoes, but the sole design must be consistent with the characteristics of children's arches that change with age.

The difference in sales channel is also obvious, because children and adults are not the same as the hot spots. For example, the counters for adult sportswear and sports children's clothing in department stores are not on one floor. Independent of children's clothing store, more targeted to the target consumer groups.

These particularities of the children's wear market are also the biggest reason why Li Ning chose to cooperate with the domestic children's wear brand Parklandi. Parklandi has 11 years of experience in the design and marketing of children's clothes. Its hundreds of direct sales and franchise stores across the country also form a relatively complete network of channels. Lu Keyong, vice president of Parklandi, told Global Entrepreneurs that the children's wear launched by Li Ning and Parklane combines the greatest advantages of both parties, namely the sports attributes of Li Ning brand and the understanding of Parklant's children's wear market.

Li Ning and Parklandi said that the cooperation between the two parties can be described as a match. For Li Ning, entering the children's wear market is an inevitable step in its continued execution of a consumer-focused market segmentation strategy. For Parkland, this company, which claims to have the largest market share in China's children's wear market for two consecutive years, has in fact been constrained by the market's turmoil and its inability to expand. By considering various aspects such as cost, risk, and resources, Li Ning finally chose to authorize the operation of this less risky business model. Parkland has the right to design, produce, and sell Li Ning's children's clothing collection. Its sales and franchise income are included in Parker's financial statements. Li Ning has the right to conduct checks and audits on all related business activities of Parkland and receive brand licensing fees. "Li Ning's children's wear and adult wear are located in the same geographic market and have a great influence on each other. Therefore, we are also strict on the safety of our customers." Nan Peng said. Active management is to ensure that new products meet the brand image, but also an innovation of the licensing model.

However, Parklant is also the first attempt to specialize in sports children's wear. Both Know-How in the "sports" and "children's wear" have become the raw materials for the new "secret recipe" for sportswear. Nan Peng frankly stated that lowering marginal costs and risks was one of the main considerations for Li Ning’s choice to authorize this approach, but the new findings of the continuous collision of the sports children’s wear market during the cooperation process are unexpected surprises.

In addition to the basic considerations of children's clothing, such as plate type, color, and materials, Li Ning and Parklane’s greatest consensus is service. Like large consumer goods or haute couture, Li Ning’s children’s wear regards design, production, sales, and after-sales integration as development goals. This seems to be a new concept in China's children's wear industry, because services will inevitably lead to higher costs, which will ultimately be reflected in product prices and sales. Based on the influence of economic level and consumption habits, the current consumption situation of the Chinese children's wear market, especially the rural market, is still more emphasis on price than quality.

Nan Peng told the journal that the two major reasons determine that Li Ning will adhere to the established market orientation: First, the concept of fertility in China, late marriage, childbearing, and one-child phenomenon will increase the purchasing power of parents and indirectly expand the market for high-end products; It is consumption that is still the most important driving force for China’s economic development. In addition, in Europe and the United States, product and service integration is already the consensus of the market. As the United States and the European Union tighten the standards for imported children's clothes, this consensus will gradually affect China.

Li Ning children's clothing in the Beijing-Shanghai-Guangzhou-Fourth largest-tier cities adopts direct sales, while other regions are distributors. A small part of these dealers will come from Parkland's high-quality distributors that have been operating for many years, and the majority will need to be redeveloped. Lv Zhiyong said that with the past experience of Parklant, good sales performance and market reputation are the prerequisites for attracting franchisees. Therefore, it is crucial for Li Ning’s children’s clothing to ensure that the quality and service are in place. "We have no successful experience to learn from. What we can do is to find problems and then find ways to solve them." Nan Peng said.