Wednesday, January 19, 2011

Li Ning to launch largest ad campaign in US in May

Curated By ZenithOptimedia, The ROI Agency
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As part of its ambitious plan for overseas expansion, Li Ning, one of the largest sports brands in China, will launch an advertising campaign in the US market in May.

The company will set up a joint-venture with Acquity Group, a Chicago-based brand consulting firm, to expand US distribution, according to its CEO Zhang Zhiyong. Acquity is currently designing the ad campaign, including TV, print and online exposure, which has been billed as the brand's largest marketing effort in the country.

The company has been actively looking to expand outside of China, especially since the 2008 Summer Olympics, and is increasingly viewed as a potential challenger to global giants. The company has its US headquarters and a retail store in Portland, which is the long-time home of Nike and Adidas. It plans to invest US$10 million in its US business this year.

"The opening of the first Li Ning store right opposite the Nike Portland headquarters is a statement of intent. They could either go niche and for example position themselves as a fashion brand like Puma has done, or more likely continue their approach and offer themselves as a value alternative to Nike and Adidas," said Charles Sampson, CEO of Y&R China.

Sampson said the first approach will need some strong partnerships with fashion designers and the second a big marketing budget.

"Either way it will not be easy for them to succeed on US turf," he added.

Some industry insiders also question whether it is the right time for Li Ning to expand.

“The question today is this: Is this the right thime?” said David Wolf, founder and CEO of Wolf Group Asia (WGA), a management advisory firm in Beijing and Los Angeles.

“Has Li-Ning adequately secured the home market, or would the money be better spent beating Nike, Adidas, and New Balance in first tier markets in China, or expanding into markets where those brands are weak or inappropriate and Li Ning could become a market leader?” he said, adding that he would argue that it is too early to make this move.

Li Ning has been eyeing the US market since the early 1990s, but held back knowing that a secure market position at home would be essential before venturing onto the home turf of its strongest rivals.