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Sports Brand Market Tends To Be Saturated. Nike China Wears Small Shoes All Over The World.

2013/1/12 10:34:00 30

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after net profit fell 12% in the first quarter, the net income of a href= "http://sjfzxm.com/news/index_x.asp" > Nike < /a > 2013 for the second quarter of fiscal year dropped 18% again to 384 million US dollars. Among them, the Chinese market with a sales volume of 577 million yuan has dragged down its performance in the global market, with a drop of 11%, ranking first in its global market. While the decline in performance, its inventory burden is getting heavier and heavier. 
 sports brand is experiencing a cold winter in the Chinese market and tends to be saturated with market and channel space, which has delayed the continuous progress of these brands. Whether Nike's performance has shrunk, or Lining, PEAK and other domestic brands and high inventory, are the performance of the industry trend. 
 under this background, Nike's series of "downsizing" actions have aroused concern. Selling UMBRO and Cole Haan will help to concentrate resources on core brands. But at the same time, it has gradually lost the space to spanform into fashion and leisure. In view of its old rival Adidas, the continuous promotion of multi brand strategy has given it more strength to survive the winter. 
 decline in performance > a href= "http://sjfzxm.com/news/index_s.asp" > inventory < /a > high /p >
According to the financial report, in the second quarter of fiscal year 2013, Nike's revenue increased by 7% to $5 billion 960 million, slightly lower than analysts' expectations of $6 billion 10 million; continuing operating profit rose 9% to 521 million dollars over the same period; diluted earnings per share increased by 11% to 1.14 dollars in P. 
 it is worth noting that Nike's revenue in the Greater China and Western Europe markets has declined, with revenues in the Greater China region falling 11% to 577 million US dollars, while revenue from emerging markets outside China has increased by 11%. In the same period, the Japanese market grew by 11%, while the North American market recorded an increase of 17%. 
 "the most embarrassing topic in the Chinese market has become Nike's earnings report." Sports brand observer Ma Gang said Nike's total sales in China last fiscal year totaled $2 billion 500 million, accounting for more than 10% of its total sales of $24 billion 100 million. According to the investment bank, the Chinese market has contributed 30% of Nike's operating profit. Therefore, the decline in China's market performance is unacceptable to Nike. 
 in fact, the decline of Nike in the Chinese market has been revealed in its last fiscal year. In the fourth quarter of fiscal year 2012, the sales revenue of Nike China has been on the down trend. Nike Greater China includes < a target= "_blank" href= "http://www.91se91.com/" > shoes < /a > category, < a target= "_blank" href= "http://www.91se91.com/" > clothing < / _blank > accessories, etc. the total sales revenue of products is US $667 million, which is 3.89% lower than that in the third quarter. Morgan Stanley report shows that in the fourth quarter of fiscal 2012, Nike's global orders growth slowed from 18% to 12%, and China's orders grew from 20% to 2%. 
 and Nike's stock has started to grow in the same period. By the end of 5 in 2012, its stock amounted to US $3 billion 350 million, compared with us $2 billion 715 million in 2012, the growth rate was 23.39%. 
 Zhu Qinghua, a light industry researcher at CIC, said that the stock pressure of BELLE international and Baosheng international Nike Greater China is also increasing. Baosheng International's interim report in 2012 showed that its inventory reached $554 million, an increase of 37.16% over the same period last year. BELLE International said in the China Daily that the overall inventory level in the first half of the year was more than that of the same period last year, and the gross margin space was squeezed. 
 strong > saturated market /p >
 "the problem Nike faces is industrial." Ma Gang said that in 2012, the size of China's shoe and clothing market was 2 trillion yuan, and sports brand as a subdivision area, about 200 billion yuan of market size. In the past year, the whole shoe and clothing market has slowed down, but there is still growth. And sports category has been around for 200 billion years, and its market scale has been saturated. 
 from the channels of sports products, Nike, Adidas, Anta, Lining and other top ranking sports brands, each of which own 6000~7000 stores, have penetrated into the vast majority of cities in the country, and the channels are also saturated. "Because the product lines are very similar, in order to maintain growth in performance, in addition to improving the efficiency of their own stores, they have to crush their competitors' stores." Ma Gang said, but in a maturing sports industry, this is hard to do. 
 under the premise that both the market size and the channel are becoming saturated, sports brands are encountering a "cold current" impact. Domestic sports < a target= "_blank" href= "http://www.91se91.com/" > clothing < /a > brand, the two quarter of 2013, the order meeting showed that orders, including Lining, Anta, XTEP, PEAK, had declined to varying degrees. 
Compared with P, Adidas became a highlight of the sports industry in 2012. After having experienced high inventory after 2008, Adidas has suffered a long period of labor pains such as collecting channels and closing stores. But after 2011, its performance has begun to recover, and maintained a relatively high growth rate in 2012. Publicly available data show that its sales revenue in Greater China in the first half of 2012 increased by 12% over the same period last year. 
 Ma Gang believes that compared with Nike, Adidas's product line in the fashion industry is more abundant and more invested, which makes it more buffer in the face of crisis. In addition to Adidas's main brand, Adidas also has a more fashionable brand like Y-3 and clover. In terms of spokesmen, celebrities such as Fan Bingbing, Chen Yao and Eason Chan were also introduced. In terms of multi brand operation, Adidas is in front of Nike. 
 Zhu Qinghua said that the core of Adidas's inventory crisis is to cooperate with distributors, not only allowing distributors to open discount stores, but also allowing dealers to sell products in a certain proportion of old and new terminals. At the same time, it is dispatched to the dealers to supervise stores and work with distributors to tide over the crisis. However, Nike's relationship and maintenance with distributors did not form "the same risk, advance and retreat", which is not conducive to its rapid digestion of inventory. After ADI's high inventory after 2008, they set up a quick response mechanism for stores. And Nike's decision making cycle is much longer today. This is also a factor causing higher inventory. 
 Nike weight loss /p >
After announcing the sale of its brand Umbro (UMBRO) for $225 million, Nike plans to separate its shoe brand Cole Haan from P. According to foreign reports, Nike intends to sell its footwear brand Cole Haan for $500 million to Apax Partners, a private equity fund company. At present, the two sides have entered the final stage of negotiations. 
 from the perspective of marketing strategy, Nike is still insisting on its preference for its brands, while Adidas has a relatively independent promotion plan, regardless of its shamrock, Reebok or Y-3. 
Before P, Nike has shut down its sole shoe factory in China. It has stopped placing orders for many sportswear factories in Asia, and has stopped working with several Asian a target= "_blank" href= "http://www.91se91.com/" > clothing /a plant. Ma Gang said that behind the frequent switch of sub brands is actually Nike's integration of core brands, eliminating those brands that may compete with the main brands. For investors, some of their brands are more valuable. 
 Nike "downsizing", besides concentrating resources to develop core brands, it can also increase cash flow when the market is depressed. But there are also drawbacks. First of all, the decline in sales performance of the brand has been reflected in its earnings report. Secondly, when the professional sports market is gradually saturated, both Adidas and Nike need some other brands that focus on leisure and fashion to seek breakthroughs. Compared with Adidas, Nike has little room for spanformation. 
 Zhu Qinghua said that the main problem facing Nike in the Chinese market is high inventory. On the one hand, Nike needs to cooperate with distributors to advance and retreat, giving dealers support in capital, products, management and sales, thus accelerating the process of de stocking. On the other hand, it is necessary to enhance the management and treatment of terminal salesmen and avoid excessive loss of personnel, thereby affecting sales performance.