Chinese sportswear brands see growing profit as Western brands lose market share over Xinjiang cotton
Published: Mar 18, 2022 05:06 PM Updated: Mar 18, 2022 05:02 PM
Li Ning
Li Ning

Chinese sports and fashion brand Li Ning saw its profits in 2021 rise 136 percent year-on-year to 4 billion yuan ($629 million) with growing consumer support amid Western sports brands’ crackdown on cotton from Northwest China's Xinjiang Uygur Autonomous Region.

Li Ning reported its financial earnings on Friday, with a 56 percent increase in year-over-year revenue to 22.57 billion yuan in 2021. Profits rose 136 percent to 4.01 billion yuan, according to the company’s financial report. 

Li Ning was among a dozen of Chinese companies including Anta, Meters Bonwe and Semir which gained support from consumers for voicing their support of Xinjiang cotton.

Its clear stance to support the Xinjiang cotton industry and put the "use Xinjiang high quality long-staple cotton" on its label drove the company’s share price to a record high in September after sales on Tmall jumped 419 percent during May Day holiday period in May.

Prior to the release of its financial results Li Ning on Thursday pushed back against what it calls "incorrect and misleading allegations" by the US against the company, after US authorities decided to detain Li Ning's sporting goods claiming that the firm "uses North Korean labor in its supply chain." 

The rise of Chinese sportswear brands comes amid a market loss of prestige for Western brands, which used to dominate the Chinese market.

German sportswear brand Adidas said its fourth-quarter revenue ending December 31 for the region including the Chinese mainland, Hong Kong and Taiwan, fell 24 percent year-on-year due to the challenging market environment, according to the financial report released on March 9.

Meanwhile, Nike’s quarterly revenue in Greater China ending November 30, 2021 was $1.844 billion, down 20 percent year-on-year, according to a financial report on its website.

Li Ning is just one of a group of Chinese domestic brands that posted a sales and profits bonanza. 

Anta group, official sportswear provider of the Beijing 2022 Winter Olympic Games, announced record high financial results for the first half of 2021, with a 55 percent increase in revenue compared with the same period in 2020.

The company’s market value broke through the HK$500 billion ($63.95 billion) threshold for the first time last June, making it one of world’s top three sports brands.