Half-year revenue of nearly 15 billion with a gross margin of 50%. Has Li Ning's 'professional card' won?

In the year 2025, with the slow recovery of the consumer market, China's sportswear industry is undergoing profound structural changes.

Recently, the domestic sportswear giant Li Ning released an interim report showing revenue growth but pressure on profit margins, reflecting both the resilience of its "single brand, multiple categories, multi-channel" strategy and the growth challenges amid intensifying industry competition.

Steady Revenue Growth and Profit Pressure: Li Ning's Dialectics of 'Quality Growth'

The financial report shows that in the first half of the year, Li Ning continued to implement its core strategy of "single brand, multiple categories, multi-channel," focusing on professional sports, further consolidating its operational foundation, and actively preparing for business development. Revenue reached 14.82 billion yuan, a year-on-year increase of 3.3%, generally in line with market expectations.

This growth rate is hard-won given the current environment of China's consumer market.

According to data from the National Bureau of Statistics, the total retail sales of consumer goods in the first half of 2025 increased by 5.0% year-on-year, while the growth rate of retail sales of clothing, footwear, and textiles was only 3.1%. Although sportswear, as a sub-sector, showed resilience, overall growth has bid farewell to the era of rapid expansion.

Against this backdrop, Li Ning's 3.3% revenue growth reflects the stability of its position as a leading brand in the industry.

The "double decline" in gross margin and net profit warrants deeper analysis. Li Ning's gross profit was 7.41 billion yuan, a year-on-year increase of 2.5%, with an overall gross margin of 50.0%, down 0.4 percentage points year-on-year. Net profit was 1.74 billion yuan, with the net profit margin dropping from 13.6% to 11.7%.

This profit trend is the result of multiple factors: on one hand, the industry-wide pressure to promote inventory clearance has suppressed profit margins; on the other hand, Li Ning has strategically increased R&D investment (up 8.7% year-on-year) and marketing efforts, particularly in preparation for its partnership with the Chinese Olympic Committee. While these measures impact short-term profits, they lay the foundation for long-term competitiveness.

From a business structure perspective, footwear products have become the main driver of growth. Benefiting from its focus on professional sports and long-term investment in technological R&D, Li Ning's professional product revenue accounted for over 60% of total revenue in the first half of the year, driving business growth. Footwear products accounted for 56% of revenue, demonstrating the brand's strong position in professional sports.

This structural change reflects the deepening of Li Ning's "professional sports" positioning—footwear products typically have stronger professional attributes and technological barriers, while apparel is more susceptible to fashion trends and market volatility.

Channel performance showed a divergent pattern of "e-commerce leading, retail under pressure." The financial report indicates that online sales and customer engagement improved, with e-commerce revenue increasing by 7.4% year-on-year, contributing the most to growth. Franchise distributor revenue grew steadily, up 4.4% year-on-year, further increasing its share to 46.5% and continuing to serve as a core pillar.

Meanwhile, retail channels faced pressure, with revenue from direct-operated stores declining by 3.4% year-on-year due to store adjustments and shifts in consumer behavior. This channel restructuring aligns with industry trends, reflecting the irreversible shift of consumer behavior toward online platforms and Li Ning's proactive strategy of "enhancing efficiency in high-tier markets and deepening penetration in emerging markets."

Deepening Professionalism and Breaking Boundaries: Li Ning's Olympic Cycle Strategy

With Li Ning officially becoming the official sportswear partner of the Chinese Olympic Committee and the Chinese Sports Delegation for 2025-2028, the company's strategy has clearly entered the "Olympic cycle." Securing this top-tier sports resource not only a significant upgrade in brand endorsement but also sets the tone for Li Ning's product development and marketing over the next three years.

The measures disclosed in the interim report show that Li Ning is attempting to maintain its focus on professional sports while seeking new growth through technological breakthroughs and category expansion, forming a unique offensive and defensive strategy.

The reinforcement of its professional moat is evident across multiple dimensions. The most direct manifestation is the continued increase in R&D investment—in the first half of 2025, Li Ning's R&D spending rose by 8.7% year-on-year. Over the past decade, Li Ning's cumulative R&D investment has exceeded 3.8 billion yuan.

This long-term commitment to technology is translating into product competitiveness. The "Super Bounce" technology launched in 2024 has been applied to multiple 2025 new products and has gained market recognition. The "Yueying 5 PRO," the first running shoe equipped with Super Bounce technology, further enhances Li Ning's technical layout in the professional running shoe matrix.

The collaboration with the China National Space Administration's News and Publicity Center has also borne fruit, with "Space Quick-Dry" and "Space Sun Protection" technologies applied to professional equipment, achieving innovative breakthroughs in cross-domain technology transfer. This "sports technology +" R&D approach not only enhances the functional barriers of products but also injects a sense of technology and modernity into the brand.

The most direct result of product specialization is reflected in the performance of core categories. Running, basketball, and comprehensive training accounted for 67% of retail sales, forming a "stable triangle" for Li Ning's performance.

Among these, the running category was particularly outstanding, with retail sales growing by 15%. In the first half of the year, Li Ning sold over 14 million pairs of running shoes across all channels, with the "Ultra Light," "Red Rabbit," and "Flying Electric" series forming a strong product matrix. The three series sold over 5.26 million pairs in six months, achieving sustained growth.

The basketball category continued its three-pronged strategy of "professional basketball + Wade series + Anti-Wu series," with signed player Yang Hansen becoming the third Chinese player drafted in the first round of the NBA, bringing rare top-tier exposure to the brand.

Another highlight in the financial report is the early layout of Olympic marketing. Although the next Winter Olympics (Milan 2026) is still some time away, Li Ning has already launched a marketing campaign themed "China's Glory, Li Ning Together," promoting its partnership with the Chinese Olympic Committee in over 5,200 stores nationwide.

While this upfront investment increases short-term costs, it gives the brand a strategic advantage—over the next three years, as the Olympic atmosphere heats up, Li Ning can systematically integrate Olympic elements into product design and marketing narratives, further strengthening its position as "China's leading professional sports brand."

While maintaining its focus on professional sports, Li Ning is also cautiously exploring category boundaries. Niche professional categories such as badminton and table tennis continue to deepen, particularly in equipment—high-end professional badminton rackets remain industry leaders.

Emerging categories such as outdoor sports, tennis, and pickleball have been identified as "high-growth potential markets" and are now strategic breakthrough directions. This "deepening core categories, refining emerging categories" strategy avoids excessive resource dispersion while capturing new consumer trends, reflecting a balanced approach.

Conclusion

Looking at Li Ning's performance in the first half of 2025, it can be described as "steady progress under pressure." The 3.3% revenue growth is stable given the industry's adjustment period, while the short-term pressure on profit margins reflects the dual impact of strategic investment and industry competition.

More importantly, the details in the financial report reveal a domestic sportswear brand's steadfast exploration of professionalism—whether through continued R&D investment, deep ties with the Chinese Olympic Committee, or innovative applications of space technology, all point to one goal: building an irreplicable professional sports moat.

In the upcoming Olympic cycle, whether this combination of "deepening professionalism + technological breakthroughs" will succeed remains to be seen.