National Tide Set Off A Wave Of Patriotism, Nike And Other Foreign Brands Lost The Chinese Market Become A Foregone Conclusion

What will Nike die of?

Die of competition from external brands? No, if one day, it must have died of itself, of losing innovation, of pride and prejudice.

Of course, today's Nike is far from death. At present, it is still the world's leading sportswear brand, with annual revenue of $46.7 billion in fiscal year 2022. Even if it lost the Chinese market for several consecutive times, Nike's market share in the Chinese market still remained the first.

　　 However, it is even more true that Nike has gradually fallen out of favor. As the consumer said, "it's not that the domestic sports brand has defeated Nike, but we have no consumer belief in Nike that you don't buy."

Before that, Nike and Adi did not notice or deliberately ignored the changes in the consumer market. Now they have to pay for the past arrogance and prejudice. The market value evaporated by 12 billion US dollars (more than 80 billion yuan) a day is the lesson of the market.

There are also a group of sportswear industry practitioners and entrepreneurs who want to catch up with Nike. With the lessons of Nike, they need to keep in awe and always be on thin ice.

Fast running Nike, lost Chinese market

　　 Go ahead and keep going. Don't stop. Don't even think about stopping until you reach your goal. Don't focus too much on where the goal is. Whatever you face, don't stop.

This is the advice given by Nike founder Phil Knight in shoe dog, and it is also the iron rule he practices.

After 50 years of running, Nike has already stood on the top of the pyramid of global sports brands. Even if it stops, there will be no fear of death.

　　 But it must also be admitted that Nike has a problem. The U.S. stock closed on June 28, local time, and Nike fell nearly 7%. Its market value evaporated by $12 billion a day. Its share price fell to $102.48 per share, a new low since August 2020.

　　 12 billion US dollars, equivalent to 1 / 3 Anta, 1 / 2 Li Ning, 2.5 special steps or 11 361 °.

Before that, Nike released the fourth quarter of fiscal year 2022, and the fourth quarter was the worst. Net income decreased by 14% to US $12.25 billion. More importantly, in the fourth quarter of Nike, the decline trend in Greater China was the most obvious, with the overall revenue falling by 19%. In addition, the overall revenue of North America also declined, with an overall decline of 5%.

　　 In fact, Nike has lost the Chinese market for three consecutive quarters. Nike's revenue in Greater China fell 5.2% to $2.16 billion in the third quarter ending February 28, 2022, according to earnings data. In the last quarter, Nike's Greater China sales fell 20% to $1.844 billion. The annual revenue of Greater China was $7.547 billion, down 9% year-on-year, and 13% excluding the impact of exchange rate changes.

In the conference call after the release of the latest financial report, the Chinese market has become the focus of attention of investors and analysts, and the word "China" was mentioned 26 times.

I don't know when the brand of "Nike" has become "fragrant" in the hearts of Chinese consumers, and this situation is not unique to itself.

　　 Adidas is facing the same dilemma, according to the China foundation. In the first quarter of 2022, adidas' sales in Greater China fell 35% year on year.

As a sportswear brand, the agency lowered the rating of Nike from "buy" to "hold", while Anta and Li Ning were both "buy" and even thought that they could "win the market".

Looking at other people's stories is always easy. When you are in it, you will find that the difficulties and miscellaneous diseases overlap. What happened to Nike and Adi? What happened?

According to Nike's analysis, the decline in performance in Greater China was mainly affected by the increase in inventory, logistics and transportation costs caused by the epidemic, which covered more than 60% of the business scope.

Indeed, in the past three years, Nike's global supply chain has been seriously affected by the epidemic. Vietnam, Indonesia and China are the most important shoe and clothing production factories of Nike, with the production proportion of 51%, 26% and 21% respectively in 2021. However, due to the difficulty of returning to work and the rising costs of labor, transportation and raw materials, the production efficiency has dropped sharply in recent three years.

For the "epidemic" reason, a number of clothing industry practitioners and analysts have agreed, but they also stressed that "epidemic" is not the only reason for Nike's failure, and the product itself and the changes in the market environment are more worthy of examination.

Why don't young people buy Nike?

Once upon a time, many young consumers were proud to have a pair of Nike.

"When you see the Nike logo, you will feel that it is not just a logo, but status and culture. You will feel that the symbol of leap is beating." With this pair of pencils, he has never forgotten the first pair of shoes in the middle school, and after that, he has become the focus of the school.

　　 Nike would never have thought that one day it would be associated with "dirt".

After the topic of "Nike's market value evaporated by more than 80 billion overnight", the hot search comment area responded more directly, "what to wear now is just like a turtle with a Nike logo" and "there are still people who buy Nike?! no mistake."

Will Nike products be your first choice? Outside a shopping mall in Haidian District of Beijing, 10 boys were randomly asked by pencil track, but less than half of them gave positive answers.

　　 Why? One consumer mentioned "attitude.". In his eyes, Nike is already an extremely conceited brand, with no service attitude to speak of, including the shop assistants who are "like to buy or not to buy".

　　 In the view of consumers, Nike's "arrogance" is reflected in all aspects.

Phil Knight said in the shoe dog that garbage dealers don't sell products to consumers at all, they sell them to products. Now Nike seems to be doing that.

　　 "No innovation" or "lack of innovation" is the intuitive feeling of consumers to Nike in recent years.

Some consumers also said, "now Nike is not without good-looking products, but good-looking designs are not cheap. High end series like ACG, which want four figures at will, can steal money, but Nike wants to give you a pair of shoes."

"What Nike gives to Chinese consumers is that you have to buy on your knees." One clothing industry practitioner said. It's also because of this arrogance. Yes, Nike has been questioned about its product strength in recent years.

Air cushion is the hard core ace that makes Nike household name. The air cushion, which is more elastic and durable than foam cotton and rubber sole, makes Nike's sports shoes have strong selling points of rebound comfort, light weight and durability.

A consumer told pendao that he wanted to buy a pair of running shoes, and his first choice was Nike, but he chose a domestic brand after being persuaded by a friend.

"In the beginning, except for the logo, I didn't feel any difference between it and the past Nike, and the price was 5, 600 yuan lower."

In today's big environment, consumers are very sensitive to the price, and expensive is the first feeling of Nike. Before, people were willing to pay for its premium. Will it still be? not always.

According to a Putian shoes and clothing industry boss in an interview with the media, after the shift of Nike production line to Southeast Asia, due to cheap labor, poor workmanship, quality inspection requirements have also decreased a lot, "a few years ago, Nike began to make environmental protection products, using recycled materials to make shoes, glue is also environmental protection, so degumming is serious."

On the black cat platform, Nike has tens of thousands of complaints, most of which are about product quality and after-sales service. The biggest difference between Putian shoes and Putian shoes is 200 pieces

　　 Of course, many consumers and analysts believe that Nike lost its market share because of its "death" 。 In March 2021, Nike was deeply involved in the "Xinjiang cotton incident". After the incident, many people said, "never bought Nike again" and "it's disgraceful to wear it.".

"It's not that the domestic sports brand has defeated Nike, but that we have no consumer belief in Nike that you don't buy." Netizens said.

Nike lost in New Trends

In recent years, with the rise of Anta, Li Ning and other domestic sports brands, the outside world generally believes that Nike's "failure" in Greater China is a certain necessity under this elimination and other advantages.

　　 There is no unified answer for the cause and effect of whether the domestic brands have seized the market share of Nike or whether Nike has pushed consumers to domestic brands.

Some practitioners said that the consumption concept of the post-95 and Post-00's has changed significantly, and they are no longer infatuated with international sports brands. Today's young people are more willing to buy domestic goods, buy national fashion goods.

Under the background of the rise of Chinese sports brands, the development of sports giants such as Nike in China has been greatly challenged. According to the data, this year's "618" sales show that Nike, Li Ning and Anta are among the top three sports brands, followed by Adidas and FILA. FILA is an Anta brand, which means that Nike and Adidas are surrounded by domestic brands.

In fact, since 2013, China's sports footwear market has been growing continuously. From the perspective of market share change, the trend of "domestic products up, overseas brand influence declining" has become increasingly obvious.

"Although people like sports, it doesn't mean they will pay high prices for related products. Consumers are returning to rationality, and the market needs more cost-effective products," one sports shoes brand entrepreneur told pencil

　　 In her view, this point is not noticed or deliberately ignored by Nike and Adi, and this is also an opportunity for practitioners and entrepreneurs 。

After Nike's fall from the altar, can domestic brands be satisfied? It may be possible in the domestic market, but on a global scale, it is difficult.

Although, in 2021, the market share of Nike and Adidas in China dropped to 40% (Nike 25.2%, Adidas 14.8%), breaking the pattern of 43% maintained from 2018 to 2020. Anta Group rose to 16.2%, surpassing Adidas to second place. Li Ning's market share rose to 8.0%. By comparing Nike with domestic sports brands, it can be found that domestic sports brands are far from becoming an influential brand in the world.

In addition, in terms of revenue volume, Nike's revenue in fiscal year 2022 is 46.7 billion US dollars (about 312.9 billion yuan); In 2021, Anta camp recorded 49.328 billion yuan, while Li Ning recorded 22.572 billion yuan. In terms of revenue volume, there is still a big gap between the latter two and the former. Nike is about 6 times of Anta and 13 times of Li Ning.

　　 However, for domestic products and new brands, it is no longer utopian to catch up with or even surpass Nike and Adi, and this possibility is becoming increasingly large.

　　 In summary, the status of Nike and Adi has been impacted. The most important thing is that they have not kept up with the new changes in China's consumer market. What are the new changes? There are consumption stratification and classification, consumer demand has become multifarious, the rise of the minority, there are also national tide revival, and the impact of the mobile Internet era.

In the past, consumers had no choice, but now in addition to Chinese brands are constantly penetrating the market, there are more brands in the sports market. The sportswear market is becoming more subdivided, and Nike and Adidas are constantly infiltrating the original comprehensive sportswear sellers. Yoga clothes, basketball shoes, marathon shoes, skiing clothes, outdoor clothing and other sports professional clothing has become the new favorite of the Chinese market, and these professional clothing also brought a number of small and beautiful brands.

As early as before the outbreak of the epidemic, a group of generation Z and Post-00 consumers had started the "trend of small number of shoes and clothing brands" on shaking tone, station B and xiaohongshu. For example, lululemon, which has been developing rapidly in recent years, has grown rapidly worldwide. The compound growth rate of lululemon's revenue from 2007 to 2019 is 25%, far higher than that of Nike and Adidas.

In addition, when Nike ADI was still signing up for sports stars with huge money as it was more than a decade ago and more than 20 years ago, Chinese products and new brands choose to find a new way. We can go there where the young people are. So they will be put into little red books, twitter, microblogs, and young people's favorite stars and E-sports.

"Those who break the old rules will always be respected." This sentence is also emphasized by Phil Knight in the book.