Chinese brands such as Shein and Temu have taken over global shopping baskets. Sportswear brand Li Ning hopes to join them. At its peak in 2021, the company’s market value reached $30bn. But the apparel maker’s attempt to challenge the likes of Nike and Adidas is proving tricky.
In China, patriotic consumers have boosted sales of local brands in recent years. In 2022, Li Ning had a 10.4 per cent share of the market. Peer Anta had a 20.4 per cent share. Combined, they beat Nike’s 23 per cent. Li Ning’s operating margins exceeded 22 per cent too — a feat that has eluded most local apparel companies. Its flashy appearance at New York Fashion Week raised hopes that it would soon find a cross-border audience of consumers.
Yet despite these achievements, shares in Li Ning are down 82 per cent from their 2021 peak. At 11 times forward earnings, they trade at just a fifth of levels seen three years ago. Last year, Li Ning was one of the worst performing stocks on the Hang Seng index. This week it continued its downward trajectory, with the share price falling by more than a tenth.