Li Ning, Western Sports Brands, Xinjiang: Making Sense Of It All.

Late last month, Chinese sportswear giant Li Ning clinched a global endorsement deal with actor-singer Xiao Zhan from the boy band, X Nine.

The 29-year-old idol’s first brand campaign announcement was a sensational hit as it raked in over a billion views from consumers. More importantly, his sleek Li Ning ensemble sold out in under 20 minutes online and was also doing brisk business in the brand’s brick-and-mortar stores across China.

In recent years, Li Ning has been gradually shifting away from its perception as a Nike or Adidas knockoff – and a reliable discount outlet – to a more premium brand, through its endorsements of several NBA stars, as well as becoming the first Chinese sportswear brand to be featured in New York Fashion Week in 2018.

Li Ning’s deal with Zhan does seem to be an inspired decision to capitalise on a moment in time where patriotic Chinese consumers are shunning Western brands mired in the Xinjiang cotton controversy. Shares in Li Ning have jumped over 10.7%, while Nike, Adidas & others are receiving damaging reprisals from Chinese authorities.

This is not a flash in the pan though; support for Li Ning has been steadily building domestically, as China’s younger generation of consumers are generally spending more on quality “Made in China” goods. This has been reflected in Li Ning’s 2020 financial report with revenue increasing 4.2 per cent year-on-year to US$2.2 billion; this despite the pandemic.  The “buy local” trend and Xiao Zhan’s 28 million followers on social media will surely play influential roles in sustaining Li Ning’s rise.

Meanwhile, it will be difficult to gauge the long-term impact of the Xinjiang controversy on international sports brands. Adidas – which has been one of the hardest hit by the crisis – has faced a series of significant boycotts;

(1) losing celebrity endorsement deals from Angelababy, Jackson Wang and Jackson Yee

(2) Huawei pulling Adidas from its app store

(3) iQiyi’s painfully obvious blurring of the brand on screen during its TV show, Youth With You

However, international brands shouldn’t worry too much. While Chinese authorities can dictate social media discourse, consumer behavior often reflects a different narrative. For example, Adidas enjoyed an impressive double-digit growth in China in Q420 and also celebrated a successful Chinese New Year campaign.  This shows that both major local and international sports brands can flourish in the massive Chinese market.