China's Li Ning Revenue Up 53.8% In 2008

Chinese sports products giant Li Ning has published its financial report for 2008, which states that due to the 2008 Beijing Olympic Games, the company made total revenues of CNY6.69 billion in 2008, a year-on-year increase of 53.8%.

The company said its earnings before interest, taxes, depreciation and amortization increased by 57% to CNY1.07 billion. Of the total revenue, its Li Ning brand made the largest contribution, with the number of Li Ning brand stores increased to 6,245 and the sales of Li Ning brand products reached CNY6.35 billion, accounting for 95% of the company's total revenue.

In comparison, its four other brands, Aigle, Z-do, Double Happiness, and Lotto, made combined revenues of CNY335 million, accounting for a mere 5% of the total revenue.

Li Ning said the major reason for its performance growth was because the 2008 Beijing Olympic Games, during which the teams sponsored by Li Ning — the Chinese national gymnastic team, diving team, table tennis team, and the shooting team — accounted for 27 of the 51 gold medals won by China.

In response the pressure from competitors such as Anta, Nike, and Adidas, the second and third-tier Chinese cities had become the major markets for Li Ning. In 2008, Li Ning's newly opened stores in the second and third-tier cities accounted for 80.6% of its new stores. Meanwhile, the number of its stores in first tier cities such as Beijing and Shanghai decreased from 352 in 2007 to 310 at the end of 2008.

At the same time Anta, a major domestic competitor of Li Ning, made revenues of CNY4.63 billion in 2008, a year-on-year increase of 55% and the number of its stores had reached 5,667 by the end 2008.