Nike Expects Growth Of 10% In The Next 5 Years

After the loss of Adidas's performance in China, Nike predicted that in the next 5 years, the annual revenue of its emerging markets, including the Greater China region, will grow at around 10%.

Nike has divided the global market into six major regions, the first one is the developed regional market, that is, the North American market, the Western European market and the Japanese market; the other is the emerging market, including the Greater China, Eastern Europe and central European market, and other emerging markets.

Nike said that in the 2015 fiscal year, the annual gross revenue of emerging markets such as greater China will increase by 3 billion ~35 billion on the existing basis, increasing at a low two digit per year.

As of February 28, 2010, the total revenue of emerging markets in the first three quarters of Nike's 2009~2010 fiscal year was $3 billion 580 million. Based on this, it is estimated that the revenue of all emerging markets in Nike will be around 4 billion 800 million dollars in the whole fiscal year. In the 2015 fiscal year, this figure will turn to 7 billion 800 million ~83 billion dollars, which means that the annual growth rate should be around 10%.

Judging from the Chinese market, it is not easy for Nike to achieve annual growth rate of around 10%.

In the first three quarters of the fiscal year 2009~2010, Nike China achieved a revenue of 1 billion 277 million US dollars, down 4% from the same period last year. Although the third quarter's performance rebounded and its revenue grew by 10% over the same period, sporting goods watchers were not optimistic about Nike's development in China.

Lin Weiyue, an insider, told the first financial daily: "the goal of Nike's Greater China growth by 10% is not high. The annual growth rate of domestic sports brands is much higher."

Lining (02231.HK) and Anta (02020.HK) increased their turnover by more than 25% in 2009, and PEAK (01968.HK) increased by 51.6% in 2009.

Lin Weiyue said that the reason why domestic sports brands can achieve rapid growth is because they have stopped at the two or three tier cities in China, and because of the high price of Nike, Nike has restricted Nike stores to two or three tier cities, and only one tier cities. However, from the potential of development, the development of the domestic two or three tier cities is larger than that of the first tier cities.

Take Li Ning Co as an example, in 2009, the number of Lining brand stores in the country was 7249, with 1004 new ones, of which more than 80% of new stores and new business areas were concentrated in the two or three line market in China.

According to Nike's plan, Nike stores will be opened in the world in the next 5 years. These stores will be concentrated in the most high-end shopping places in the world, 250~300.

Nike believes that with the continued implementation of the high-end strategy, revenues in the 2015 fiscal year will reach US $27 billion, an increase of about US $8 billion compared with us $191.76 in fiscal 2009.