It is not easy for Li Ning's only branch in Hong Kong to complete overseas market expansion

Yesterday, Li Ning told the media that the company’s Tsimshatsui branch in Hong Kong was closed early this month, and the company’s follow-up will focus on the development of business in the Mainland.

In this regard, some industry sources have said that Li Ning's overseas market expansion is not easy, difficult to manage, differences in consumer demand, and the strong market control and possession of overseas local brands are all obstacles. Zhang Qing, the founder of Key Road Sports Consulting Co., Ltd., said that when Li Ning’s business development in the Mainland is blocked, internationalization is not a priority option.

Company: Overseas business is still in the exploration stage

It is reported that this branch is the only branch of the company in Hong Kong and was settled in October 2009. At that time, it was signed for 2 years.

According to media reports, relevant sources pointed out that the company has renewed its contract after the lease expired last year and the rent has increased to more than HK$700,000. However, there is no renewed long-term contract. The landlord or tenant can leave for a two-month notification period.

In response, Li Ning said in its reply to the Daily Economic News reporter that the overseas market business including Hong Kong is still an exploration stage and should be conducted in a manageable and cost-effective manner. At present, the company's strategy is still focused on the development of the mainland market.

As to whether the company mentioned by the reporter will continue to pay attention to and develop overseas markets, the company stated that after all, there are many situations in overseas markets that are different from those in the mainland market. The company is in an exploration stage and it is also a learning process. It will involve risks. Controlled, cost-controllable ways to explore.

Some industry insiders believe that Li Ning's move is related to the operating conditions. Due to poor performance of many stores and low profitability, Li Ning has closed 952 stores in the first half of the year.

Zhang Qing told the “Daily Economic News” reporter that in the past few years, Li Ning was too optimistic about the development trend of the industry, and the overall business strategy tends to be diversified.

Zhang Qing also pointed out that under the circumstances that Li Ning’s business development in the Mainland has been hindered, the so-called internationalization is not a priority option.

Experts: Many Reasons Impede Overseas Development

Regarding Li Ning's Tsim Sha Tsui branch in Hong Kong, which had already closed earlier this month, a long-time investor concerned about Li Ning said that it is not Li Ning who does not want to be an overseas market, but the reality is that it forces companies to change their strategies.

Regarding why Li Ning suffered setbacks in overseas markets, the above industry sources believe that the reasons are various.

Ma Gang, an independent commentator in the apparel industry, believes that the competitive situation in overseas markets is different from that in the Mainland. “The sporting goods market in the Mainland is in a mature period of rising, while the markets in developed regions like Europe and the United States are already very mature, and they want to be in a mature market. It is very difficult to do sales."
Zhang Qing also told the reporter of “Daily Economic News” that “the sporting goods market in Europe and North America is already quite mature. “Nike, Adi, etc. have been expanding for many years, and the market left for the development of local brands is quite small. ”

In addition to the above reasons, the differences in domestic and foreign cultures doomed the consumer's habits and differences in demand also affected Li Ning's overseas market expansion.

Not the Li-Ning family, Zhang Qing told the “Daily Economic News” reporter that mainland brands did not do a good job in exploring overseas markets. However, if sports brands want to develop, they should contact some mainstream sports. “But local brands Without much accumulation, it is difficult to have core competitiveness in the European and American markets."

After passing through the store and shifting its business focus, will Li Ning's follow-up development turn for the better? Ma Gang believes that, for the moment, "if inventory does not improve, it is difficult to judge his subsequent improvement."