Sports firms bet their shirts on London

By Liu Jie (China Daily) Updated: 2012-06-27 10:42

A Li Ning Co Ltd store in Beijing. For the 2012 London Olympic Games, the Chinese sportswear company is providing gear to the diving, gymnastics, badminton, table tennis and shooting teams. [Photo/China Daily]

Analysts skeptical that sponsorship will deliver value for investment

Li Ning, nicknamed the "Prince of Gymnastics", dramatically lit the gigantic cauldron that was the Olympic flame at the opening ceremony of the 2008 Beijing Olympic Games.

Four years later, he was also one of the two last torchbearers on the Greek leg of the torch relay for the 2012 London Olympics.

In collaboration with the Greek weight lifter Pyrros Dimas, the 49-year-old handed over the flame solemnly at the Panathenaic Stadium in Athens, just as heavy rain abated and a rainbow appeared.

The winner of six medals at the 1984 Los Angeles Games is now the chairman and executive director of Li Ning Co Ltd, one of China's leading sportswear brands.

But just as his duties in Greece ended with rays of sunshine after turbulent skies, Li Ning the sports star will be hoping that the involvement by Li Ning the business of sponsoring the 2012 London games will mark the beginning of better fortunes for the sportswear company.

But analysts are skeptical.

Despite successfully boosting its business by sports marketing at the 2008 Games, Li Ning, they say, is far from getting help out of its current troubles from its London sponsorship.

And it's the same for other firms involved in sponsorships surrounding the 2012 event, they say.

Anta Sports Products Co Ltd and Peak Sport Products Co Ltd, for instance, will also be best-advised not to hold high expectations of receiving a large boost from supporting the approaching Olympics, they suggest.

Business fluctuation

Li Ning is providing gear for Chinese diving, gymnastics, badminton, table tennis and shooting teams in London.

The group of sports stars is being called China's "dream teams" because of their strength or even supremacy in their own fields.

In 2008, the five teams collectively won 28 gold medals, compared with the 51 China won in total.

Li Ning, founded in 1990, enjoyed strong growth over the past two decades, but that's been sluggish since late 2010. Its peak was two years after the 2008 Beijing Olympics.

"The company is taking a chance that the London Games will help it pick up - but I don't think the tactic will work," said Qu Xiaodong, an analyst at the domestic research company CCW Research.

He explained that Olympic marketing is generally used to enhance brand image on an international stage, while the greatest difficulty facing Li Ning now is actually how to adjust its business structure, improve its retailing efficiency and find the right target market at home, not abroad.