Chapter 35 Chapter 10 Competition (5)

The sales volume of Li Ning Company has been in the first place for a long time and has grown steadily.Anta's growth rate is relatively high, almost doubling every year. Anta started to go up, but "Li Ning" couldn't come down.So in 2007, Li Ning Company created another brand "Xindong" to regain lost ground in the low-end market. Under Ding Zhizhong's gentle appearance, he has the conceit and arrogance of a self-made businessman that cannot be concealed.He has never met Zhang Zhiyong, a professional manager, and does not plan to meet him right away, but he has a close relationship with Chen Yihong, another dominant figure in China's sporting goods industry.

Chen Yihong is the founder of the third "terrible Chinese sporting goods company" in China that makes international brands feel pressure. He spent a shorter time than Anta, just over two years. Trends raid India and Brazil may not be convinced if China is and will be the largest market in the world at present and in the future.However, there is no doubt that China is the developing country market that gives multinational sporting goods companies the most headaches.The local "Li Ning" occupies the first place all the year round, and Anta has rushed all the way, building an impenetrable city wall in the low-end market.If these two companies are threatening by the road of specialization, then the third rival, Xiang Sports, has sprung up on the road of fashion, occupying a large market in an unbelievable way.

In China in 2006, almost overnight, a brand called "Kappa" became popular all over the country. From big cities to rural areas, young Chinese consumers who love beauty can be seen wearing bright Kappa sportswear with back-to-back villain logos very striking. Kappa is a brand represented by China Dongxiang Sports Goods Company, and has a close relationship with Li Ning Company. Chen Yihong, the president of China Dongxiang, was the first professional manager of Li Ning Company.Dongxiang and Kappa used to be the institutions and brands of "Li Ning". Kappa's growth has been dramatic. In 2004, before Li Ning went public, Roland Berger Consulting suggested that in terms of long-term value planning, "Li Ning", which is positioned as China's top sports brand, is not in harmony with the style of Dongxiang Sports, which makes fashionable sports clothing.Li Ning Company has only two years of Kappa agency rights left, and the increased profits it has gained will not help its own professional sports brand image.Therefore, based on this suggestion, in July 2005, one year after Li Ning Company went public, it sold 80% of its Dongxiang Sports shares to Chen Yihong, who was then the president of Dongxiang, and his wife at a price of 44.814 million yuan.Chen Yihong officially left Li Ning Company and independently entered the stage of China's sporting goods industry.

According to Wang Yafei, the independent director of Li Ning Company, when Chen Yihong completely left Li Ning Company after 13 years of struggle, at the farewell reception held by Li Ning for Chen Yihong, both of them got very drunk. "The chests of the two were soaked with wine, and tears filled their eyes while hugging each other."Afterwards, the two bid farewell. The turning point is that neither Roland Berger nor Li Ning could have foreseen that BasicNet, Kappa's Italian parent company, experienced a financial crisis in early 2006 after selling Dongxiang's shares.During the crisis, China Dongxiang bought out Kappa's brand ownership in mainland China and Macau from BasicNet, which was in desperate need of funds, at a valuation of US$35 million, which was considered astronomical at the time.From now on, Chen Yihong has nothing to worry about.

No matter from the point of view of tactics or strategy, Li Ning Company should really sell Dongxiang in order to standardize its operation at the growth stage at that time.However, the charm of the Chinese market at this stage lies in the coexistence of challenges and opportunities. The phrase "big adventure, big harvest" was realized in Chen Yihong.The Chinese market is not only the cradle of standardized companies, but also a paradise for adventurers and ambitious people. Since Chen Yihong became the president of Dongxiang, with the passion of starting a business, she stayed up late with the product department to design products, and also determined the fashion direction of Kappa.He pulled the only twenty employees at that time into a karaoke room next to the New World Building in Beijing, where his office was located, and began to discuss whether the fashion line would work.The sales staff reacted fiercely to the fashion line proposed by Chen Yihong, thinking that the market would definitely not approve it.During that discussion, all the employees didn't sing a song, but their voices were almost hoarse during the debate.Chen Yihong finally made a decisive decision: rush to fashion.

Even for a veteran like Chen Yihong, mastering fashion is not an easy task.At the beginning, even the production of the back-to-back logos of the two villains was not smooth, and they were made "like two little worms".A trendy designer said that after Chen Yihong's participation and several adjustments, it became more beautiful. In order to thoroughly implement fashion ideas, China Dongxiang began to look for designers who meet the requirements around the world, and even hired a designer from South Korea to take charge of the general design line at a price never seen before in the Chinese design industry.When it comes to details, such as the selection of colors and fabrics, Chen Yihong has to personally participate.