In mid-July, just days after Li Ning Company Limited announced its acquisition of China’s third most popular badminton brand Kason Sports, Japan’s Mizuno Corp. announced it would close 200 unprofitable stores in China. While Li Ning brand is expanding through acquisition, Mizuno is decreasing its presence in the Chinese market. This contrast reflects the different fortunes experienced by domestic and foreign sports brands in the year following the Beijing Olympics.

 Li Ning, the major Chinese supplier of athletic shoes and sporting goods, paid RMB165 million (approximately US$ 24 million) for the acquisition of Kason, aiming to enlarge its presence in the badminton market. Li Ning will keep its own high-end badminton products while using Kason’s products to capture the lower-price market. This move came shortly after Li Ning sponsored China’s national badminton team and the 2009 Sudirman Cup, the world mixed team badminton championship, held in China. As you can see, Li Ning wants consumers to not only think of their brand as a generic sportswear retailer, but as a badminton specialist.

Last year, Li Ning aggressively sought sponsorship opportunities related to the Beijing Olympics to increase their brand awareness and brand recognition. The company arranged to outfit every presenter for China Central Television, the official Olympic broadcaster in China, although Adidas was the official partner of the Beijing Olympics. Li Ning’s brand campaign helped its profit grow a whopping 52.3 per cent in 2008. Given that Nike and Adidas dominate in football and basketball equipment, and that Mizuno dominates in golf, it is a smart brand positioning move by Li Ning to enter the badminton market.

While domestic brands like Li Ning are expanding, international sports giant Mizuno appears to be affected by sluggish sales. Ironically, ahead of the Beijing Olympics last year, Mizuno’s president Akito Mizuno said it would use the Olympics as an opportunity to further expand their presence in China. One year later, 200 stores are closing. Frank Sha, senior consultant of a sports branding agency, thinks Mizuno’s problem lies in its branding strategy rather than an excess of stores. Sha said Mizuno only concentrates on its products’ quality, unlike fellow Japanese brands like Sony and Canon who lead China’s consumer electronics market through their effective branding efforts. The pursuit of higher quality increases Mizuno products’ manufacturing cost which could be dragging down their profit and forcing the brand to close stores in China. Mizuno’s lack of attention to brand strategy is likely making the problem even worse.

While Mizuno is struggling in China, Li Ning opened a flagship boutique in Singapore, which marks the brand’s debut in Southeast Asia where badminton enjoys popularity as well. Will Li Ning not stop expanding its brand until it becomes a sports giant? We’ll have to wait and see.