Adidas, Nike And Other Brands Went To The Countryside Campaign Has Started.

As early as in the early July, when the news of Nike's push for cheap shoes in the mainland came out, the share price of several domestic sports brand enterprises listed in Hong Kong fell accordingly.

At present, the market of sports shoes and clothing in China's big cities is becoming more and more saturated, and the business of new shopping malls is not as good as before. The whole retail terminal, including department stores, is infiltrating into the three or four line market.

It also set up a platform for Nike to go to the countryside.

In early May this year, Adidas announced its first quarter results, showing that sales in the Greater China region fell 15% year-on-year.

This means that, on the one hand, the first-line market that has been familiar with these international brands has gradually become saturated. On the other hand, they must adjust their sales channels and product mix as soon as possible, so as to get into the two or three tier cities with low consumption level, rather than the natural promotion of consumers' ability to wait and wait.

In the light of the current situation, if Nike decides to sell products with lower price in China, the average high priced domestic brands, such as Lining, will bear the brunt, which will be most affected in the short term, because some consumers in the two or three tier cities may "switch" to Nike.

Especially noteworthy is that over the past few years, Lining is constantly raising the price, and now its footwear products average selling price is also about 300 yuan.

A recent order will show that Lining's footwear orders in the 3 quarter of 2010 increased by 11%.

In addition, the average price of KAPPA brand shoes in China's trend is around 370 yuan.

Liang Yuchang, a researcher at UBS Securities, said, "the impact of Nike's low-priced shoes on these brands is expected to be most obvious."

He believes that the marketing budget of domestic sports brands will be an important factor in deciding whether they can survive in this wave.

Some companies with limited marketing resources are likely to be eliminated in this encounter.

Long term high-end brands bring enough product premium to Nike and Adidas, and the premium of these products can become the advantage of their price swears when their brands are gradually returning.

In 2010, Nike released the fourth quarter earnings report in 2009, showing that the pre tax profit margin of Nike in China was 40.3%, compared with the pre tax profit margin of the North American market was only 24.2%.

40.3%, the pre tax profit margin has left enough room for Nike to cut prices.

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However, Nike's entry into the two or three tier market also has its own handicap.

Some domestic brand dealers said, "currently acting Anta, Lining and so on.

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 CEO Xu Zhihua said that the company will set up products R & D centers and sales companies in Losangeles, becoming the second Chinese sporting goods companies after Nike.

Xu Zhihua believes that Nike and other well-known brands for the impact of the two or three line cities, and did not feel the majority of pressure.

"The price reduction has double-sided influence, although low price means more sales, but high price can also deepen consumer's impression of the brand in everyone's mind. Once the brand is established, everything can get twice the result with half the effort.

If Nike launches a low price, it will subvert the entire value chain system, which will inevitably bring about the impact of values.

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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 in 2010