Li Ning's resource endowment became a curse; the grassroots shoe factories of Jinjiang ran ahead instead
Li Honggu says Li Ning is a company made of countless mismatches: a founder whose heart was never in business, holding resources no one could match, and those resources became a curse. The Jinjiang shoe factories were started by Minnan farmers pooling household funds, carrying no baggage, making decisions only around the market — and over the long run they ran more steadily.
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Jinjiang is not the Fujian version of the Wenzhou model
Fei Xiaotong summed up Chinese rural development into four models: Sunan had government leading farmers to start factories, Wenzhou relied on individual entrepreneurs, the Pearl River Delta relied on foreign capital plus labor doing processing and assembly. Jinjiang appeared last and is the easiest to underestimate. It was not individual entrepreneurs but township enterprises started by several families and relatives pooling funds, with a quasi-private-shareholding character: in 1979, when Lin Tuqin started Jinjiang's first shoe factory, he gathered 14 village households to buy in — these people were both shareholders and employees; in 1982, when they wanted to strike out on their own, they also split off from the original factory into five factories. The money came from the Minnan-specific biao hui, sitting in a gray zone of finance, and many companies that later grew big raised their early money this way. The local government also put forward the "five permissions," permitting dividends, share-based fundraising, hired labor, and sales commissions.
— Huang ZiyiUnder the fake-medicine case, the government chose to kill the pests and protect the flowers
Jinjiang had two early quality crises. One was the "week shoes" and "street-crossing shoes": farmers didn't understand that shoes needed specialized glue, and used ordinary glue to bond soles to uppers, so they came apart after seven days — one consumer said they came apart just crossing the street. The second was the 1985 fake-medicine case: sugar ground into powder, congealed into blocks, stuffed with white fungus to pass as granules, flowing through gray channels to hospitals, reported nationwide by People's Daily. Jinjiang goods became notorious, over a thousand ground-promotion salesmen were turned away, and some hotels threw their luggage out the door. At the time, Fujian's first provincial party secretary, Xiang Nan, was very market-oriented — he expanded the Xiamen special economic zone and borrowed international loans to build Xiamen airport — and called Chendai's workshops "a flower of township enterprises," for which he was criticized as too far to the left, made five or six self-criticisms within half a year, and then stepped down. On his way out he told the people handling the fake-medicine case: kill the pests, protect the flowers; when you pour out the bathwater, don't throw the baby out with it.
— Huang ZiyiLi Ning's resource endowment became a curse instead
The Jinjiang shoe factories were all Nike's apprentices, but the first to develop the awareness of building a domestic brand was Li Ning. Li Ning founded its brand in 1990, collecting sacred flame beneath the snow mountains of the Qinghai-Tibet Plateau and passing it nationwide, with enormous impact; the registration milestones of Jinjiang brands almost all come after this — Anta applied in 1990 and registered successfully in 1991, Peak was originally named Fengdeng and changed its name in 1990-1991, and 361 Degrees was previously called Bieke. But the two paths were completely different: Li Ning carried a national halo from the moment it was founded, and in the mid-1990s, as performance doubled year after year, it set the goal of spending ten or twenty years to put a Chinese brand in the number one position among world brands; the founder himself had no heart for business and brought in professional managers, and as a result fell into crisis and internal friction again and again. The Jinjiang brands were grassroots, carried no historical baggage, and made every decision around the market.
— Huang ZiyiThe family that gave away 51% hit every node
In 1988, Ding Shizhong was not yet 18, had dropped out of middle school, and persuaded his father to give him 10,000 yuan to buy 600 to 700 pairs of shoes; he rode two days and two nights in hard seats to Beijing and became one of the first Beijing drifters. Around the same time, Li Ning was wearing Li Ning-brand clothes carrying the Asian Games sacred flame through Beijing. He wanted to sell Jinjiang shoes into Xidan and Wangfujing, but those were powerful state-run department stores, and a seventeen- or eighteen-year-old kid from Fujian simply couldn't get in; it took him a year or two of grinding before he got a counter. Another easily overlooked point is his father, Ding Hemu: the only male heir in the family, his family was actually weak in the village — Minnan clans fought over land and factory buildings, relying on having many sons and on fists, and Ding Hemu did not take part. He taught his son to give others more benefit in doing business: "give others 51% of the benefit, take only 49% yourself."
— Huang ZiyiInventory enough for the whole nation to wear for three years
Around 2000, Anta signed Kong Linghui and advertised on CCTV and shot to fame overnight; on top of the Sydney Olympics, the men's football team reaching the World Cup, and the successful Olympic bid, the whole industry frantically signed spokespeople and opened stores, with the peak year opening close to 1,000 stores. Peak founder Xu Jingnan's metaphor was "riding an elevator": a person standing still in the elevator still rises, and everyone thought that after the Beijing Olympics they would ride an even faster elevator. But two or three years after the Olympics the inventory crisis erupted: one manager described it as, even if the Jinjiang shoe factories stopped producing, the shoes in inventory would be enough for the whole Chinese population to wear for three years. The root cause was the distribution model of enfeoffment plus futures — ordering half a year in advance, the brand too far from the market, and distributors unwilling to share real sales data. Anta's response was to strengthen centralization, with Ding Shizhong personally touring stores like an emperor on campaign, covering 400 to 500-plus market points across China in the worst one or two years.
— Huang ZiyiThe book is missing the Nike-Adidas coordinate system
Li Honggu's biggest criticism of the book is that it lacks an implicit thread: the campaigns of Nike and Adidas in the Chinese market actually determined, to a greater extent, the rises and falls of Chinese brands — they are the real coordinates. Huang Ziyi agrees, but explains that there is too little detailed material on Adidas and Nike's playbook, because multinational companies have to go through procedures and discipline to accept interviews. Li Honggu also argues that Li Ning's problems cannot be explained by the professional-manager system: Li Ning is "a company made of countless mismatches," he was never happy running a business, his resource endowment far exceeded everyone else's, yet it formed a huge gap with his vision and strategy, and the resources became a curse instead. And today, after Jinjiang brands obtained capital and acquired international brands, a new problem has appeared: how to tell a story of an international brand and oneself — "capital became their curse."
— Li HongguAnta's multi-brand: independent front end, shared middle and back office
Anta's doing of FILA was learned. Li Ning was first overtaken by Nike in 2003 and lost the market's number one spot, and was the earliest to try multi-brand; Li Ning's first professional manager, Chen Yihong, also did very well with KAPPA. When Anta acquired FILA, at first it likewise slapped FILA labels on traditional Anta products; only when they wouldn't sell did it learn the hard lesson and start over: in organizational structure and process, keep the FILA team absolutely independent from the Anta team, preventing mutual influence, then poach a world-class team for design, move toward fashion and trends, and do DTC direct retail at the same time. Once it worked, Anta's multi-brand mechanism was: the retail end and the product design and R&D end each independent, sharing Anta's powerful middle and back office, including human resources, the contract-manufacturing system, and Jinjiang's industrial cluster. What Ding Shizhong now says repeatedly is: I don't want to make China's Nike, what I want to make is the world's Anta.
— Huang ZiyiOnce per-capita GDP passes $10,000, verticals take off
When Huang Ziyi interviewed Anta in 2021, an Anta vice president explained why they acquired Amer Sports, Descente, and Kolon: according to their research in European and American markets, when a country's per-capita GDP reaches $10,000, niche sports tracks begin to emerge — ice and snow, outdoor, hiking; when it reaches $20,000, these niche sports begin to flourish on a large scale. At the time of the interview, China had just crossed $10,000; now Beijing and Shanghai have already exceeded $20,000, and the national average is about $15,000, so these brands taking off may be a natural process. Where Anta is stronger than others is that it may, through a relatively advanced professional-manager consciousness, have been first to do market research and lock up these tracks.
— Huang ZiyiIn their own words · checked verbatim
It may be normal for it to have some pests, but we must kill the pests and protect the flowers, and when we pour out the bathwater, we can't throw the baby out with it.
它可能有一些虫害是正常的 但我们要除虫护花 然后倒洗澡水 不能把孩子也泼掉
Huang Ziyi32:25
I want to spend ten or twenty years, I want to put this Chinese brand in the number one position among world brands.
我要花十几二十年的时间 我要让这个中国品牌 坐上世界品牌第一的位置
Huang Ziyi37:27
Back then the company's growth was like riding an elevator — you stand still in the elevator, you do nothing at all, and you still grow very fast.
那个时候企业的发展就像坐电梯 就你人站在电梯里不动 你什么事都不干 都增长得非常快
Huang Ziyi52:30
Even if the Jinjiang shoe factories had stopped producing at the time, the shoes in their inventory would have been enough for the Chinese people to wear for three years.
哪怕当时晋江的鞋厂不生产 他们库存里的鞋子也足够中国人民穿三年
Huang Ziyi54:32
He got all the good resources, but for him the resources formed a curse.
他拿到了所有好的资源 但是资源对他来说的话呢 形成了诅咒
Li Honggu1:01:37
We have a survivor bias — what we see are the companies that survived, what we can't see are the many companies that died.
我们有一个幸存者偏差 我们看到的是活下来的企业 我们看不见的是很多死去的企业
Li Honggu1:03:39
I don't want to make China's Nike — maybe I once wanted to make China's Nike, but what I want to make now is the world's Anta.
我不要做中国的耐克 可能我曾经想做中国的耐克 但我现在要做的就是世界的安踏
Huang Ziyi1:22:53
Figures
| Number of households that bought in when Lin Tuqin started Jinjiang's first shoe factory in 1979 | 14 village households | 21:17 |
| Year Anta's trademark was formally registered | 1991 (applied 1990) | 35:27 |
| Money and purchase volume Ding Shizhong took on his first trip north in 1988 | 10,000 yuan, 600-700 pairs of shoes | 42:28 |
| Anta's revenue scale around 2003 | Over 100 million yuan, approaching 500 million yuan | 49:29 |
| Upper limit on new stores opened by a single brand in one year during the industry expansion | Close to 1,000 | 52:30 |
| Market points Ding Shizhong's store tours covered in the worst one or two years of the inventory crisis | 400-500-plus | 57:34 |
| Change in FILA's store count in China | From fewer than 50 to more than 2,000 | 1:12:45 |
| China's national per-capita GDP (around the Anta interview) | About $15,000 | 1:28:57 |
Glossary
- Three idles (idle money, idle houses, idle people)
- Jinjiang's local term for overseas remittances, vacant overseas Chinese houses, and surplus labor — the three raw conditions for starting a factory.
- Biao hui (rotating民间 credit association)
- Mutual-aid lending within Minnan's acquaintance society, sitting in a gray zone of finance, and the startup funding source for early factories.
- Five permissions
- The policy put forward by the Chendai and Jinjiang local governments: permit dividends, permit share-based fundraising, permit hired labor, permit sales commissions.
- Half-mountain theory
- When an enterprise reaches medium scale, if it can complete the modern-enterprise transformation it climbs further; if it cannot, it may fall into the abyss.
- DTC
- The brand itself opens stores and deals directly with consumers, bypassing layer upon layer of distributors.
- Flyknit
- Nike technology that knits an entire shoe upper from a single yarn, making sneakers light and breathable and overturning the leather-upper paradigm.
How to listen
Founders and investors in consumer brands, manufacturing, or family-business governance; anyone who wants to know why Li Ning and Anta took different paths.
The Ding clan ancestral hall observations from 9:58 are more anecdote — fast-forward to the Nike contract-manufacturing line at 15:58.