Lining Hits The Right Hand With His Left Hand?

In troubled times

The company is in constant trouble.

Just after the resignation of CEO recently, CFO resigned last week and the two core positions were "empty nest". At the same time, Li Ning Co once again caused dissatisfaction among dealers.

It is reported that since September of this year, Lining online shopping mall began selling new products at a low price discount, which caused the distributors to complain incessantly and was forced to close some stores.

Reporters learned that, in order to cope with the sharp decline in orders, as soon as possible to digest inventory burden, including

Sports brands have also stepped up their efforts to reduce prices in the Chinese market.

Large scale online shop promotion and discount stores and factory stores are opening up, making interest conflicts a sensitive issue between sports brands and distributors.

The shop price is lower than the distributor's price.

During the eleven period, shoppers in Lining's exclusive stores found that the shopping tickets on their cash registers began with the word "welcome to Lining's official mall" and its website.

Reporters log on to Lining's official mall and learned that in addition to the 2.8 anti season merchandise inventory, special sales promotion was also launched in the autumn of 2012. Lining also offered a special sales promotion, and the discount was "50 percent off capped". In addition, the full 300 yuan could also be reduced by 80 yuan.

According to this calculation, the lowest online sale price of Lining's new products in autumn 2012 is less than 50 percent off.

However, a distributor who asked not to be named told reporters that the factory price of Lining's products was generally less than 60 percent off of the tag price, and the dealer usually received 55% off goods, while the distributor looked at the size and sales of the products from the dealers.

"In 2012, the discount we bought from dealers is 5-5.9, but as far as I know, most regional distributors take 40 percent off of the price tag."

Reporters learned from some shopping malls in Guangzhou that Lining launched 23% off of the sales promotion of the real boutique in the early autumn.

"This means that

The selling price is not only lower than that of physical stores, but also lower than that of some distributors.

The above distributors said that although the annual sales volume of Lining network channel is around 200 million yuan, the annual sales proportion is only about 2%, but Lining's products do not have distinction between online and offline, so this practice has obviously upset the original price system.

A channel merchant said without mercy that Lining's official mall was directly owned by the factory, which was directly owned by Li Ning Co. While the physical shop was invested by distributors and distributors, the new product sold at a discount of less than the distributor's purchase price during the season, and the Li Ning Co had suspicion of competing with distributors.

Compete with distributors?

In fact, in addition to Lining, Nike's autumn new products also have similar practices.

Reporter login Nike official authorized name

The library discovered that its new product launched a "5 fold" promotion in 2012.

Journalist survey found that in the fourth quarter of last fiscal year, the order growth of Nike China dropped from 20% to 2%.

In the first quarter of the new fiscal year, the growth of new orders in the Greater China region, the world's largest sporting goods company, continued to slow down, down 5% from a year ago.

Local brands are no exception. Anta's fourth quarter 2012 orders fell by at least 10%.

At the order meeting in the first quarter of 2013, the amount of XTEP's sales orders had dropped by about 15%-20% compared with the same period in 2012.

PEAK's fourth quarter 2012 orders decreased by 20%-30% compared to the same period last year.

With the reduction of orders, the inventory of Chinese and foreign sports brands continued to rise. By the end of 2012 5, Nike's stock had reached $3 billion 350 million, up 23.39% from the same period last year.

"While increasing online discounts, direct factory stores can effectively digest inventory, but there are also hidden dangers."

Guangzhou retail analyst, Chi Hui, said that the expansion of sports brand in the direct channel and the price tilt will impact the operation of distributor channel, resulting in a crisis of confidence for the latter.