• Wednesday, October 07, 2015

Retailers concerned as Li-Ning holds fire sale to clear stock

Staff reporter 2013-04-27 09:27 (GMT+8)
A Li-Ning store in Jiangsu province. (Photo/CFP)

A Li-Ning store in Jiangsu province. (Photo/CFP)

Leading Chinese sportswear company Li-Ning held a 48-hour online sale on April 22, offering discounts of up to 80%, the state-run China News Service reported on its website.

Most items on sale were priced between 39 yuan and 79 yuan (US$6-$13), and everything was sold before the sale period ended, said the report.

This was Li-Ning's second 48-hour sale this month aimed at clearing out its backlog of unsold stock.

The company reported a loss of 2 billion yuan (US$321 million) in 2012, the first time it had lost money since it began trading publicly in 2004. Yet the poor performance didn't prevent the company from spending 1.32 billion yuan (US$212 millon) on advertising and marketing, which included the recruitment of NBA star Dwyane Wade to endorse its products for ten years for a fee of US$100 million.

Some buyers were critical of the fire sale despite the attractive discounts, with some complaining that many of the products were from 2010 and long out of fashion, while others questioned the quality of the goods because of the low prices.

Yan Yaolong, a market analyst with the online store JD, said that while Li-Ning may have thought it was a good idea to offload its inventory, the plan could backfire in the long term, as consumers may now wait for future sales rather than pay full price for its products — or be reluctant to wear the brand if it becomes perceived as cheap.

The sales could also hurt the relationship between Li-Ning and its retailers, who complained that the low prices offered online would prevent customers from coming to their stores, said reports.

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Wang Xiaochu (王曉初)

Wang Xiaochu is president of China Telecom and an alternate member of 17th CPC Central Committee. Born: 1958 Birthplace: Weihai, Shandong province Country of Citizenship: China Education: ...