On 11 April, Chinese sportswear company Li-Ning released its annual financial report. In 2021, Li-Ning achieved revenue of 22.5 billion RMB ($3.54 billion), an increase of 56% compared with the previous year. In terms of net profit, the figure reached 4 billion RMB ($630 million), an increase of 136% compared with 2020.
2021 has so far been their top-performing year since being listed on the Hong Kong Stock Market back in June 2004.
One of the most important reasons behind the huge increase in revenue, is the rise of Guochao in China, with Li-Ning becoming one of few brands leading the trend. As a result, the company has enjoyed a lot of public attention due to its rising popularity.
Li-Ning first came up with the idea of Guochao in 2018, and it was also the first Chinese sportswear brand to participate in “Tmall China Day” that same year during New York Fashion Week. After fashion week, they launched a sub-brand that positions itself as a sports fashion brand of Li-Ning. With the help of the sub-brand, Li-Ning has expanded its business in the Chinese sports fashion market and started attracting a much younger Gen-Z audience.
In the past 4 years, with the help of two major trends (sports fashion and Guochao), Li-Ning finally made its brand upgrade after an inventory crisis and achieved great success with the younger generation.
However, Li-Ning still has a long way to go compared to international sportswear giants such as Nike and Adidas, not to mention its biggest Chinese rival – Anta. Also, as Chinese sportswear companies of all sizes are now following the trend of Guochao, it remains a huge challenge for Li-Ning to maintain this competitive edge in the long run.
If we look at Nike’s development throughout the years, we see that choosing the right marketing strategies and platforms is crucial for a sportswear brand, which is what Li-Ning needs to prioritise at the current stage of their business if they are to take on these big global players.
