If the outdoor consumer market is viewed as a pyramid, Aigle from France clearly sits at the top. But can Li Ning maintain the patience and perseverance needed to succeed in a market still in its early development stages? **Discarding Kappa, Embracing Aigle: Li Ning's Strategic Move** In 2005, the domestic sports goods industry was booming. However, in July of that year, Li Ning made a bold decision by selling its Kappa franchise and dumping the brand, which wasn't performing well at the time, to Chen Yihong, then the General Manager of Beijing Dongxiang. Also in July, Li Ning formed a joint venture with Aigle International S.A. of France, Equao (China) Outdoor Sporting Goods Co., Ltd., each holding a 50% stake. The company was tasked with producing, marketing, and distributing the Aigle brand in China, focusing on outdoor clothing and footwear. Aigle is one of the most renowned French outdoor brands, known for its high technical standards and strong market presence. In 2002, it achieved a turnover of 128.5 million euros, showing steady growth. The brand initially specialized in boots and water sportswear before expanding into general outdoor activities such as hiking, camping, and urban leisure. Rubber boots are Aigle’s signature product, popular among celebrities and fashion enthusiasts. Designers like John Galliano and stars like Marion Cotillard have been seen wearing them. According to a 2005 report by the French magazine "Textiles," Aigle had only six retail outlets in China at the time, with a 2004 turnover of just 1 million euros. After the SARS outbreak in 2003, the Chinese outdoor market experienced rapid growth. Acquiring Aigle was a strategic move for Li Ning, and the CEO at the time expressed confidence in opening 450–500 stores within three years. A 50-year contract also reflected the long-term vision of both parties. **Cost-Cutting but Not Price-Cutting** Ego China aimed to position Aigle differently from competitors like The North Face and Columbia. It targeted a 28–45-year-old business-oriented consumer group, emphasizing style and urban lifestyle over professional outdoor use. Zhang Ke, General Manager of AEGO China, noted that Aigle’s customers included business travelers who needed functional yet stylish clothing and travel lovers who wanted to look good while being practical. Unlike other outdoor brands, Aigle focused on design and aesthetics, making its products more expensive than many competitors. However, this pricing strategy limited its appeal in China, where the outdoor market was still niche and less developed. Zhang Qing, president of Key Sports Consultancy, pointed out that competition was not fierce enough to allow for lower prices. Despite initial success in Beijing’s Lufthansa Mall, Aigle struggled with high pricing and competition from discounting brands like Pathfinder and Ozark. Over time, Aigle managed to reduce prices by about 20–30%, but it avoided frequent price promotions to maintain brand image. **Channel Shrinking, Profits Still Far Off** With Li Ning’s resources, Aigle benefited from its supply chain, logistics, and e-commerce systems. However, despite these advantages, Aigle failed to meet its initial targets—planning to open 350 stores in five years and reach 40 million euros in revenue by 2011. By 2007, Aigle’s performance was still underwhelming, with sales declining and dealers reducing their involvement. Zhang Hao explained that Aigle was still in the brand-building phase, focusing on direct operations rather than expansion through dealers. While 80% of sales came from directly operated stores, the company planned to increase the number of franchise locations. **Future Direction: Business and Lifestyle Positioning** The challenge now is to make Chinese consumers recognize Aigle’s quality. Despite its strong brand in Europe, Aigle’s advertising presence in China remains limited. Li Ning’s CEO, Zhang Zhiyong, emphasized that Aigle’s goal was not mass production but offering tailored solutions for specific consumer groups. Li Ning also has its own outdoor line, targeting everyday users and avoiding direct competition with Aigle. However, some experts question why Li Ning chose Aigle over other outdoor brands like Pathfinder or Ozark. Zhang Jian acknowledged the challenges ahead but stressed patience. Shareholders were more interested in long-term growth than short-term profits. As he put it, “We’re learning, and we’re getting it right.” Perhaps Li Ning is playing a long game, betting on Aigle’s potential even if it takes decades to fully realize.

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