Li Ning's 160 million acquisition of Kason wins the commanding heights of the badminton market

Just as the loud slogan “everything is possible”, on July 6, 2009, Li Ning Co., Ltd. formally announced that it had acquired a stake in a badminton equipment manufacturer, involving an amount of 165 million yuan. This is in 2007, Li Ning Company. After another 305 million acquisition of 57.5% stake in the famous table tennis brand "Double Happiness" another masterpiece.

The target of the acquisition was Shishi Kaisheng Sporting Goods Co., Ltd. (hereinafter referred to as Kason Sports). The company was founded in 1991 and is headquartered in Fujian. It is mainly engaged in the production of badminton rackets, feather lines, shoes and sportswear. The company's home page shows that Kason Sports has production bases in Fujian and Guangdong, with a plant area of ​​15,000 square meters. The sales network covers major cities in China, Southeast Asia and Europe. It is reported that Kaisheng brand is currently one of the three major brands in the Chinese badminton equipment market.

Rise too fast

Mr. Zhang Zhiyong, Chief Executive Officer of the Group, said that after the completion of the acquisition, the Group can combine the Kason brand's existing industry-leading production technology and R&D capabilities with the Group’s own core competitive advantages (310368 fund net worth, fund). On the other hand, they can also make full use of their advantages in sports marketing resources, which will help the Group rapidly increase its market share in the badminton field.

Founded in 1990, Li Ning has grown from a single sportswear to a specialized sportswear company with a number of product lines including sportswear, sports shoes and sports equipment. Li Ning Company successfully listed in Hong Kong on June 28, 2004. Today's Li Ning Company has taken a pivotal position in the Chinese sporting goods industry. In 2008, Li Ning also set up a special e-commerce department to conduct extensive cooperation with major domestic e-commerce platforms such as Taobao, and established Li Ning’s own e-commerce website Li Ning Mall. Over the past few years, Li Ning has been active in the multi-brand operation and has formed a multi-brand business strategy with a main brand and multiple sub-brands.

According to relevant sources in the industry, eight years ago, Li Ning Company had the idea of ​​sponsoring badminton events and began research on the badminton market in 2007.

According to a distributor of Kason Sports in Fujian, Li Ning’s acquisition of Kason Sports was actually observed by dealers in May 2008. At the ordering meeting of Kason Sports in June 2008, Li Ning The company has sent executives to attend and in July the distributors were notified to change the distribution agreement. The dealer told reporters that it was mainly due to a one-year period of running-in, so this year it was formally open to public purchase prices.

On September 20, 2008, Kason Sports held the "Spring Song and Gao Jiang, Victor's Returns" at the Shishi Bai Lai Hotel in the Spring/Summer 2009 New Products Order. In addition to the "Kason" brand founders, Wang Pingdong and Kason Sports Products Limited. The company’s lifelong consultant and the Chinese National Badminton Team coach Tang Xianhu have two other distinguished guests. They are the CEO and President of Li Ning Co., Ltd., Zhang Zhiyong, and Hong Yuru, general manager of the indoor sports equipment department of Li Ning Co., Ltd. Zhang Zhiyong also delivered a wonderful speech on the future development trend of badminton at the fair.

The distributors of the original Kason brand all participated in the new quarterly ordering meeting held by Li Ning Company during this period. The reporter has been confirmed by the dealer and Mr. Zeng, the general distributor of Kason Sports Henan.

Before the acquisition was publicized, Li Ning announced on April 23, 2009 that it officially signed a contract with the China National Badminton Team to replace the Japanese brand Yonex, who had worked with the Chinese team for 28 years, to become the gold medalist. The main sponsor. This is the fifth Chinese Olympic Gold Medal Team cooperated by the Li Ning brand following the Chinese table tennis team, the Chinese gymnastics team, the Chinese shooting team and the Chinese diving team.

At the signing ceremony, Mr. Li Ning, chairman of the Group, once stated that the group entered the badminton market and would play a role in a Chinese brand and was committed to improving the popularity, participation and influence of badminton in the world. Group Chief Executive Zhang Zhiyong revealed that this cooperation is also an important part of Li Ning’s business strategy deployment. According to a national sports survey report conducted by the State Sports General Administration, badminton is the second most popular sport in China.

At the same time, the reporter found an article related to Li Ning’s acquisition of Kason on the page of a blogger whose name was “not ugly” on the one end of the world. The blogger published this article the day after Li Ning announced the signing of a badminton team. That is, on April 24, 2009, the release time was more than two months ahead of Li Ning's official announcement.

It can thus be seen that Li Ning’s acquisition of Kason Sports is a matter of long planning and aqueducts.

CICC announced a research report on the second day after the disclosure of the acquisition, saying that Li Ning’s announcement of the acquisition of Kason Sports Products Company is another masterpiece of the company’s vertical penetration into the segmented sports field.

Acquisition is a quick way to enter new areas and quickly establish your professional status. Kason Sports has a mature brand and abundant resources in the industry. This acquisition enhances Li Ning's R&D and production capabilities.

CICC believes that entering the badminton sporting goods field will make Li Ning’s business more differentiated. Compared with professional badminton brands such as Yonex and Victory, Li Ning’s distribution advantages provide the company with a basis for rapid expansion and market integration; and the company’s product differentiation also avoids other sportswear brands such as Nike, Adidas and Anta. Direct competition. Li Ning and Kason can generate synergies in R&D, distribution networks, and promotional resources. At the same time, the complementary positioning of the two can also attract different customer groups.

CICC also stated that because Li Ning’s growth momentum is expected to be better than expected and its acquisition of Kason Sports, Li Ning’s 2009 and 2010 earnings forecasts are revised upwards by 4% and 11% to HK$1.02 and HK$1.28 per share, respectively. . The continuous expansion of Li Ning's products to sub-markets and the differentiation of its products have laid a solid foundation for the company's market integration and sustainable growth. The company has a certain amount of room for growth in the later period.

While the industry insiders appreciated the acquisition, they also expressed concern about the integrated layout of the sales channels in the later period. Because Kathy Sports is not able to make greater breakthroughs in competition with foreign big-name equipment manufacturers, Kason Sports needs to borrow ships to go to sea. In terms of Li Ning's existing reputation and reputation, integration is not difficult to negotiate. After Li Ning Company acquired Kason Sports, Li Ning Company has three product lines: table tennis, badminton and tennis. Professional sports equipment and sports shoes clothing products are beneficial to the establishment of professional sports products of Li Ning Company. Image to enhance the overall competitiveness of Li Ning's brand. However, at present, the Li Ning brand's sports shoes and clothing products are mainly based on the combination of provincial agents and direct companies. Channels are mainly store-based, combined with commercial supermarkets and sports city channels in first-tier cities. The effectiveness of engaging in sports equipment sales needs to be further verified, and whether the existing mature market layout of Kason Sports is in conflict with the existing channel integration of Li Ning, and it is currently not definitive.

Before the press release, Kason Sports dealer Mr. Zeng revealed to reporters that Li Ning temporarily did not make new distribution channels for the original Kason Sports, but he was also considering whether to distribute the Li Ning brand products at the same time.