Li-Ning Targets Global Expansion Amid Domestic Basketball Market Challenges
Chinese sportswear giant Li-Ning is recalibrating its growth strategy as it navigates a cooling domestic market and a shifting focus within its core basketball division. According to the company’s 2024 financial results, the brand reported annual revenue of RMB 28.676 billion, a 3.9% increase year-on-year, though net profit saw a 5.46% decline to RMB 3.013 billion. As the company seeks to balance its global ambitions with the realities of Chinese consumer demand, leadership has emphasized a shift toward operational discipline and technical innovation.
Operational Stability Over Rapid Expansion
In a performance update delivered on March 28, 2024, Li-Ning co-CEO Qian Wei addressed the company’s strategic direction. While acknowledging that the basketball category has entered a period of relative stagnation, Qian signaled that the brand would prioritize long-term stability rather than aggressive, short-term scaling. Addressing the company’s approach to market volatility, Qian stated, “Being steady does not necessarily mean being conservative.” He further noted that the company intends to remain flexible, choosing to “go on the offensive when needed, rein in when necessary, and adjust when it must be done.”
This disciplined approach marks a departure from previous years, where the brand leaned heavily into the “China Li-Ning” marketing campaign. The current strategy involves closing underperforming retail locations and tightening the brand’s focus on professional sports performance. Despite the dip in net profit—which analysts at Morgan Stanley attributed primarily to impairment losses on investment properties—the company’s gross margin improved by one percentage point to 49.4%.
The Basketball Category and Technical Focus
The basketball segment remains a critical, albeit challenging, pillar for Li-Ning. As the company works to reignite growth, it has doubled down on its “one brand, multiple categories” strategy. This contrasts with competitors like Anta, which utilize a multi-brand portfolio to hedge against sector-wide swings. The company’s commitment to product development remains central to its pitch to consumers. “We’re not going to sacrifice our commitment to technical performance or our investment in innovation,” Qian told 36Kr during the earnings call.
The brand is banking on the strength of its signature lines and professional-grade footwear to maintain relevance. By shifting focus back to its roots as a professional sports brand, Li-Ning aims to convert its technical investments into sustained consumer interest, even as the broader Chinese sportswear sector faces a slowdown that began in 2023.
Market Context and Future Outlook
The struggle to maintain momentum in basketball shoe sales is not unique to a single manufacturer, as the industry faces shifting consumer preferences and broader economic headwinds. For Li-Ning, the path forward involves a delicate balance: maintaining the prestige of its core sports identity while proving to investors that it can spark new growth. Analysts have noted that while the 2024 results reflected a difficult market environment, the brand’s performance was largely in line with expectations.
As the company moves into the next fiscal period, the focus will remain on operational efficiency. The brand’s ability to navigate these challenges will likely depend on its success in executing its category expansion without diluting the technical performance that defines its professional gear. With no major shifts in management strategy announced beyond the current focus on stability, the brand is expected to continue its recalibration efforts throughout the remainder of the year.
For investors and fans alike, the next checkpoint for the company’s progress will be the release of mid-year operational updates, where the effectiveness of the current store-closure and innovation-led strategy will become more apparent. We will continue to monitor the company’s performance and professional sports initiatives as further data becomes available.
