http://online.wsj.com/public/article/SB115556538052735022-M4CsYlBNasLfLViiPlZSOomnh3M_20060821.html?mod=regionallinks
Shaquille O'Neal has a new shoe deal -- in mainland China, where basketball's
growing popularity has turned the country into the next battleground in the
global sneaker wars.
The National Basketball Association star announced the deal yesterday with
Chinese sportswear brand Li Ning, which turned the story of a 1980s Olympic
gymnastics hero of the same name into one of the country's best-known domestic
brands.
The five-year contract gives Li Ning the right to produce and market a "Li
Ning Shaq" line of professional basketball shoes and apparel only in China. The
company declined to disclose the terms of the deal.
In the fast-growing business of marketing to China's young urbanites, the
deal is important for both sides. To Li Ning, Mr. O'Neal offers a boost of
international and street-level credibility. The company in recent years has
fallen to third place in the domestic market behind Nike and Adidas.
To Mr. O'Neal, of the Miami Heat, who is one of the NBA's top earners but who
has failed to ignite sales for his own brand of shoes, the deal offers access to
a thriving market. In the U.S., Mr. O'Neal pitches "Dunkman Game Shoes" for
Payless ShoeSource. They sell for a relatively low price of $39.99, which Mr.
O'Neal has said he selected to help kids whose parents don't make much money.
Mr. O'Neal chose to lend his name to Li Ning products because "Li Ning is one
of the best Chinese brands," he said.
The company's marketing director, Abel Wu, said the venture with Mr. O'Neal
would "absolutely help us build the Li Ning brand."
Last winter, Li Ning hired the Cleveland Cavaliers' Damon Jones to star in
commercials and wear its shoes during NBA games. Earlier this month, Nike
superstar LeBron James visited China. And Reebok, which is owned by Adidas, is
endorsed by Chinese NBA star Yao Ming of the Houston Rockets.
Nike says it has annual sales in China of about $600 million. Adidas doesn't
reveal individual market sales figures, but says it is narrowing the gap with
Nike. According to estimates by Chinese sports-marketing firm Zou Marketing,
Adidas had 2005 annual sales of $385 million and Li Ning had $300 million.
Mr. O'Neal's alliance with the Chinese brand could help him overcome
perceptions of racism, which were initially sparked when Mr. O'Neal allegedly
made derogatory comments about Mr. Yao before a game. Mr. O'Neal later said he
was joking and that he and Mr. Yao were good friends, but many Chinese sports
fans were rankled nonetheless. At the announcement yesterday, Mr. O'Neal drew
snickers from the audience when he said, "I'm Shaquille O'Neal and I love
China."
Li Ning launched a special "Shaq News" Web site after the announcement, and
will roll out its print and outdoor campaign tomorrow. Mr. O'Neal this week will
visit Beijing and the city of Chengdu to promote the deal. The Shaq line will
launch in China before January, the company said.
Li Ning says it will continue using Mr. Jones, a close friend of Mr. O'Neal,
in its marketing, although he doesn't have his own name-brand Li Ning shoe.
Though the company has international ambitions, it says it won't begin heavily
marketing outside of China until after the 2008 Beijing Olympic
Games.
