The Chinese market is characterized by fierce competition – working both by the book and in tough guerilla-style warfare.

By: Jonathan Winch and Yongyi Jin

One of China’s most ingenious marketers was on hand when Copenhagen Business School and Danish-Chinese Business Forum teamed up for the April 2011 seminar on Marketing in China: Fang Shiwei of the country’s top sportswear brand, Li-Ning Sportswear. This dynamic company is the Chinese equivalent of Nike or Adidas – and takes on such big brands in the fight for local market share. Fang Shiwei is the company’s Chief Marketing Officer.

Fang Shiwei, a powerful and entertaining speaker, had a great deal of advice to give the marketers and students attending the event. He spoke at length on the subject of why it is so hard to do business in Chinese – not just for foreign brands, but also for the Chinese themselves. According to Fang Shiwei, Li-Ning faces fierce competition every time it attempts to enter or increase its market share in a new local region.

Experienced, foreign-trained staff in the sportswear industry, coming from Nike or other mainstream brands, often take a great deal of time to find their feet in the market. That’s largely because of their tendency to use their past experience as the base for working in the new market. And that is their mistake. Many of the beliefs held about a brand, which may be correct outside China, will not work in China. It is also good to remember that there are essential differences in strategy between working with brands that have a mainstream following as opposed to brands at the beginning of their lifecycles – as is the case when many foreign brands enter the local market.

The Chinese market is characterized by fierce competition – working both by the book and in tough guerilla-style warfare. And brands need to be able to play hard in both fields. A prime example of this fact is the story of the Adidas vs. Li-Ning sponsorship face-off for the 2008 Chinese Olympic Games. Negotiations for the sportswear partner sponsorship began in 2005, and ended with victory for Adidas. Li-Ning’s management was horrified at the prospect of losing this exposure opportunity in their local market – what would happen to brand awareness and preference if Adidas was allowed to completely dominate the media scene? Something had to be done.

What happened next demonstrates Chinese guerilla tactics at their best. Li-Ning dedicated a team of 10 staff to the task of wooing China’s main TV channel, CCTV, which would be covering the games. The team went all out, forging relationships with journalists, commentators, camera crew, producers and more. They sponsored hospitality suites and anything else that could make life easier and more comfortable for CCTV’s key people covering the games. The focus was on building a long-term partnership that could provide a unique advantage for Li-Ning as the games were rolled out. And it worked.

During the games, CCTV’s camera crews gave the brand greater exposure than any other, even focusing on the Li-Ning logo center-screen. Commentators took it even further, describing many situations in terms of “The Li-Ning jerseys have just beaten the Nike jerseys…” Journalists and camera crew wore Li-Ning clothing as a default and all athletes interviewed by CCTV were required to wear branded sportswear from the company.

The crowning achievement, however, was in the choice of Mr. Li-Ning himself to be the star of the opening ceremony – borne around the stadium in branded clothing, hanging on a wire, carrying the Olympic torch. Adidas’ management would have been tearing their hair out as Li-Ning’s name was flashed across the screen and all of China watched as the now-retired sports hero opened the games.

In China, local brands are very entrepreneurial, and very flexible. They attempt to add value to every deal, and on what they can do on a strategic or tactical level to get more out of any situation. Li-Ning’s Fang Shiwei describes the Chinese attitude to such things: “For us, it is life and death. If you let another brand beat you, it could be the death of your own brand.”

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