As athletes stroke the sporting gold at the Beijing Olympic Games, those big-name sporting brands hope that the effort or cash spent in preparation for the Games would also be proved lucrative. However, sometimes, things are unpredictable, just like “anything is possible”.
Being one of the of ficial sponsors, Adidas, involved with the Games since 1928, determined to secure a bigger slice of the Chinese market, where it is in strong competition with Nike.
“The Beijing 2008 Olympic Games will serve as a platform for the brand to become the leading sports brand in China,” said Erica Kerner, director of Adidas’s Beijing 2008 Olympic program me. Through a combination of TV, pr int , outdoor, public relations, digital, point-of-sale and roadshows across the country, the”Im possible is Nothing” Olympic marketing campaign aims to bring sport engagement with Chinese consumers to a new level”.
Especial ly on July 5, Adidas opened its largest Brand Center worldwide, with a size of 3,170m² occupying four floors, inside the new Sanlitun Village Shopping Center in Beijing, featuring a range of unique interact ive elements that will provide consumers with a truly special retail experience.
As for Nike, maybe, 2008 is a tough year. After losing the partnership with the Games, along with the increasing cost of raw material and the appreciation of RMB exchange rate, Nike suffers a great cost pressure and depression in 2008. So that, Adidas, among the global sporting brands competition for the Games, has already won for a while, or the millions of dollars spent on sponsorship and i ts athletes, as well as television and other advertising began to perform its effect.
Nevertheless, as the Games began, Adidas felt a little unhappy. Li Ning, the 44-year-oldg ymn ast champion and his sports brand may not be widely known wor ldwide, but that is changing quickly after what some advertising insiders have described as the greatest case of “ambush marketing” in Olympic history.
Billions of people around the world watched on television as Li few hundreds of feet high into the air and “ran” around the top of the “Bird’s Nest” (the National Stadium) to light the Olympic cauldron on August 8, the most stunning climax of the spectacular opening ceremony of all time. At that time, Li Ning, aroused the interest of billions to know his stories, his achievement, and also his sporting brand: Li Ning.
Besides the highlight at the opening ceremony, the brand Li Ning also supplied the kits for Chinese shooting, table tennis, diving, and gymnastics teams, which could be considered as the most gold-medal competitive programs for Chinese athletes. According to the statistics of 2004 Athens Games, those four teams gained nearly half of the total gold medals. Of course, this time, the results is much more heart- stirring, as the information released by the Li Ning website, 25 gold medals were achieved by these four teams (of them, four came form table tennis, seven came from diving, fve came from shooting, and nine from gymnastics.) Comparing with Adidas, Nike shows more favor on supporting various athletes and sports teams, rather than establish relationship with offcial activities directly. Some insiders pointed out that, every year, the money Nike spent on each team and athlete will be much more expensive than that Adidas sponsors an Olympic Games.
To date, Nike signed long-term strategic cooperation deals with more than ten famed sports stars. During this Game, Nike supplied kits for 20 sports teams with high-popular i ty, such as basketbal l , swimming, weight lifting, boxing, athletics, and so on, aiming to gain the focuses sharing with other sports brands as much as possible.
However, when we were watching Liu Xiang, the China’s frst big track and feld star, withdrawal from the110-meter hurdles painfully, or Usain Bolt, the fastest man in the world, waving his bright golden Puma shoes amusedly, I think , at that moment , the executive of Nike began to think about their new market strategy probably or prayed the other teams or stars could perform better.
Someone joked that, during the Game, the athletes would compete in Nike or Li Ning, but they would be awarded the medal in Adidas. Anyway, this is jus t a brand competition during the Olympics. Out of the game, the competition in markets is much more fercely, for there are not only just those three members.
After the Games
According to the ZOU Market ing, dur ing 2009-2012, the sports market in China would increase with a margin of 20%, reaching a value of 12 billion USD. Recently, in Chinese market, Nike, Adidas, Li Ning accounts for 12%, 20% and 17%respectively. According to Adidas, China is an important market. The Olympic Games boosted its first-half sales in China by 60 percent. China will become its second biggest market after the US by the end of this year, based on the sales performance in the first six months of 2008.
And it is estimated that the sale will exceed one billion Euros in 2010 in China. Furthermore, till the end of 2008, Adidas will open 5,000 franchised stores and 1,000 Reebok stores in China. Nike Company also expresses that, in China, the annual sales has already achieved one billion USD.
The 2008 Olympics is an absolute opportunity for the company to promote its brands in Chinese market, which is also beneficial to confirm its leading position in Chinese sports markets. As for the local brands Li Ning, it has already set the development schedule. There are three stages: the first period is to the end of 2008, the second is during 2009 to 2012, and the third is during 2013 and 2018.
Till the year of 2013, the company will make China as the main strategic market, with a predicted increase rate around 35-40%. During the third stage, Li Ning will make effort to rank the top fve sports brands around the world.
According to Li Ning, due to the central stocking policy carries out in 2008, the company could save a cost of 30-40 million Yuan, and keep a net profit level at around 47-48% during the whole year. In the coming five year, the sale in domestic market is predicted to increase with a margin of 35-40%.
In the first half year, Li Ning realized a sale of three billion Yuan, increasing by 60.3% comparing with the same period of last year. Of them, the net profit reached 333.7 million Yuan, seeing an ascendant of 68.3% against the corresponding time. Moreover, in August, Li Ning Company has announced that the company has signed an agreement with the Italian sports brand Lotto Sport and gained a 20-year exclusive concession at a cost of round 930 million Yuan, marking an important step for Li Ning’s multi-brand management strategy, which will strengthen Li Ning’s product supply in China and improve its position in sports fashion market, and help reduce operating costs of the company.
Till now, Li Ning currently has four brands under its management: Li Ning, New Dynamic, AIGLE and Double Happiness, preparing for its strategic development schedule confdently.
In a market with great potentials, each brand has to face various changes and challenges, striving for survival and more shares. Chances exist anywhere, the key lies with whether you are going to catch or wait for it. Anyway, ” Impossible is Nothing”. “Just do it”, “Anything is Possible”.
source: alibaba.com
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