Comment: Smart move by Shaq and at the same time, bad news for Nike (NKE) and Adidas. Terms of the Shaq-Li Ning deal were not disclosed but the “Li Ning Shaq” line of shoes will likely be cheaper than rivals’ and that means a possibility of a much broader consumer base. It will be interesting to watch Nike and Adidas’ reaction and see if they step up marketing and/or adjust pricing. The timing of the deal ahead of the 2008 Olympics in Beijing will force Nike and Adidas to fend off a hungry Li Ning, the latter which is likely looking to move into at least the 2nd spot by the time of the games.
Haven’t been back in the states for a while so I’m not sure what sort of brand equity Shaq brings along with him but it seems his best years are well behind him.
More importantly, Li Ning isn’t a new local brand preparing to compete with the global players. Li Ning had the #1 spot in the market here a few years ago but lost #1 to Nike and #2 to Adidas. Additionally, the last low priced sneaker (Nike’s world shoe) was a large flop here. Li Ning may hold the #3 spot, but I wouldn’t count on it.