Nike Launched Low Price Offensive

2010/7/8 12:57:00 41

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Nike and Adidas are considering entering the Chinese low-end market by reducing commodity prices.

Nike plans to expand sales to $40% to $27 billion by 2015, and Adidas plans to sell more stores in two or three tier cities at lower prices.

Affected by this news, the recent sporting goods unit continued to decline, Lining [25.50 4.51%] (02331-HK) and Anta sports [13.82 0.44%] (02020-HK) in the past week, a drop of nearly 10%, far away from the big market.

Nike

The main reason for the competition in the cheap sports shoes market is the rapid growth of disposable income of the two or three line urban residents and the broad consumer market, while the growth rate of sports goods in the first tier cities is relatively slow.

In this regard, the broker issued a report that if Nike decided to sell products with lower price in China, the average high priced domestic brands, such as Kappa and Lining, will be most affected in the short term, because some consumers in the two or three tier cities may choose Nike instead.

In fact, Nike launched a series of cheap sports shoes in February 2007, but the brand was Tailwind instead of Nike.

Now, if Nike directly launches a low price with Nike as its brand, it will launch a low price on a large scale.

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It is bound to damage the brand image of the company.

If it is not, but in the form of a separate brand to launch low-priced products, then the impact of domestic brands with more marketing resources is far less than the market expectations, after all, domestic brands have accumulated many years of operation experience in the local market, and believe that they have the ability to resist Nike's low-priced offensive.