NIKE Profits Increased By 10%, With Strong Potential For Development.

According to Nike's earnings report, the global single quarter revenue of 6~8 this year reached US $4 billion 468 million, of which the revenue of the Greater China market was US $460 million, an increase of 11% over the same period last year, while the Greater China market accounted for only 10.29% of the total Nike brand revenue. However, from the estimated total shipments in September to January 2011 this year, the Great China market increased by 25%, ranking first in the growth areas of Nike sales regions.

Nike stressed in the earnings report that the Chinese market has strong growth both in the short run and in the long run.

ShaunRein, general manager of China market research group, believes that China and other emerging markets account for nearly 65% of overseas revenue from Nike, which is also the most important source of profit growth in the next 5 years. Moreover, Nike's sales base in China has gradually expanded from original Shanghai and Beijing to two or three line city markets such as Dongguan and Suzhou, showing that Nike attaches 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.