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Nike: China'S Market Has Strong Growth Potential

2010/9/27 10:27:00 60

The largest in the world

Sports products manufacturers

Nike's profit in the latest quarter has increased by 10%, exceeding the forecast of the previous market, and its revenue and profits in the Greater China market are also showing significant growth. The growth rate of future orders is even more global. It shows that the Greater China market has become the most important source of revenue growth for Nike overseas. Nike's leading position in China's sports products market is hard to change in the short term.

According to Nike's earnings report, this year's 6~8 global single quarter revenue reached US $4 billion 468 million, of which greater China

Market revenue

For us $460 million, an increase of 11% over the same period last year, while the Greater China market accounts for only 10.29% of the total Nike brand revenue. However, from the estimated total shipments in September to January 2011 this year, the Greater China market increased by 25%, ranking first in the sales area of Nike.

In the financial statement, Nike stressed that the Chinese market has a strong growth potential in both short and long term performance, while the sales of basketball related products continue to grow in China, and the Kobe series products continue to slaughter their rivals in the retail market.

Shaun Rein, general manager of China market research group, thinks China and others.

emerging market

Occupying nearly 65% of Nike's overseas revenue is also the most important source of profit growth in the next 5 years, and Nike's sales base in China has gradually expanded from the original Shanghai and Beijing to two or three line city markets such as Dongguan and Suzhou, showing that Nike attaches great importance to the Chinese market.

It is understood that Nike and Lining are the top two brands of sports products in China, but in 2009, the growth rate of Nike in China's market was only 21%, lower than that of Lining's 25.4%, and the sales growth of Nike in the first-line market and high-end products had obviously slowed down, and the production strategy had to be adjusted. It was announced that the price of Chinese products would be reduced by 15% next year and the parity sales strategy should be launched to try to penetrate into the two or three line market that Lining had ploughed for a long time.

At present, the retail price of Nike sneakers in the Chinese market is about 500~1000 yuan per pair (the same below), but China's local brands are relatively cheap 20%~50%. Even after a 15% price cut, Nike is still at a disadvantage in terms of price.

Analysts believe that the biggest advantage of Nike lies in its brand image and high brand loyalty, which are difficult to compete with other low-priced products.

According to Nike's earnings report, North America, Greater China and emerging markets are the most obvious areas of sales growth in the last quarter, while Japan and Western Europe are shrinking, and Japan's single quarter sales have dropped by more than 12%.

Nike also bluntly pointed out that Japan's economic weakness has been in a state of depression for more than 10 years. At present, we can only rely on rigorous financial management to slow down the contraction.