Nike Will Build Asia's Largest Logistics Center To Effectively Reduce Costs

In the severe winter, Nike moves in China frequently, showing a strategy to dig deeper into the Chinese market. According to the Harvard Business School Survey data, in recent years, China's three largest brands in the market, Nike, Adidas and Lining, share 21%, 20% and 17% respectively. The brands are being interconnected and competing for each other from the first tier to the three tier cities. On the one hand, it announced the global layoffs, and was playing a big role in China. Nike's sporting goods giant has shown its strategy in every winter. After, the news of Nike's announcement of 1400 redundancies in the world spread like wildfire. Under the nesting of the financial tsunami, we have finished laying eggs. According to the current Nike global 35 thousand employees, 1400 people are equivalent to 4%. Compared to the last half year's drastic financial industry and the number one retail industry in the first half of the year, the percentage of layoffs is not large. It is worth noting that unlike Adidas, Nike's "continuing emphasis on China's important strategic position" is not empty talk. Recently, Nike announced that it plans to sponsor the super equipment with a price of 200 million US dollars. Then, Nike announced that it will invest nearly $100 million to establish its largest logistics center in Asia in Taicang, Jiangsu. In addition to continuing to earn Chinese money, Nike still values and consolidating China's production and logistics base. Perhaps this set of data released by Nike China can explain its motivation: China has become Nike's largest overseas market - in China, Nike has more than 4000 stores, and sales in China last year exceeded 1 billion 100 million dollars, up 50% over the same period last year. Recently, there is news that Nike will throw 15 million dollars in the 2009 season, sponsoring super equipment and a small portion of cash. It is rumoured that this sponsorship will last for 5-10 years, and the sponsorship fee will increase by 10% every year, with a total value of two hundred million dollars. Nike official told reporters that this intention is true, but the specific amount of rumors outside is reluctant to comment. It is understood that some teams temporarily have contracts with their clothing sponsors, so in 2009 Nike did not force individual clubs to use their equipment. But by 2010, after a few free teams have regained their freedom, Nike will unify the equipment of the Super League. And his old rival, Adidas, will disappear with MIZUNO and new member Kappa in the Chinese Super League. Liang Hua, an apparel industry analyst at Hua Jie consulting company, believes that through the unified sponsorship of Nike, Nike is more interested in the future. "Similar strategies can be compared with Adidas's sponsorship of the Japanese Football League in the early 90s." Liang Venlo said that the Japanese football players were assisted by Adidas to go to Germany for training. The sponsorship itself is not only a market driven but also an emotional card, giving local consumers more recognition of the brand. It is understood that in the past few years, Japan has been Adidas's second largest overseas market. From another point of view, the four words of Chinese football are still very delicate in the minds of the Chinese. "At present, the domestic sporting goods brands including Lining, Anta, PEAK and so on will focus on the more sophisticated basketball equipment in the market, and the market competition has become more intense." Liang said Venlo, "next to China's almost bottoming up football field is in an upward stage, Nike this game is very valuable bet, equivalent to a copy of the bottom." The new logistics center will help reduce costs. For the international sporting goods giants such as Nike and Adidas, China will still be a very important market in the long run. Here is a group of consumers who prefer to save money and spend money to buy their products at hundreds of thousands of dollars. But the giants have divided China's judgment as the upstream industrial chain base. Last year, Adidas CEO Herbert Heiner said that due to high inflation and the rising wages of Chinese workers, the company hopes to withdraw from China partially and move to cheaper labor areas. Since then, Adidas has further explained that as China's important production area, the absolute value of output will not drop. The implication is that maintaining the existing output is Adidas's strategic direction, but increments will not necessarily fall in China. On the other hand, Adidas is more reliant on the Chinese market, because the sales increase brought by Chinese consumers far exceeds that of the European and American markets frustrated by the financial tsunami. Adidas's strategy of light manufacturing heavy market has begun to emerge. As for Nike, its strategy still seems to be willing to regard China's upstream actions such as production and transportation as a whole. It is understood that in addition to the original logistics center in Shanghai and Guangdong, in February 17th, Nike announced that its largest logistics center in Asia has broken ground in China. Wei Hanting, vice president and general manager of Nike global, told the media that the new logistics center will be located in the Taicang Economic Development Zone of eastern China's coastal Jiangsu Province, investing nearly 100 million dollars. He said that the advanced logistics center will provide more rapid logistics services to thousands of retail outlets across China, which can shorten the delivery time by 15%. "The upstream system is supported by the Chinese market, logistics is the most direct part, and then there is production." Liang believes that since China is regarded as the most important market, such a strategy will help further reduce the intermediate costs. According to data released by Nike China, China has become Nike's largest overseas market - in China, Nike has more than 4000 stores, and sales in China last year exceeded 1 billion 100 million dollars, up 50% over the same period last year, higher than its 26% average growth rate in the Asia Pacific region. Public information also shows that at present, there are 144 contract factories in China for Nike OEM, and 57 of Nike's 185 key factories in China are located in China. More shoes and hat investment information, click here to enter the responsibility editor: Wang Xiaonan