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Local Brands Lost Dividends Nike Chinese Marathon

2013/7/30 20:16:00 12

China is becoming colder and the world is becoming hotter.

When ZARA, UNIQLO and other fast fashion brands enter China, consumers will be tempted by the fast response supply chain and cost-effective. How will Nike, who keeps the sport and innovation fever, inspire the potential of Chinese sports?

from March this year, Nike was wrapped in the fence near the street in the core area of Village, Sanlitun, Beijing. The original store, which was originally a collection of running, basketball, AIR JORDAN (Nike sub brand) and NIKE ID (custom service), was pformed after the recent reopening.

From a small door that is not easy to find, it was discovered that the original two storefront shop was reduced to one floor of the two floor, specializing in running category products.

Nike official does not deny that there is a cost reduction consideration for closing stores and rebuilding, but Huang Xiang Yan, senior communications director of Nike Greater China, told reporters in an interview with reporters that "Nike store's evaluation system can not only be based on the size of body size" in the future, we hope to consider from another word -- exquisite.

We hope that the special campaigns will be deepdeveloped and refined in the future.

We did encounter some challenges in China and need to adjust business models, which should be seen as a part of a long campaign.

After the release of Nike's 2013 earnings report, China's revenue in the Greater China region dropped by 5% compared to the same period last year, which is so dazzling under the 18% growth of North American revenue. P

Later, Nike CEO Mark Parke said at a conference in North America in June 27th: "China and North America are still the two largest markets in the world, Nike.

It takes time and patience to recover. We are running a marathon instead of sprint. "

lost dividend

When p, ZARA, UNIQLO and other fast fashion brands enter China, they will be tempted by fast response supply chains and cost-effective.

David Homes, P, aged 26, is a student of the computer department of Dezhou agricultural machinery University. He exercises two times a week, playing basketball, jogging and cycling regularly, and surfing on the beach during her holidays.

David Homes will choose the corresponding brand for each sport, such as running and basketball, mainly choosing Nike and Adi, and cross country bikes will wear Jcrew boots (a North American fashion brand).

David Homes said his favorite was Nike: "I value brand and technology better, especially the equipment that stars pass through."

Zhang Hao, P, aged 26, is an employee of a foreign company in China. He prefers to take exercise and exercise time to learn how to recharge and socialize, and to travel during holidays.

But Zhang Hao still prepared a pair of Nike's latest run, a target= "_blank" href= "//www.sjfzxm.com/" > shoes < /a >: "sports walking is not delayed, sometimes playing badminton is enough."

Zhang Hao said, "when you were young, there was nothing a target=" _blank "href=" //www.sjfzxm.com/ "> clothes < /a > choice. If there was a Nike, most of them could not afford to exercise, but wore clothes to wear at that time.

Of course not now. "

David Homes and Zhang Hao are the epitome of the consumption market in North America and China.

Zhang Qing, founder of Beijing key road sports consulting company, explained that in the United States, sports and even professional sports began to permeate their daily life from the time they were small, forming a highly mature, stable and subdivided sports market.

"I'm always surprised to go to the United States. 60 year old old lady swims in a shark skin swimsuit. Football fans use their equipment to equip themselves to the teeth and watch the game on TV at home."

But in the Chinese market, all sporting goods brands are experiencing a turning point: the dividends of the times are fading away, and the new gold mines are still buried deep underground.

In the past 15 years, sporting goods played a role in sports, leisure, fashion and even luxury products in China's < a target= "_blank" href= "//www.sjfzxm.com/" > clothing /a > consumer market. But when the fast fashion brands such as ZARA and gifted clothing store entered China, they used the fast response supply chain and cost-effective to seduce consumers, especially after 90 consumers.

Just as Nike's shop in Beijing's Wangfujing is located in H&M, the nine tree store is located in UNIQLO.

but the popularity and maturity of sports culture did not dissipate so quickly.

Taking China's Sports League development as an example, it is still not a business oriented, fully professional and highly commercialized business management system.

Players pay more attention to the income of sponsors rather than from the income of consumers. Naturally, there is no way to cultivate a wider consumption culture of fans.

this is the difference between China and the United States in the sporting goods market: foreign companies have announced that China is the most important market in cars, smart phones and other industries.

But for Nike, China is only the second largest market, and is quite different from the North American market: in the 2013 fiscal year, the revenue of Nike Greater China was 2 billion 450 million dollars, and the income of North America reached 10 billion 380 million dollars.

if the clock was put back to March 2009, the sales revenue of Nike in the third quarter of fiscal 2009 was 4 billion 400 million dollars, down 2% from the same period last year, but the Asia Pacific region grew by 8% to 806 million US dollars.

At this point, Nike adjusted its organizational structure, including the withdrawal of the Asia Pacific region and the independence of the Chinese region, directly responsible for the headquarters, while the United States and the Americas merged into North America.

In the past four years, the North American market, which had survived the financial crisis, rebounded strongly, while the Chinese market with dividend subsided showed a decline in performance.

"increment" market

in the three or four tier city, Nike is encountering strong resistance from local brands.

the impact of online channels on offline channels is an unavoidable topic for Nike.

Zhang Qing believes that for Nike, the impact of online offline impact on dealers' psychology is very great - dealers will not have a heart with manufacturers.

A simple example is that Taobao has a well-known sporting goods sales (mainly Nike) online shop, and there is a physical store in Hangzhou. This practice is not for consumer experience and credit endorsement, but the entity store can get Nike's authorization, so as to go through the network channel sales, and even from North America, Hongkong and other regions to sell goods to supply network sales.

Zhang Qing said: "there are some very strong retail giants in the European and American markets. The main channel for Nike to go is shopping malls. Therefore, as long as cooperation is reached, it can be quickly distributed and all kinds of strategies will be implemented forcefully.

But China lacks such a highly unified retailer, even BELLE.

There are too many agents, so the ability to control channels is relatively weak.

this is one of the bottlenecks of multinational sporting goods enterprises in China. Its sequela is that although the dividend of China's sports market is dissipating, it is not not looking for incremental opportunities, such as the three or four line cities.

But in these markets, Nike is being blocked by local brands.

Zhang Qing has counted that the top five sporting goods companies in the country have about 35000 terminals in the whole country, which is equivalent to 10 or so in each county town, which is basically saturated. "Nike's channels are hard to sink, and of course, there are brand strategy considerations.

At the same time, sporting goods supermarkets like Decathlon, which are mainly cost-effective, are also catching up with the market, and the Putian Shanzhai products, which are all over Taobao, actually constitute the encirclement and suppression of Nike in the incremental market.

it is worth mentioning that although some details are not enough to control the overall situation, it will partly affect the decline of China and North American markets.

For example, the overseas purchasing of Taobao and even the above Nike dealers all have the problem of moving goods from North America to China.

In other words, Nike's basketball products series, in North America, Lebron's James's products, which are the latest technology and design concept of Nike, occupy an absolutely strong position. But the most popular star in China is Kobe Bryant. At the moment, Kobe's career has been declining in her declining years.

Move China!

Chinese consumers are more interested in smart terminals and advanced technology than p consumers.

Chen Jiang (a pseudonym) is responsible for a close cooperation platform with all sporting goods brands in China. He told the 21CBR: "Nike is very anxious about inventory."

In fact, the sporting goods industry in China has been worried about inventory since 2008.

Chen Jiang said: "this goes back to the 2008 Olympic Games. At that time, all aspects of China's sporting goods consumer market were overly optimistic, which naturally affected production, distribution and other issues.

Nike's return policy to dealers is more humane, but a concomitant problem is that the sales executives hired by pnational sporting goods tend to pay more attention to the earnings figures during the term of office. They tend to leave the next stock pressure and accumulate pressure to a certain extent, which may be a direct reason for Nike's unsatisfactory China's financial results this year.

it is inventory pressure that makes Nike's attitude to Taobao shop a bit ambiguous: Nike has made two very large promotional activities at the end of last year and in May this year. Some popular products, such as Lebron James's latest sneakers, can even get a lower discount than the Internet in physical stores.

Therefore, some Taobao shopkeepers went to the physical store to buy them in advance.

In Chen Jiang's view, "this is probably Nike's acquiescence because they need too much inventory."

in fact, Nike acknowledged the network sales channel except its own website, only Tmall flagship store.

Taobao stores and stores will disrupt Nike's price system, but it is indeed one of Nike's ways to clean up inventory.

At the beginning of this year, Nike announced that it planned to open 40 to 50 factory stores in two or three cities. This may be a way to alleviate the current situation. But Chen Jiang believes that new problems may arise. "Nike's efforts to increase direct discount stores will affect the relationship with agency discount stores"?

in fact, Adidas and Nike face similar "Chinese style" confusion, but the coping strategies seem to be more positive.

On the one hand, the high-end fashion brands such as Y3 will increase the influence of the clover brand in the fashion industry. On the other hand, we will quickly launch low price products to seek China's incremental market.

although Nike has also made efforts in the field of fashion, for example, the fashion product series that "spray" (Nike classic basketball shoes) has been repeatedly engraved and hung back to its flag, but the core still revolves around sports.

Huang Xiangyan said: "we want others to say that Nike is cool and fashionable, but the premise is a cool and fashionable sports brand.

If the outside world says we stick to sports, this is more conservative. We don't mind. "

Nike official's "marathon" prescription for the Chinese market downturn is still the core of the sport itself, which can be summed up as two points: technological innovation and service.

The former is based on the global enterprise strategy, while the latter needs to strengthen the Chinese market.

In July 16th, Nike released four innovative technologies and new products at its headquarters in Beaverton, Oregon, USA. P

The design concept of the new product is based on the "NATURE AMPLIFIED (excitation potential)" proposed by Nike, that is, by collecting scientific data and observing the state of athletes, the natural rhythm of the body is explored, and the entity is the Nike+ platform.

Among them, Nike Free Flyknit running shoes integrated Nike Flyknit shoe upper technology and Nike Free soles technology, will soon be listed in China.

the above sounding noun is the most important innovation of Nike in recent years. It constantly seeks balance between technology, design, cost, performance, comfort and marketing.

For example, Nike Flyknit is to use new technology to save material (cost) on the basis of maintaining performance and price.

Chinese consumers may be more familiar with Nike+, a motion detection platform integrated with chips, smart terminals, wearable devices and social networking.

Of course, the price of a "chip version" sneaker is also higher than that of the ordinary version.

Chinese consumers who lack sports and fitness culture will not accept Nike+? Huang Xiangyan said: "compared with American consumers, Chinese consumers are more interested in intelligent terminals and advanced technology." P

As for services, compared with the North American market, Nike needs to give more meaning to China. The core proposition is: how to "MOVE CHINA" - let China move.

Nike will launch a summer night activity in China, taking Shanghai, Beijing and Guangzhou as the core to radiate the whole country, choose sports venues near the community and create a hot spot for urban sports, and encourage teenagers to leave the TV and sports at night.

Smape, vice president of marketing in Nike Greater China, stressed: "we are more interested in children who are more athletic than before. We encourage children who are usually away from sports and try to motivate them to encourage and share each other through social media."

"P", while the retail terminal changes have been seen as a cost cutting action, Nike officials insist that this is part of the "service".

Just like the pformation of Nike store in Sanlitun, in fact, it has made a re integration and distribution of resources with the Nike store in Zhongguancun. After the adjustment is completed, Sanlitun shop will be the first specialized store of running experience in Beijing, and the Zhongguancun store will be the first specialized basketball experience shop in the world.

Huang Xiangyan said: "China's sports market seems to be saturated, but how to develop in depth is a new proposition.

Category experience shop is an attempt.

We hope that consumers can get professional products, professional advice, training methods, technical advice, sports culture and leisure fashion products related to this sport, and more importantly, we can experience and enhance our understanding and participation in sports.

Nike Sanlitun store in Beijing, although the area and category have shrunk considerably than before, but watching the treadmill in the shop and the photos and messages of the staff shoes cabinet and the running fans on the wall feel exquisite.