Li Ning Is Running Head First Into The Glass Ceiling For Chinese Retail Brands

li ning

Three senior executives resigned recently from China’s famous sports apparel company, Li Ning.

Sources blames their departure on a failed marketing campaign, “make the change,” which promoted a shift toward upscale sports clothing and away from cheap casual clothing, according to Caixin.

Instead this campaign resulted in a drop in sales. Third quarter shoe and apparel orders fell 17 per cent year over year, and declined 6 per cent from the previous quarter. Total sales for 2010 fell behind rival Anta Products.

The problem is getting sandwiched between cheap Chinese brands, like Anta, and coveted foreign brands, like Nike:

A source close to Li Ning management told Caixin the company “is now sandwiched in the middle of the industry” with products that fit neither a “sufficiently high” market segment, nor one that is “sufficiently low.”

True, Li Ning’s upper rung products are priced below similar products made by big foreign brands. But the Beijing dealer said the “difference in prices makes little sense” these days in ever-wealthier China since consumers would just as well “buy a top brand with a little more money.”

It’s a problem for all foreign brands. Check out 10 Chinese brands that could take over the world >

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