Nike Has Lowered Its &Nbsp Value; Launched A 300 Yuan Low Shoe Strategy.

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In the field of sportswear, Nike and Adidas have been occupying the most high-end positions. Although the two will not fight to death, they are also carrying out a seesaw battle all the time.

The end of the world cup is a sports feast. As for the performance of major sports brands, the survey report released by Nelson and McKinsey two companies' online public opinion survey company "NM Incite" released on 2 may show that when Adidas's momentum is rising, Nike will decline, and Adidas's online momentum has surpassed Nike. Under such a sew like war, the two overlords can hardly occupy the market on a large scale.

Under the condition that the high-end market has matured, it is necessary to exert great efforts in emerging markets to expand the field.

Nike grabs China's ambition

For sports brand giants Nike and Adidas, developing countries like China are not only manufacturing bases, but also "potential stocks".

Nike said bluntly: the best performing brand of Nike is the emerging market represented by China. In the third quarter of the 2009-2010 quarter, Nike's turnover increased by 7%, thanks to the good performance of the emerging markets.

Sales in the Chinese market rose by 10%.

In view of this, Nike has shown unprecedented importance to the Chinese market.

At the same time, Nike has made a prediction that in the next 5 years, its revenue in emerging markets will increase by 10% and become a key area of business development.

China's own brand is Nike's stumbling block

In the 4 quarter of 2010, the average order growth of XTEP international was the highest, reaching 23%, and China ranked second, 20%, Anta ranked third, 19%, Lining ranked fourth, and the growth rate also had two figures.

Among the Chinese sports brands, PEAK, Lining, 31st degree, Anta and so on have become listed companies, and more and more brands are rising. These leading sports brands have been deeply rooted in all the large and small cities in China.

Xu Zhihua, PEAK C E O, said that 1000 stores will be added in 2010, and at the same time accelerate the entry into the domestic primary market, competing with international high-end brands such as Nike and Adidas.

According to the sales data of Lining, the boss of China, the momentum of catching up with Nike has already been achieved in 2009.

Insiders have once said that China's domestic brand is a revolutionary strategic route to encircle cities in the countryside. Nowadays, wherever Nike and Adidas are, there will always be 3~4's Lining and Anta.

Lining, PEAK and other domestic expansion and development, but their ambition is more than domestic, Lining has opened stores to Hongkong, and even foreign markets, PEAK C E O Xu Zhihua said that the company will set up product research and development centers and sales companies in Losangeles, the United States, after becoming Lining, the second Chinese sporting goods companies in Nike base camp.

It is imperative for Nike to sink.

At present, Lining, PEAK and so on are increasing their product research and development efforts, developing their own advantages and high-end products to enhance the quality of products. At the same time, they actively carry out brand marketing through major international competitions to enhance their product image. Especially after the 2008 Olympic Games in China, Lining's brand value has made great progress in the international position.

In May, Adidas's performance in China showed that its sales in the Greater China region dropped by 15% compared with the previous year. Nike's goal of achieving an annual growth rate of 10% was more than defensive.

As for the aggressive posture of Chinese shoe enterprises, an agent of Nike said that in fact, in the domestic market, Nike encouraged agents to open stores in two or three or even four or five line cities, and offered subsidies for opening stores, so as to counter the strategy of "rural Encircling Cities" of domestic sporting goods enterprises, and also to find wider room for growth.

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According to insiders, if Nike wants to achieve sustained and rapid growth in the Chinese market, it must adjust its strategy and speed up its entry into the domestic two or three line market and even the county level market.

At present, China's two or three tier cities, the market's most acceptable footwear pricing is between 170 yuan ~250 yuan, while Nike sells shoes in China in the price of 400 yuan ~1000 yuan, the difference of 150 yuan or more restricts Nike to enter the market, and Lining and PEAK are eroding the first line Market of Nike. If they want to do a good job of sinking, the price will be the biggest bargaining chip of Nike. For this reason, UBS made a pricing proposal of 300 yuan for Nike.

The feasibility of 300 yuan pricing

Through detailed cost accounting, UBS calculated the price of Nike low price shoes, which is 300 yuan / double, which is 25% lower than the current price.

At present, Nike's cheapest sneakers are priced at 395 yuan, the cost of the distribution fee is about 134 yuan, the production cost is about 95 yuan, and the profit of Nike is 78 yuan.

According to the "300 yuan plan model" provided by the UBS team, the supplier will reduce the operating cost by 9% and the production cost by 26%. Nike and its dealers will also have to reduce the operating cost by 20% and 36% respectively.

For these purposes, Nike may shift more factories to inland China and reduce costs in product design and procurement.

Although Nike's "low price card" will reduce the profit of its suppliers and their suppliers by about 21%, the rapid growth of sales volume is expected to offset the decline in profits of all parties.

At the same time, for dealers, a large part of the sales management fee comes from the expensive store rents in the first tier cities. If the rental cost of the pferred cities is 1\3 of the first tier cities, as long as sales can reach 50% of the first tier cities, the goal of reducing sales management expenses is likely to be realized.

For Nike's low price line, many people think that it will affect the high-end image of Nike, but many people in the industry say that the price of each brand is high and low, and 300 yuan is only a product of people's quality.

Consumers who pursue high quality can still choose high priced Nike shoes, such as NOKIA mobile phones. The price ranges from 199 to 6000. Whether consumers pay the bill depends on whether the company can meet the needs of different market segments with multiple product combinations.

China's economic development in recent years is obvious to all, and the Chinese consumption power is also growing.

Today, it has surpassed the United States to become the second largest luxury consumer in the world, and as L V, Chanel and so on have been sinking to China's two or three tier cities, Nike and other sports brands will not miss this big piece of cake.

In 2010, the size of China's brand sports shoes market will reach 69 billion yuan, and by 2020, it may reach 297 billion yuan. How to grasp the two or three line market in China? Even though Nike has not made any low-priced marketing at present, the industry has already predicted that Nike's low price is not far away, which may be a huge and rapid storm.