Nike'S "Longevity" Password: Tight "Bundled" Consumers

Nike

President Charlie

In the third quarter of 2011, many famous sports in China

In the face of a good situation, what experience does Nike have to learn from domestic sporting goods companies? Where is the password that looks like a saturated market that can still live forever? Nike brand President Charlie Denson (hereinafter referred to as Charlie) has recently received an exclusive interview with reporters.

Tight binding consumers

"Compared with how to consider growth opportunities from the Chinese market and our consumers, the performance of our competitors is not important.

For us, our business model has made us grow rapidly.

Reporter: in the past five years, because of the financial crisis, NIKE revenue increased slightly in 2009, and net profit decreased. However, in the face of the uncertain global economic situation, Nike has increased its growth target in the future.

Where does the company's confidence come from?

Charlie: the most important thing is that we anticipate the economic downturn in 2009, so we can make adjustments and adaptations in advance, and redevelop our plans to maintain sustained growth. In the past 18~24 months, we have the ability to do so.

Nike's latest quarterly bulletin is quite successful. We are confident that the company will continue to grow, regardless of how the global economy fluctuates.

And one of the reasons why we are so confident is that our company has the ability to maintain close relationship with consumers and continue to introduce innovative products in the market.

Reporter: you have created the sports brand NIKE Greater China company.

In 2003, Nike China's first sales exceeded Lining, the local leader.

Because of the sub debt crisis, Lining once narrowed the gap with Nike China in 2010. But in 2011, the gap widened again. What is the secret of Nike?

Charlie: first of all, I am not a pioneer. The company has a Chinese team. We are very proud of everyone working hard.

In the past eight or nine years, they have created a fantastic growth in performance. First, they broke through the annual sales of $1 billion at the end of 2007. In the last 4 years, sales increased steadily, and sales in the 2011 fiscal year even exceeded 2 billion dollars.

We are very confident that our sales will double in the next three or four years.

I think if we go back to 2003, one of the best things we did was that we focused on working closely with Chinese consumers, telling them Nike's sports story through their own eyes, spreading Nike brand in the way they like, which is very helpful to the sales growth of the company.

Chinese consumers are very friendly and the feedback is incredibly positive. We continue to gain innovative insights and excitement.

As we have described the new technology called fusion, its insight comes from the requirements and expectations of Chinese basketball players.

China will be a huge and important part of the Nike brand in the future.

Reporter: in 2011, Li Ning Co, which mimics the operation mode of NIKE "light assets", declined in 2011, but the emphasis on independent production and channel control has been encouraging in 2011.

What do you think is the reason for this contrast? Does this mean that the possibility of Chinese local brands expecting to catch up with Nike and Adidas with the "light assets" mode is less likely?

Charlie: it must be stated that no matter whether competitors copy Nike's business model, I do not want to comment on this.

Compared to how to consider growth opportunities from the Chinese market and our consumers, the performance of our competitors is not important.

For us, our business model has increased rapidly, and we are confident that this mode will reach the figures we re predicted in June 2011.

In the 2015 fiscal year, Nike group's annual revenue will reach 28 billion ~300 billion.

It is this business mode that enables us to respond to the needs of consumers very quickly and quickly.

I think this model is effective for Nike, and we will continue to use it in China, the United States and other markets around the world.

Improving supply chain resilience

"The rise in labor costs is not the main reason for Nike manufacturers to migrate, although it does have an impact, but the real reason is that Nike needs to constantly improve its ability to adapt to the changing market."

Reporter: at present, Vietnam is already the largest manufacturer of Nike products, and China's scenery is no longer the first largest producer. Does this mean that Nike's global supply chain is further adjusted? What are the reasons behind this change?

Charlie: our manufacturing partners in China are as strong as ever.

We continue to place large orders to manufacturers, including footwear, clothing, and even some case specific orders.

In the global market, Nike's opportunity or our job is to create a diversified portfolio capability to meet the needs of Nike consumers worldwide.

I hope we can continue to work with China, and manufacturers can also produce large quantities of Nike products in China.

But we will also look for manufacturers in other places to increase the capability of Nike supply chain to meet the changing needs and allow companies to make full use of different and changing global environments.

Reporter: the labor cost of Chinese manufacturers is increasing. Is this the reason why Nike is determined to move the manufacturers to Vietnam?

Charlie: not entirely, labor costs are rising all over the world. This is not a unique phenomenon in the Chinese market. I believe the labor costs of Vietnam or other parts of the world are also rising.

We will continue to examine the labor costs of each region one by one, no matter in the short term, in the medium term or in the long run.

Moreover, when we keep looking at the rise in labor costs, we will also look forward to the rise in labour prices.

In our current plan, we have foreseen that labor costs will continue to rise, whether in China, Vietnam, Indonesia or other countries in the world that manufacture Nike products.

Therefore, the rise in labor costs is not the main reason for Nike manufacturers to migrate. Although this is true, the real reason is that Nike needs to constantly improve its ability to adapt to the changing market.

Reporter: if you are a Chinese sports brand CEO, what are the key moves you need to take? In your opinion, how can China's sports brands enter the international front camp?

Charlie: Oh, I don't think I would like to take this seat.

But since our job is to keep in touch with Chinese consumers and surprise them, it is the best measure to design innovative products and stimulate their potential for consumers.

You know, competition can always push people forward, just as we all strive to develop consumer loyalty to the brand.

These are indeed our jobs, so we will also consider how Chinese companies will compete with us.

I can only say with pleasure that I do not have to consider how competitors can do well.

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Product fashion and function are equally important.

"When we look to the future, some of the designs that are about to change from technology itself to accessible products are one of them, and these products will make our relationship deeper and more solid."

Reporter: in the past quarter, the sales of clothing in Nike Greater China declined year by year.

What does this show? There is a voice that believes that the first ten years after 2000 are ten years of rapid growth of sports brand, and the next second ten years will be ten years of leisure fashion.

Do you agree with this view?

Charlie: I think, as you have pointed out, our clothing business has been slightly weaker in the last quarter.

We also believe in the conference call after the quarterly report that this kind of weakness is one of the worst.

It obviously affects the overall performance of our business in China.

But what excites us most is that our performance in the footwear industry is accelerating.

It is true that our brand is still very strong.

The increase in shoe sales is even more exciting.

In my view, in the field of clothing, Nike is learning how to "grasp both hands" in the face of emerging opportunities, not only to improve product performance, but also to achieve performance.

When we look back at the last quarter's revenue performance, we may be missing something that is not balanced.

Therefore, our urgent task is to work very hard and find the balance as fast as possible.

Of course, taking into account the consumer preferences for sports products, I do think they have equal emphasis on product function and fashion performance.

And in the market, Nike is in a more advantageous position than others to meet the needs of consumers. This is also the goal Nike striving for. We also call it our category gene.

Our real idea is to satisfy athletes' need for self-expression in competition, training or daily life.

Moreover, through the comfort products of Nike brand, we are able to meet their highest level of competitive or daily needs.

Reporter: are you saying that Nike is good at combining fashion with sports performance? Is this also the company's pursuit?

Charlie: I think we can continuously improve the performance of our products through the excellent performance of our athletes.

Of course, we also have a lot of innovative products from products, materials and other performance improvements.

We can apply these performance innovations to more sports life products and differentiate them from other brands through different collocations or different appearance.

If you look at some of the technologies we introduced, such as Nike air cushion technology, which is probably the easiest one, its technology based good performance can even be shared with our sister company. The use of air cushion technology will make shoes more comfortable and better performance.

We firmly believe that we can both take into account.

Frankly speaking, this is one of our biggest competitive advantages.

Reporter: every CEO has its own way of perceiving the market. What secrets do you have? Taking into account the distance between your age and Nike consumer, what products do young people like and how do you get them in time?

Charlie: ha ha, for us, I think this is part of our deep community, no matter basketball community, football community or running community.

I do know very well what motivates children or athletes.

When we look to the future, some of the designs that are about to change from technology itself to accessible products are one of them, and these products will make our relationship deeper and more solid.

So when we consider the path of our business, it looks very simple.

It's not difficult to listen to athletes' statements.

And when we do listen to their voices, they will tell us what they want, what they expect and what they need.

It is our job to be anxious and anxious.

Channel sink three or four line Market

"When people ask me how to look at China, I say this is one of the most changeable places in the world.

You can't just come here once, you have to come here at least twice because the change is too big. "

Reporter: in 2009, Nike adjusted the company structure, and adjusted the organization structure of the original footwear, clothing and accessories to the matrix structure of basketball, football, running, men training, women training, extreme sports and sports life.

What is the reason for this change? How can the operation structure avoid mutual buck passing in the cross section of departments' functions and ensure the efficiency of execution?

Charlie: I think the real reason for driving and driving us to change is the changing consumer.

As we expand our business around the world, one of the things we realize is that it is essential to maintain close ties with community sports throughout the year.

It is especially important to support every team who really committed to community sports activities.

For us, driving companies to grow and even challenge the business cycle is one of the tasks.

The core of Nike's achievement is to maintain close communication with every athlete and sports group in these communities. We can enhance this communication to a deeper level.

Therefore, I firmly believe that this communication is the strongest support for Nike's success in the current economic environment.

Perhaps you will not believe that we will strive to ensure that this growth has been sustained over the past two years.

Reporter: what do you think if you are looking for a shortage of Nike?

Charlie: since I joined the company, Nike has never stopped a word.

The same is true.

I believe that we can do much better today to support our growth.

In addition, we will continue to explore new things in the field of sports.

I believe we are at a very early stage in view of the fact that technology is sufficient to support the better performance products, better training supplies, and more comfortable and pleasing sports life products and sports equipment that we may make.

I am also convinced that the new technologies that will be put into use today will create more unusual and richer consumption experiences. This experience is an important part of our relationship with consumers, like selling shoes, a jacket or a short sleeve to consumers.

Reporter: Nike has been in China for 30 years, and next year is the 40th anniversary of the whole company.

As a company's behind the scenes trader and one of the founding members of Greater China, what do you think of the future of China's sports market?

Charlie: in the past five years, I have said many times that I may come to China 20, 30 or even 40 times.

When people ask me how to look at China, I say this is one of the most changeable places in the world.

You can't just come here once, you have to come here at least twice because the change is too big.

If you only travel here, you will not be able to reach the understanding of the fact that consumers and related communities in this country change so rapidly and rapidly.

In my opinion, this is one of the most fantastic and interesting countries in the world.

Nike consumers here are important to us today.

I believe they will become more important in the future, because their ability to grow and change is amazing and inspiring and inspiring.

So, I always tell you that if you want to go to China, you have to go there two times.

Reporter: in 2011, the most notable change of Nike is the sinking of the channel. From the second tier city to the three or four line market, Nike is not worried about the limited purchasing power of the consumers there.

Charlie: I know, we will continue to expand our channel distribution and expand our footprint in tier cities.

Second tier cities, three tier cities, or even four or five tier cities will all have Nike.

I am not so concerned about how many shops Nike has in China compared to the revenue efficiency and performance of each store.

I think one of the things we spend time talking about is how well each shop is doing.

Does it continuously improve productivity?

We keep opening stores in different areas, so I do not want to look at our business with colored glasses.

After all, if consumers fail to get a wonderful experience in these stores, they will not be able to become repeat customers.

If these stores can continue to grow, I think you can know that you have done right, and you can open more stores.

Of course, we will continue to expand. One of the reasons is that we feel there are great opportunities in the Chinese market. We need to expand to cover all the markets.