Why Did Michael Jordan Come To China For Nike?

Eric Gao has been in the crowded crowd for several hours, only to see the brand leader of his beloved shoes.

The 18 year old student is standing outside a Rome building in old Shanghai. In the building, Michael Jordan is visiting privately to celebrate his sneakers.

The 30th anniversary place was rearranged into a retrospective exhibition.

This exhibition, called "flying space", shows the first flying Jordan shoes, an old Wheaties box, and a collage from the Hongkong entertainers on the Jordan logo (number 23 Jersey, the phrase "I came back" and six championship rings).

Gao has no way to enter the exhibition, but he is eager to see Jordan. However, this does not mean that the legend of the Chicago bulls is his favorite player. His favorite player is Lebron James -- but because of his shoes.

Gao may be the sneaker-head of American fashion people.

At first, the price of Jordan shoes in mainland China was only around $100, but its classic price soon exceeded $500, of course, if you could find them.

Gao has ten pairs.

"I like its first shoe, then second, third, fourth," he said, "then eleventh and twelfth."

I love Jordan shoes.

"To some extent, consumers like Gao are the reasons for the" flying space "exhibition.

This is part of Nike's sustainable marketing. The company creates its iconic brand to ensure that it can sell shoes at high prices - by alerting the Chinese consumers that these shoes sell performance, not just for fashion.

Matt Powell, an analyst at NPD (new product development), is a veteran sports industry observer. He once described flying Jordan as a "high-end and conspicuous consumer brand," so it is only a matter of time before the brand enters China's undeveloped luxury market.

In the streets of Shanghai and Beijing, Jordan shoes have evolved into a fashion in Bronx district or Beverly shopping center.

"Everyone in this place is dressed in Jordan," exclaimed Blake Griffin of the Losangeles clippers during his October NBA season in China.

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In China's big cities, Jordan's high quality shoes are also good for all kinds of people, including girls in short skirts, men in tight pants, couples who are shopping in the city's high-end stores, and mothers with rich pushchairs.

Although only the first pair of Jordan sneakers appeared in China in 1996, they are now everywhere - in some areas, they are even more common than any other region in the United States.

Near the old city center of Beijing, in each of the five shops close to each other, each store has a price of 4500 yuan (715 dollars) wrapped in cellophane.

One of the shopkeepers, who has been in business for two years, said that although tariffs and limited supplies made the shoes much more expensive than the US, they still sell well.

Fake goods are everywhere, but for a country that is good at imitation, the only difference between fake and genuine is probably its low price.

China is not only the largest basketball market in the world, but the trend of the trend can rapidly sweep over 20 million cities.

Although Nike did not disclose the financial situation of Jordan brand, in the recent fiscal year, China's footwear market created Nike's highest growth record - 26%, to 2 billion dollars.

In the latest quarter, Nike's sales grew by 30% in the region known as "Greater China", including Taiwan, Hongkong and Macao.

With the gradual cooling of Western Europe and the US market, the region is rapidly becoming an important market for the company with a market value of more than 100 billion.

Nike has recently said that the Jordan brand has created about $2 billion 200 million in sales worldwide this year, and the company expects sales to reach US $4 billion 500 million at the end of 2020, because the Jordan brand is opening up some other markets in the world.

In fact, these shoes are too popular, and even bring a potential hazard to Nike: they may become a fashion of temporary fanaticism.

For example, Gao, who loves collecting sports shoes, buys most of his shoes for everyday wear, but not for sports.

Success has been achieved through the support of this type of customer. This is a mixed blessing: if Jordan shoes are too hot in the streets and streets, the brand will lose its connection with basketball, and this connection will make it have credibility.

"We do not want this brand to become a fashion brand," Nike Jeanne spokesman Huang said.

In the field of sports attire, fashion brands tend to fade away, while dedicated brands are more capable of testing.

For example, in 1990s, the popularity of Fei Le shoes has soared, but this brand just attached its image to a couple of professional basketball players in the United States instead of doing more valuable things. Its sales volume finally declined rapidly.

Adidas, Nike, and perhaps Jordan, the most important reason for their popularity for decades, is that they shape themselves into a brand designed for athletes.

"To become an evergreen basketball brand, the most important product's performance," said David Weiner, an analyst at Deutsche Bank.

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Nike's problem proves this: even for a successful brand, it is difficult to manage their image in China.

On the one hand, no one will complain about the sharp increase in sales; on the other hand, the overheated sales in big cities will bring the risk of future sales decline.

This is exactly what Nike's new Jordan centred marketing campaign has to do: watch out for Jordan to become a fashionable craze.

Nike has ended its downturn in the Chinese market.

Compared with other famous Western brands, Nike has a long history in China.

(for example, Coca-Cola entered the country before the Communist takeover of China in 1949).

In 2008, Nike's sales in China reached $1 billion, but in recent years, the country has also become a blot in Nike's global record.

In 2013, Nike caused a lot of overstock because of its optimistic sales expectations.

"Their

Partners continue to buy more products, "said Susan Anderson, an analyst at FBR capital market. She also noted that other brands had suffered the same problem.

"But suddenly they hit the wall."

Nike's image of a company famous for its high quality foreign products has been damaged due to its obsolete style on shelves.

From 2012 to 2013, Nike's sales fell by 2.5%, and its sales fell for three consecutive quarters in the Chinese market that it once hoped for.

Nike finally relies on a price marketing strategy that once played a role in the US market, reversing the situation: Nike's rise in the counter trend, raising the price of its fine tailored inventory, and claiming that its annual 4%-5% price increase is reasonable.

Jordan's brand grew rapidly during the recovery.

It began to discuss the need to sponsor top players in China, just like when Nike first signed a contract with Nike, then the shoe factory was suddenly popular in big cities.

"However, only a small number of Chinese consumers buy the latest Jordan shoes purely for basketball. In fact, most of the sales of Jordan come from people who wear Jordan shoes on the streets," said Eric Tian, a former marketing manager of Jordan and a partner in photo social App Co.

He said that in China, 65% of Jordan's sales benefited from those who regarded it as a fashion brand, and only 35% of consumers valued the performance of shoes.

Nike spokesman declined to confirm this figure, but there was no rebuttal.

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Every time Tian talks with the ideal target customers of the brand, usually men who are obsessed with basketball and play basketball in professional basketball teams or twenty year old basketball teams, they can recall the highlights of Michael Jordan's career.

In 1998, he defeated the NBA finals of the Utah jazz, or his victory against Nicks.

But most Chinese consumers are too young. They do not remember those moments. They will not repeat these pictures every few weeks in the sports center.

"They never really saw Jordan's game," Tian said.

Therefore, the focus of Nike's marketing strategy is to keep telling consumers that these shoes are technological miracles. The first and most important motive for designing them is to play basketball.

However, brands are easy to be regarded as fashion labels for celebrities.

This is the reason why Nike recently released an advertisement about Michael Jordan for the first time to the Chinese audience through television and social media. This is a 120 minute inspirational advertisement described by Jordan herself.

This is the reason why Jordan himself went to China for the first time since 2004. He also stopped for a couple of NBA preseason games in Shenzhen and Shanghai, and at the same time carried out a lot of self promotion.

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Jordan's China trip triggered reports from China's state-owned media.

Xinhua news agency, the country's top news agency, conducted an exclusive interview with Jordan and followed up a number of follow-up reports.

Nike sees this journey as an opportunity to link its shoes more closely with the greatest athlete in history.

The other two top players on the Losangeles clippers, Chris Paul and Blake Griffin, are also the spokesmen of the brand.

Nike "is trying to maintain a balance between retro performance and performance," spokesman Huang said.

He and the brand endorsement athletes came here, which strengthened the brand's pursuit of high performance positioning.

(Nike refused to allow executives to be interviewed.

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Jordan's trip made the Chinese know the real Jordan - he was enthusiastic and sometimes very irritable.

In the middle of October, when Shanghai was well prepared and broadcast live in China at the same time, the former anchor Ahmad Rashad and Nike's top Jordan brand designer Tinker Hatfield laughed at the stage, saying that in 90s, Rashad had once been in the new Jordan.

The three or four months before the show were announced on the national broadcast.

"Michael, of course, wore it after you," Hatfield told Rashad.

Then Jordan went straight to the stage. No matter whether he was joking, he could not accept it. "You're the first one to wear it, huh?" he murmured.

But this interesting dialogue was not captured by the 80 Chinese journalists or photographers almost all Jordan shoes and Jordan shirts and jackets. They were listening to simultaneous interpretation on the stage.

The conversation soon changed the theme. They talked about the brand new Chinese advertisement produced by Wieden + Kennedy advertising company, which was released in the Chinese market four days in advance.

This successful advertisement proves the importance of the Chinese market.

"I hope we'll be able to see it in the United States," Jordan said eagerly.

"This is a great advertisement."

One thing we can't deny about China is that people here love basketball very much.

Mao Zedong loved this sport very much. It became the only western movement that was not banned during the chaotic Cultural Revolution.

Now, according to Wall Street analysts, basketball development will develop rapidly in China, because the State Council takes the development of national leisure sports as the emphasis.

Deutsche bank analyst Weiner believes that as of 2025, China may have 300 million players.

In the US, he estimates that half of the sales of Jordan's brand come from those who want to play.

This proportion may never reach that high in China, but Nike's focus on shoe performance has reduced its possibility of becoming a vanishing fashion brand. Weiner said, "this is authority.

This is what people pay for it.

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At the same time, Nike is still dealing with other problems in China.

A Chinese competitor, "Jordan (Qiaodan) sports" registered Jordan's Chinese trademark in 2000. The shoes produced are strikingly similar to Jordan shoes.

China's trademark law protects the first person to apply for a trademark, not the first user of the trademark.

This year, Michael Jordan was defeated in administrative proceedings against Chinese manufacturers in court, but it is reported that Jordan has planned to appeal to the Supreme Court of China.

The reason why Jordan lost the lawsuit was that "Jordan sports" only used the Chinese name of a foreign common surname, and it was difficult to identify its corresponding relationship with Michael Jordan.