Nike: Do You Think China'S Situation Has Deteriorated So Fast?

Us sporting goods companies said Thursday that the number of new orders in Greater China (including Taiwan and Hongkong) fell by 5% over the same period last year, confirming the slowdown in the key market growth.

Foreign media news: the US sporting goods company admits that the deterioration of China's situation is fast and unexpected.

Nike (Nike) reported a reduction in its new orders in China, and said it would adjust its strategy in China.

Investors' concerns about the company's performance have led to a fall in its share price.

The US sporting goods company said Thursday that the number of new orders in Greater China (including Taiwan and Hongkong) fell by 5% compared with the same period last year, confirming that the key market growth slowed down.

Charlie Danson, President of Nike brand, said that all retailers in China are facing the problem of slowing economic growth and overstock, and consumers are becoming smarter as well. Charlie Denson

Danson told analysts: "this is a natural change that we have experienced in many markets, so it is not surprising.

What is surprising is that the change is happening quickly, just like everything else in China. "

After the announcement of Nike's performance, its share price initially dropped more than 4% in after hours trading, and then rebounded slightly, eventually dropping 3.2% to $92.9 per share.

Eric Tracy, managing director of Janney Montgomery Scott (Eric Tracy), said: "most people know that China has some difficulties, but they did not expect the situation to deteriorate so rapidly."

Nike executives say they will work with retailers to clean up stocks, improve distribution through Nike stores, and adjust product designs according to the tastes of Chinese consumers, thereby "restarting" its market in China.

Danson said, "then everyone wants to know how long this process will take. I can not give a specific date. I can only say that I am confident that we are taking the right action."

[Nike road] Adidas closed last in China factory

Transformation and upgrading: the low end of the manufacturing industry has gone, but the high end has not yet come.

Recently, it is reported that Adidas, the world's second largest sporting goods giant, will close its Suzhou plant in October.

Yesterday, Adidas officials confirmed the news to reporters, but stressed that Adidas still has more than 300 cooperative agents in China, which will not affect production. The closure of factories is due to the strategy of re integrating global resources.

Nevertheless, the industry is bound to relate this action to the sharp rise in labor costs and recruitment difficulties in the domestic manufacturing industry.

This is not a coincidence, but rather a trend.

As early as 3 years ago, when the global economic crisis broke out, Nike closed its last factory in China to reduce its "luggage" in China.

If the pnational giants like Nike and Adidas are compared to "migratory birds", the trees here are no longer green, and the land is no longer fertile.

If you want to go, you can't block it naturally.

However, in the eyes of some observers who are concerned about the pformation and upgrading of the domestic intensive manufacturing industry, the bait for attracting these migratory birds in China in the past is mostly built on the basis of low price labor force. This situation will change sooner or later along with the development of our economy and the improvement of people's living standard.

The so-called "integration of global resources"

It is understood that Adidas (Suzhou) Co., Ltd., located in Suzhou Industrial Park, is a wholly owned subsidiary of Adidas group holding 100%. Now the factory is facing closure in October of this year.

Public information shows that Adidas China is a wholly owned subsidiary of Adidas group 100%. It has registered and established a production base in Suzhou. Its trade headquarters is located in Shanghai, and has branches in Beijing and Guangzhou.

Adidas (Suzhou) Co., Ltd. was wholly registered in Suzhou industrial park at the end of 1997, mainly producing Adidas and its brand.

With nearly 200 employees, Adidas is the only private factory in China.

According to the mail reply from Adidas China headquarters, "closing the factory is considering the strategy of re integrating global resources."

In addition, there is no other explanation.

According to Xinhuanet, the Suzhou Industrial Park Management Committee said in a piece of material to the media that the park understands the needs of Adidas's global development strategy adjustment, and that this is also in line with the trend of pformation and development of Suzhou Industrial Park.

It is worth noting that the so-called "integration strategy" mentioned by Adidas has also appeared in the official statement of Nike China.

In March 2009, Nike announced the closure of the only shoe production facility in Taicang, the factory.

At that time, Nike China responded to Nandu correspondents that "the purpose is to further promote the long-term procurement integration strategy and streamline the supply chain."

Because of the similar strategy, the actions taken by Nike to close factories for three years can roughly guess Adidas's "story".

After 2009, many of Nike's original capacity in China moved to Southeast Asia, such as Indonesia and Vietnam.

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Where the cost is low, where to go.

In fact, Adidas does not deny that the closure of factories is related to rising costs, and that "global resource integration" and "rising costs" do not seem to conflict.

Looking back on the history of sporting goods manufacturing in the past decades, Adidas, Nike and other pnational sports apparel brands have been "where the cost is low."

At first, their production base was located in the origin of the brand.

Take Nike as an example, starting from cost saving, the earliest overseas production line was built in Japan.

In the next few years, the continued appreciation of the Japanese yen and the soaring cost of manpower made Nike's production costs more and more expensive in Japan.

In 1975, Nike pferred the Japanese production line to South Korea and Taiwan, China with relatively low manpower costs.

In 80s, the main production lines were moved to Fujian and Guangdong for the same reason.

In recent years, with the rise of labor costs in China, it has also aimed at Southeast Asia with lower labor costs.

Liao Jierong, an independent analyst in the apparel industry, thinks that from the trading structure of stakeholders, Nike and Adidas are very different.

On the other hand, the consumer market they face is also under pressure.

"In particular, Adidas, as a sponsor of the Olympic level, has brought about the inertia of the London Olympic Games this year. But the market demand in Europe and the United States is low, so it is hard to make plans."

A report on the textile and garment industry of KDU securities also holds similar views.

The report shows that the demand for international market is sluggish this year, and exports decline obviously. Although the recent data are stable, they are still in the low position.

It is also considered that the demand for textile and garment exports in China in the second half of the year will be more and more competitive, and the growth of export scale will remain low or negative.

"Sweatshops" are not sustainable

In response to the announcement of Adidas's closure, the industry's response was far less intense than that of Nike's factory shutdown 3 years ago.

In fact, since the beginning of 3 years ago, the so-called "advantage" decline in China has been accompanied by the emergence of economic crisis.

Therefore, Adidas's choice seems to be a matter of time.

However, 3 years ago, the voice of "pformation and upgrading" from "made in China" to "made in China" was also heard.

But Liao Jierong said that the current situation is a bit awkward - China can not get rid of the low end manufacturing industry in such a short time, which is a long-term process.

And the economic downturn of the developed countries in the world, the developing countries are unable to shoulder the heavy responsibility of consumption, this situation has arrived.

The so-called "embarrassment" is that the low end must go, the high-end does not come.

But at the same time, she pointed out that under this trend, the traditional intensive manufacturing industry is being pushed forward. In the past, the practice of attracting foreign capital by sacrificing laborers' interests must be eliminated, which is of positive significance.

In any country, sweatshops must be an unsustainable road.

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Foxconn template: manpower cost PK meager profit

How to solve the contradiction between the rising cost of manpower and the slender profit of manufacturing? Hon Hai Precision and Foxconn have been used as models.

To a large extent, Foxconn is also a helpless pformation.

However, it is proved that Foxconn can still get the premise of raising manpower cost with the help of various factories' migration adjustment, improving automation level and optimizing management process.

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In May this year, media reports said Foxconn would raise the monthly salary of mainland employees to more than 4000 yuan.

Foxconn officials said they would adjust the salaries of mainland employees according to the price level, but did not mention specific figures.

Taiwan media reported that in the speech of Terry Gou, President of Hon Hai, "let employees get a reasonable salary", Foxconn will double the salaries of mainland employees in the second half of next year.