In 2011, Advertising Investment Reached 1.4 Billion&Nbsp; Li Ning Is Rich In Marketing And Unable To Tackle The "Pollution Gate"

A few days ago, environmental protection organizations pointed their fingers again Big textile brand The pollution in China's supply chain includes Li Ning, the leader of local sports brands.

According to previous Li Ning The 2011 annual report released shows that the overall distribution cost of Li Ning last year was 2.9 billion yuan, up 13% from 2.5 billion yuan in 2010, accounting for 32.6% of the total revenue. Li Ning continued to increase its investment in brand promotion. The cost of Li Ning brand advertising and related promotion was 1.4 billion yuan, up 10.8% year on year, and its proportion in revenue rose 2.7% year on year.

Industry insiders pointed out: "On the premise of slowing down the growth of the industry, Li Ning's performance has shown a downward trend in recent years, and high costs have always led to low profits, which has become Li Ning's" heart disease ". However, this does not mean that the pressure can be shifted to choose between suppliers and others, and more attention should be paid to environmental protection in production."

　　 Li Ning's brand image was damaged when he was on the pollution blacklist

Recently, five environmental protection organizations, including the Public Environment Research Center, released a survey report on textile industry pollution in China on April 9. Many well-known enterprises have different degrees of contaminated Li Ning is on the list to prevent violations. The report directly points out that the enterprises named have large pollutant discharge and low water use efficiency.

The reporter called Li Ning Company, and the relevant person responded: "For the pollution problem, the company has actively communicated with the supplier about the emission of hazardous chemicals, made a commitment to zero emission of hazardous substances, and has a long-term plan on related issues."

Li Ning promises to achieve zero emission of hazardous chemicals by 2020: achieve the goal of zero emission of hazardous chemicals in the supply chain and product life cycle through systematic changes. Li Ning will gradually use hazardous chemicals to fade out of suppliers, accelerate the elimination of hazardous substances of high concern, and continue to communicate and cooperate with other brands, material suppliers and other stakeholders.

Zhong Ying, from the Institute of Contemporary China Research, believes that "enterprises seek benefits in excess of environmental protection, and have a fluke mentality for improper practices in the process of pollution treatment. Environmental protection and economic development are both important. Listed enterprises should pay more attention to their personal image, and should not shift cost pressure to cause brand image damage."

　　 Gross profit rate drops sharply, and high cost becomes a deadly weapon

Li Ning is confronted with an indisputable fact that the fierce competition in the sporting goods industry has slowed down the growth of the industry.

In the past year, sporting goods dealers handled a large number of inventories, and Li Ning did not escape his fate. In 2011, the inventory provision of Li Ning was 188 million yuan, an increase of 63.48% over the same period of 2010. Due to the impact of the new wholesale discount rate policy and the rise in production costs, the gross margin continued to decline.

Among the five major local sporting goods manufacturers, Li Ning ranks first in terms of revenue, but has the least net income. Anta ranked first with 1.73 billion yuan, while Li Ning ranked the bottom with 386 million yuan, even nearly half of Peak Sports, which ranked first.

According to the 2011 annual report, Li Ning achieved an annual operating revenue of 8.929 billion yuan, a decrease of nearly 500 million yuan compared with the previous year, and its revenue declined 5.8% instead of increasing. At the same time, the gross profit decreased by 8.02 percentage points to 46.1%.

Zhang Zhiyong, chief executive officer and president of Li Ning, said that this year, 200 factory stores and discount stores will be added to clear inventory. The sixth generation stores have more revenue than before the upgrade, and will increase to 1500 by the end of the year.

The sluggish growth of orders and the impact of some dealers' inventory have led to a significant decline in gross profit margin. Li Ning has never given up its brand image publicity, and the harvest is declining, but the cost has not been effectively controlled. The report shows that the total distribution costs and administrative expenses increased by 3% over the previous year to 3.223 billion yuan. Li Ning's performance pressure can be seen.

　　 Undefined governance structure problems appear

Using the capital market to raise funds to seek expansion and development has become the only way for many enterprises to develop to a certain scale. However, the waste of resources caused by blind expansion is not worth encouraging, especially when the achievements are not ideal.

Li Ning was questioned in the market due to the decline of orders, personnel shock and serious pollution.

A person familiar with the situation pointed out: "Li Ning's market positioning has always been unclear. Due to the deviation of the management's strategy and strategic guidance, the enterprise has adjusted for many times and affected its performance. Staff communication is not in place, and there are problems in corporate governance."

A few years ago, Li Ning was the leader of local sports brands. With excessive expansion to maintain the hegemonic position and resist group attacks such as Anta, Li Ning began to set foot in many industries.

Previously, with the rumor of Delightful Energy Saving, a subsidiary of Li Ning, involving 40 billion yuan in reconstruction of old areas in Shenyang Heping District growing, a project -- "Ecological City" emerged, and Li Ning was said to be going into real estate. However, perhaps due to the financial pressure, with the premature death of the plan, it ended up dead. However, Li Ning's intention to set foot in real estate development is quite obvious.