BEIJING--When Li Ning broke its first ad campaign in China featuring U.S. National Basketball Association player Damon Jones last month, the biggest Chinese-owned sportswear marketer took on the industry's two global powerhouses, Nike and Adidas.
Li Ning, founded in 1990 by an Olympic gold medal winner who was China's first celebrity athlete, was the leading sportswear brand in China just a few years ago. But massive spending by Nike and Adidas, compounded by the growing sophistication of young urban consumers who look overseas for influences in fashion trends and even attitudes, have moved it into third place. Now the trends in sportswear are moving even farther away from Li Ning, towards less well-known foreign brands like Puma that are harder to get, and therefore hipper.
As a result, Li Ning is regarded as outdated in China's largest cities like Beijing and Shanghai, although its products continue to sell well in smaller cities where it has better distribution. And Li Ning's prices--about half those of foreign brands for shoes and apparel--appeal to consumers in places where disposable income remains very low.
But even those strongholds are fading. Nike has more than 1,600 retail outlets with 1.5 new sites opening every day in China. Adidas has more than 2,000 stores in over 300 Chinese cities, and will have at least 4,000 stores in China in 2008.
Both marketers are pumping investment and marketing expertise into China. And Adidas scored by becoming the official sportswear partner of the 2008 Olympic Games in Beijing, despite fierce lobbying by Li Ning for that lucrative spot. Adidas also recently gained access to one of China's biggest celebrities, Houston Rockets' Yao Ming, following its merger with Reebok.
Now Li Ning is fighting back with a TV, print, outdoor and point-of-sale campaign that highlights the challenges Li Ning faces in a very Chinese fashion. In the 30” spot, Mr. Jones, the first non-Chinese athlete Li Ning has ever used, plays basketball on top of a “plumb pegs” formation that continually changes. Plumb pegs are an ancient Chinese martial arts training method designed to hone the skills of a martial arts student by balancing and practicing on top of pillars of various heights and formation.
In a fast-paced, animated spot with a voiceover by Mr. Jones, the ever-changing pegs metaphorically signify the multiple challenges that he has faced in his career, starting as a bench warmer, and how he overcame them. His experience neatly fits Li Ning's slogan "Anything is Possible.”
The advertising is also a metaphor for Li Ning's current underdog status and gives the brand “more attitude,” said Abel Wu, Beijing-based VP, marketing and international business. Mr. Wu spent nine years at Procter & Gamble overseeing brands like Pampers, Crest, Olay, Whisper and Zest for China's largest advertiser before joining the sportswear company in 2004.
“We had some attitude already, but not enough, we want to make our brand character stand out more, so the consumer will think the Li Ning brand has passion and is cool," he said. "We also want them to think the brand has an unexpected factor, give them some surprises, which will help us evolve our image. We also want consumers to think Li Ning is an international brand that can provide the best products and sponsor the best athletes.”
He hopes Li Ning's association with Mr. Jones will give the brand an edgier image. That's something its sponsorship of Chinese athletes, including three members of the country's national basketball team, five players on China's national football team and four national teams (table tennis, gymnastics, diving and shooting) can't provide. While Mr. Jones, now with the Cleveland Cavaliers, has proven he's a successful ball player, his rise through the ranks of America's ultra-competitive NBA ranks has been a struggle.
“In more ways than one, Damon embodies the Li Ning brand's belief of 'anything is possible.' The challenges he overcame with his steadfast determination to reach where he is today personify the brand idea that if you work hard enough, it can happen for you,” said Luis da Rosa, director of brand management at Leo Burnett, Beijing, Li Ning's agency.
Signing Mr. Jones is the first deal between any Chinese sportswear company and a player in the NBA. Mr. Jones has endorsed a line of Li Ning's basketball shoes called Fei Jia (Flying Armor), which he will wear during NBA games, and he will travel to the mainland for special appearances.
The deal is an offshoot of an important three-year marketing partnership Li Ning signed with the NBA in January 2005. It allows the sportswear company to feature some NBA players in its advertising and utilize the league's marketing and media assets in China.
Basketball No. 1 sport
Li Ning has made “great strides with development of their brand,” said Mark Fischer, managing director, China, at NBA Properties in Beijing, but “a lot of it is due in part to the association that we've formed with them.”
It recognized two needs that the NBA has filled to help Li Ning score points with Chinese youth, he added, “the need to create a more sophisticated international image for their brand and the growing importance of the popularity, even dominance, of basketball, by tying into the NBA. The Damon Jones relationship is a very good step in that overall direction.”
According to TNSSport, a global sports research company, 85% of mainland Chinese are NBA fans, basketball is the favorite sport among Chinese youth and six of the top ten favorite athletes in China are NBA players.
Mr. Jones' appearance in Li Ning's advertising followed his first trip to China, a whirlwind week-long visit to Li Ning stores in Beijing, Hangzhou and Shanghai. Mr. Jones was also interviewed by CCTV 5, China's national sports channel, for a program watched by about 10 million Chinese.
“I like their recent move to sign Damon Jones,” commented Yuan Yong, Shanghai-based business director at JWT, who used to oversee the agency's Nike account (now with Wieden+Kennedy's Shanghai office). “It works well with what I think Li Ning's brand essence should do, an underdog achieves a lot. Damon is not a superstar, not tall and not earning a lot of money, but he tries very hard to be a great player."
“At the same time, association with the best basketball league in the world will give Li Ning the borrowed equity of NBA brand and players it picks and makes it look like an A-level player in the sportswear category,” added Mr. Yuan.
One of Li Ning's challenges is that its "Anything is Possible" slogan is uncomfortably similar to the Adidas tagline, “Impossible Is Nothing,” a situation the company knows it has to remedy before launching any international ad campaigns. (The Chinese company is often accused of copying Adidas, but Li Ning's tagline was created first.)
That won't happen for a while. Only 1-2% of Li Ning's sales are overseas, said Mr. Wu, and the company has international expansion on hold until after the Olympics.
"Right now, we are still in the process of learning and understanding the business model for expansion," Mr. Wu said. "Also, it's not easy to compete with Nike and Adidas, they have big budgets and can do everything. We have a long road to go to become brands like them.”
News update (August 16, 2006)
Outdoor and print ads were launched this week, created by Leo Burnett, Beijing, playing on the pronunciation of Mr. O'Neal's name, which is similar to XiaKe, a respectful description of skillful martial arts practitioners in China's sword-fighting era. The campaign calls the basketball star "Master Xia," which can be translated as "Oriental Zorro."
The campaign also include a microsite (www.li-ning.com/32) developed by the agency's direct marketing arm, Arc Worldwide, that documents Mr. O'Neal's visit to Beijing, Chengdu and Shanghai from August 14-19, to promote the new line. It was supported by an SMS initiative sent by mobile phone to young Chinese in 15 cities, informing them of Mr. O'Neal's visit to China and directing them to the minisite.