{"id":854302,"date":"2025-06-08T22:12:49","date_gmt":"2025-06-09T03:12:49","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2025\/06\/08\/with-profits-down-li-ning-leans-on-core-sports-to-weather-a-slower-market\/"},"modified":"2025-06-08T22:12:49","modified_gmt":"2025-06-09T03:12:49","slug":"with-profits-down-li-ning-leans-on-core-sports-to-weather-a-slower-market","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2025\/06\/08\/with-profits-down-li-ning-leans-on-core-sports-to-weather-a-slower-market\/","title":{"rendered":"With profits down, Li-Ning leans on core sports to weather a slower market"},"content":{"rendered":"
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On March 28, Li-Ning released its 2024 financial results, reporting annual revenue of RMB 28.676 billion (USD 4 billion), up 3.9% year-on-year. Net profit declined 5.46% to RMB 3.013 billion (USD 421.8 million), while gross margin rose one percentage point to 49.4%.<\/p>\n

Analysts widely considered the results to be in line with expectations. Morgan Stanley pointed to impairment losses on investment properties as the main factor behind the dip in net profit, but suggested the actual performance may have exceeded investor expectations.<\/p>\n

During the earnings call, Li-Ning co-CEO Qian Wei said the company would continue prioritizing operational stability, while remaining flexible in execution. \u201cBeing steady does not necessarily mean being conservative,\u201d he said, adding that Li-Ning will go on the offensive when needed, rein in when necessary, and adjust when it must be done.<\/p>\n

Since 2023, growth in China\u2019s sportswear sector has slowed. After riding a branding wave from its \u201cChina Li-Ning\u201d campaign, the company shifted back toward its roots as a professional sports brand\u2014closing underperforming stores and tightening its focus.<\/p>\n

\u201cWe\u2019re not going to sacrifice our commitment to technical performance or our investment in innovation,\u201d Qian told 36Kr<\/i>. \u201cWe\u2019ll stay the course.\u201d<\/p>\n

The recalibration seems to be working. But now the company faces a larger question: can it reignite growth and spark investor imagination?<\/p>\n

A single brand, many fronts<\/b><\/h3>\n

Li-Ning\u2019s strategy in 2024 focused on category expansion.<\/p>\n

While competitor Anta diversifies with a multi-brand strategy to hedge against market swings, Li-Ning has doubled down on its original play: one brand, multiple categories. Founder Li Ning has consistently emphasized building a professional sportswear label that supports Chinese athletics and embeds the spirit of sport into everything the company does.<\/p>\n

That spirit came through clearly in how Li-Ning approached its key segments last year. CFO Zhao Dongsheng described the model as \u201cusing core categories to drive the business.\u201d<\/p>\n

The brand\u2019s core now includes six categories: running, basketball, cross-training, badminton, table tennis, and sports lifestyle. Of these, running, basketball, and cross-training\u2014Li-Ning\u2019s three technical performance pillars\u2014accounted for 64% of total retail sales in 2024.<\/p>\n

Running led with 25% growth, representing 28% of total sales. The company built on its \u201cBeng\u201d midsole platform with a new \u201csuper\u201d variant, featured in models like Dragonflight and the Feidian 5 Ultra. Together, its top three lines\u2014Superlight, Chitu, and Feidian\u2014sold over 10.6 million pairs.<\/p>\n

Basketball told a different story, with a 21% decline in retail sales. Qian said the company intentionally pulled back to avoid erratic pricing, which was hurting the segment\u2019s long-term value.<\/p>\n

Still, Li-Ning continued to invest in product innovation, releasing basketball shoes with proprietary tech like the \u201ccarbon core\u201d system and ground control unit (GCU) outsole. \u201cI can say with full confidence that every pair of Li-Ning\u2019s basketball shoes is fit for the pro leagues,\u201d Qian said.<\/p>\n

Li-Ning first stepped into basketball\u2019s global spotlight in 2012 by signing NBA star Dwyane Wade and launching the \u201cWay of Wade\u201d line. Meanwhile, Anta signed Kyrie Irving in 2023 and quickly gained traction. Its Irving series sold out in multiple markets, with the brand aiming to double basketball shoe sales to 12 million pairs.<\/p>\n

Nike, for its part, remains the dominant force. It holds exclusive rights as apparel partner for the NBA, WNBA, and NBA G League through 2037. The Jordan brand, in particular, remains deeply woven into basketball culture.<\/p>\n

In this field, Li-Ning\u2019s edge is limited. But it\u2019s trying to punch above its weight by blending technical performance with grassroots culture. The basketball division now runs across three lines: professional basketball, the \u201cCounterflow\u201d sub-brand for streetball, and Way of Wade. Li-Ning plans to expand Counterflow events to 50 cities this year to deepen fan engagement.<\/p>\n

From the court to the outdoors<\/b><\/h3>\n

While running and basketball remain central to its strategy, Li-Ning also reported growth in badminton and table tennis\u2014and made early moves into emerging categories like tennis, pickleball, and outdoor gear.<\/p>\n

Badminton and table tennis have long-standing cultural roots in China. The creation of the World Table Tennis (WTT) league has helped professionalize and commercialize the sport, but market size remains relatively small.<\/p>\n

\u201cWe didn\u2019t get into badminton and table tennis just because of their vertical potential,\u201d Qian told 36Kr<\/i>.<\/p>\n

Li-Ning began sponsoring China\u2019s national table tennis team in 2000 and entered badminton in 2009. Today, the company is considered a category leader in both. Qian said the goal now is to \u201ctranslate that influence across categories,\u201d encouraging loyal customers in racket sports to consider Li-Ning for other athletic needs.<\/p>\n

Tennis is a tougher nut to crack. Globally, it\u2019s among the most professionalized sports, with century-old players like Wilson (now owned by Arc\u2019teryx parent Amer Sports) dominating. Nike used last year\u2019s Shanghai Masters to host high-profile activations featuring stars like Jannik Sinner and Carlos Alcaraz. Chinese breakout Zheng Qinwen also featured in promotions for the China Open.<\/p>\n

Breaking into this scene will take sustained investment. Brands hoping to ride a trend without long-term commitment are unlikely to succeed.<\/p>\n

On the outdoor front, seen as the next big growth engine for sportswear, Li-Ning only began building its lineup last year. Its offerings are now split into technical and light outdoor gear. A standout product has been an outdoor jacket under the Counterflow line.<\/p>\n

That said, outdoor remains a small part of Li-Ning\u2019s catalog. Qian acknowledged as much, noting that expansion here will be gradual. Anta, by contrast, has gone all-in. A source close to the company said its strategy has shifted fully toward outdoor segments. Even its \u201cGuanjun\u201d stores pivoted in that direction, while brands like Descente and Kolon posted strong growth.<\/p>\n

Course corrections<\/b><\/h3>\n

Li-Ning is also tweaking its channel strategy.<\/p>\n

According to Zhao, daily foot traffic in offline stores fell 10\u201320% year-on-year in 2024. Total offline sales declined slightly. In response, the company closed underperforming stores and prioritized efficiency in top-tier markets, while exploring new formats such as campus locations.<\/p>\n

As of year-end, Li-Ning operated 7,585 branded retail points across its core brand and Li-Ning Young\u2014a net decrease of 83. The main brand lost 123 stores, while Li-Ning Young gained 40, reaching 1,468 outlets. Meanwhile, the company upgraded more than 1,026 locations to its ninth-generation store format, each averaging monthly sales of RMB 360,000 (USD 50,400).<\/p>\n

Online, the numbers were stronger. As market conditions improved, e-commerce rose to account for 31% of total revenue. Online D2C sales climbed 10\u201320%.<\/p>\n

Li-Ning also upped its R&D investment to 2.4% of revenue, a 0.2 percentage point increase from the previous year. Cumulatively, the company has invested over RMB 3.5 billion (USD 490 million) in innovation over the past decade. The payoff is visible in footwear, which now represents 49.9% of revenue\u2014up from 48.5% last year.<\/p>\n

Inventory turnover remains healthy. The full-channel turnover cycle was held at around four months, with an average turnover period of 64 days\u2014just one day longer than the previous year, and still ahead of most peers. Qian noted that the company now reviews inventory performance weekly across departments.<\/p>\n

Still, macro pressures persist. Even Nike is restructuring under new leadership, with Elliott Hill steering the brand back to core performance and leaner operations. Anta, too, is reshaping its product mix to reflect a more value-conscious consumer base.<\/p>\n

Across the board, the message is clear: scale for its own sake is no longer the priority. Nor is cutting prices at the cost of credibility.<\/p>\n

For 2025, Li-Ning expects flat revenue growth and a high single-digit gain in net profit margin, according to Zhao.<\/p>\n

One new variable could help lift the brand. Earlier this year, Li-Ning succeeded Anta as the official sportswear partner of the Chinese Olympic Committee for 2025\u20132028. Anta had previously used that platform to build brand stature and access top-tier events. Now it\u2019s Li-Ning\u2019s turn.<\/p>\n

KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <\/i>article<\/i><\/a> was written by Xie Yunzi for 36Kr.<\/i><\/p>\n<\/div>\n

36Kr English
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On March 28, Li-Ning released its 2024 financial results, reporting annual revenue of RMB 28.676 billion (USD 4 billion), up 3.9% year-on-year. Net profit declined 5.46% to RMB 3.013 billion (USD 421.8 million), while gross margin rose one percentage point to 49.4%. Analysts widely considered the results to be in line with expectations. Morgan Stanley<\/p>\n","protected":false},"author":1,"featured_media":854303,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[144477,4496],"tags":[47358,6389],"class_list":{"0":"post-854302","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-li-ning","8":"category-profits","9":"tag-li-ning","10":"tag-profits"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/854302","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=854302"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/854302\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/854303"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=854302"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=854302"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=854302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}