Li Ning prices its badminton rackets at 380 yuan (HK$431) to 1,980 yuan a pair, about the same level as competitor Yonex, and aims to get its products into 400 of the 1,450 professional sport shops around the country this year.

Chief executive Zhang Zhiyong said this was a long-term strategy to capitalise on rising demand from mainland badminton fans and to bolster the brand image after benefiting from the Beijing Olympic frenzy when its chairman soared high above the crowd at the Bird's Nest stadium to light the Olympic cauldron.

'Nike dominates the [National Basketball Association] with about 70 per cent market share in basketball [products],' said Mr Zhang. 'This shows us that to be a market leader, we have to dominate different sport categories, starting with indoor sports.'

The firm has a clear target of regaining the top spot in the mainland market that it lost to Nike in 2001, to become one of the top five global sportswear brands within 10 years.

It plans to open its first overseas store in Singapore's Orchard Road in July to test the waters for overseas expansion, although it will keep its focus on the mainland for the next five years.

Nike and Adidas are the top two sportswear retailers on the mainland with a combined 33.7 per cent market share last year. Li Ning held 11.1 per cent, followed by Anta with 8.6 per cent, data from marketing firm Frost & Sullivan shows.

In May, Adidas posted its first sales drop in Asia as it was holding too much inventory amid a slowdown in China, forcing it to close its regional headquarters in Hong Kong and presenting an opening for Li Ning.

For the near term, some analysts prefer the stocks of Anta and China Dongxiang (Group) to Li Ning, as those two have been quick to recover from the sluggish market in the first quarter, while Li Ning has a high inventory level because it had overestimated the post-Olympic market.

According to a CIMB-GK research report, Anta and Dongxiang racked up more than 20 per cent growth in orders from distributors at their fourth-quarter trade fairs, compared with 15 per cent for Li Ning.

Both Anta and Dongxiang are traded at a discount to the more established Li Ning and many believe the gap could narrow over time.

Mr Zhang said Li Ning was looking at the balance among sales volume, pricing, discounts and inventory levels, adding that it did not want to boost sales by discounting at the expense of its brand image.

'In the past decade, the sizzling growth of the mainland sportswear market has been driven by distribution channel development - expansion in the sales network Now it's about brand value, which will be reflected in store efficiency.'