Li Ning “falls back” to earth after flying over the nest

Two months ago, China's former gymnast Li Ning challenged the gravity of the earth, flying over the "Bird's Nest" in Beijing to light the Olympic torch.

However, the facts show that Li Ning Co., Ltd., a Hong Kong-listed company with a market value of US$1.8 billion, is much more likely to soar. Since August 11, the first trading day after the opening ceremony of the Olympics, the stock has fallen by 26%, more than half of the beginning of the year, while the market value of the entire stock market has evaporated by a third. .

Prior to the Olympic Games, the fundamentals of Li Ning Company looked good: As of the first half of June, the company's net profit increased by 68% compared with the same period of last year. The survey also showed that after Li Ning’s chairman unveiled the opening ceremony of the Olympics, the company’s brand awareness has increased significantly in China.

However, after the Olympics, the company's prospects seem very unnerving. Li Ning’s chief financial officer resigned last month and it is said that distributors’ product inventories are also piled up. Moreover, investors are increasingly skeptical about whether Li Ning can translate positive publicity into strong domestic growth or overseas expansion.

This also reflects a widespread problem in China's growing consumer goods companies that have failed to tap the full potential of product profitability in the past.

Despite the impressive economic growth in China, it is difficult to remind people of a world-famous Chinese consumer goods brand, perhaps with the exception of the home appliances manufacturer Haier Group. A possible solution to this problem is to introduce necessary marketing knowledge, or to work with a leading international company, just as the juice producer China Huiyuan Juice Group Co., Ltd. wants to join Coca-Cola.

At the same time, Western brands such as Nike and Adidas are also strengthening their efforts to enter China. Even if Li Ning can obtain a price advantage, the bold marketing skills of foreign companies may also help them close the gap.