Li Ning’s Emergence as a Global Chinese Brand
One month after the gala opening of Li Ning’s first store in Hong Kong on December 4, 2009, the leading Chinese sportswear company opened its first store in the United States, in Portland, less than one kilometre from Nike Town. Wang Wei, the board member responsible for international marketing, saw this moment as the fulfilment of a goal pursued for a decade: positioning Li Ning directly in Nike’s “territory”.
Despite the enthusiasm, Wang Wei was apprehensive. Although the company’s official mission was to become “a leading global brand in the sporting goods industry”, there were divergent views within the organisation. Many argued that, given the intensifying competition in the domestic market—both from foreign and Chinese brands—allocating resources to internationalisation was a strategic mistake, especially considering that almost all sales continued to be generated in China. This internal resistance helped to explain the slow pace of Li Ning’s international expansion.
Since 1999, the board had discussed internationalisation strategies and had set a target of generating 50% of sales abroad by 2008. However, the company only entered foreign markets directly in 2007 and, by the end of 2008, 98.8% of its turnover remained concentrated in China. The first international store, in Maastricht in the Netherlands, closed just one year after opening. Only in 2009 did the internationalisation process gain new momentum, with the opening of a flagship store in Singapore and plans to open between 70 and 100 stores in Southeast Asia by the end of 2010, focused mainly on badminton apparel and equipment.
Wang Wei believed that a short-term defensive strategy focused on protecting the domestic market would divert Li Ning from its long-term mission and put the sustainability of the brand and the company at risk. The challenge he faced was to persuade the board to support internationalisation while also defining its scope: should Li Ning move towards a truly global presence or remain focused on China? Should it maintain its positioning of high-quality products at affordable prices, or invest in building a more differentiated international image?
