Can sportswear brand Li Ning take on Starbucks, Luckin after registering its ‘Ning Coffee’ trademark in China?
- As of March 31, Li Ning had more points of sale in China than Starbucks, and was within reach of Luckin Coffee’s outlet network
- Li Ning doesn’t stand much of a chance if it competes with professional coffee brands head-on, analyst says
According to the China National Intellectual Property Administration (CNIPA), Li Ning Sports (Shanghai), a subsidiary of the company, applied for the trademark under the services category to provide food, drink and temporary accommodation on April 15. The application is currently being reviewed by the authority’s trademark office.
“Li Ning has a broad network of stores in mainland China. It can use its existing network to offer an addition of a lifestyle experience for its consumers. This is a very different strategy versus starting a coffee chain,” said Jason Yu, general manager of Kartar Worldpanel Greater China.
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There was a lot of competition in the Chinese coffee market and Li Ning will need to find its competitive edge if it wants to take on other major coffee brands, Yu said. “If Li Ning competes with other professional coffee brands head-on, it doesn’t stand much of a chance,” he added.
The market value by sales of on-premise coffee in mainland China was expected to reach 75.8 billion yuan (US$11.3 billion) by 2026, growing at a 10.9 per cent compound annual growth rate (CAGR) from an estimated 45.1 billion in 2021, according to a report published by research firm Mintel in November last year.
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The total number of outlets in China was expected to grow at a CAGR of 6.6 per cent over the same period to reach 187,000 stores, a flatter growth than the market value due to the long education journey to improve general consumers’ understanding of coffee knowledge, according to Mintel research analyst Rika Huang.
Li Ning hopes to focus on improving its customers’ in-store shopping experience by providing coffee services, it told the Post. “Providing coffee services in stores will be an innovative attempt by Li Ning to focus on the consumer experience on the retail end,” it said.