It may seem as though Nike and Adidas have the market cornered on athletic wear in the U.S., but one Chinese retailer thinks Americans are ready for a change. Li-Ning, founded in 1989 by a gymnast who won six medals for China in the 1984 Olympic Games, already sells merchandise in 25 countries and regions in its 8,000-plus retail stores. Hoping to break into the American market, the retailer in December 2011 launched an e-commerce site to sell men's and women's sportswear exclusively online in the States.
Although it's one of the first major Chinese apparel brands to come to the U.S., it certainly won't be the last, said Ray Grady, executive vice president of Acquity Group, a Chicago-based company partnering with China's top domestic sportswear brand to help market it to Americans.
"These organizations are starting to mature, and the Chinese consumer is maturing," Grady said. "The consumer wants to wear cool, international brands now, and the Chinese brands feel like they now have to be relevant in other parts of the world to be seen as a global brand and get consideration from the new Chinese consumer."
Why focus on e-commerce?
China and the U.S. have the largest consumer markets for e-commerce; B2C e-commerce sales in China are expected to rise to $223.6 billion by the end of this year, a growth rate of more than 3,140 percent from 2010. U.S. online retail sales are expected to reach $278.9 billion by 2015, according to Forrester.
"We are seeing a growing trend of global brands expanding into the U.S. market," said Acquity CEO Chris Dalton. "Establishing a global digital presence enables brands to enter new markets and realize enormous gains with little risk."
Li-Ning's focus on e-commerce in America is a strategic move by company executives, who think they will be more successful online. The brand is marketing to a younger demographic well-versed in online ordering. The target audience also wants unique products that can't easily be found in stores.
"We are focusing on the digital channel because the traditional retail model is dead. Our customers live in a digital world and interact with brands across all of those channels," Grady said. "That's where we want to be."
Although it's too early to tell if Li-Ning's online strategy will succeed, Grady said he's confident in the product and how his company is selling it.
"There is a want for something new," Grady said. "Fathers are wearing Nike, and (kids) are always looking for the next new, cool thing. What makes it different is that you can't get it anywhere else; you are gonna stand out."
