Nike's Rio Olympic Hotspot "One Brother" Status Is Challenged

If there are Olympic competitions between companies, then Nike It is to lose the medal unless the prize is awarded to the last one. Nike's share price has fallen by more than 10% this year. It is rated by Wall Street Goldman Sachs Group as the worst performing stock in the Dow Jones index in 2016.

The sporting goods giant's sales in the latest quarter are not as good as expected. As an important indicator to predict the next quarter's performance, the current order is equally disappointing.

This is enough to make investors anxious. Because Nike was originally placed high hopes, after all, the Olympic Games are a sporting event of global interest, while Nike is one of its official sponsors, but the sales stimulating effect from the Olympic Games is not yet obvious.

Indeed, as a businessman who spent a lot of money on Olympic sponsorship, Nike was given priority in Olympic marketing. In the next few weeks, Nike will get a lot of exposure, including athletes wearing their equipment to compete, playing multiple advertisements in the Nbc National Broadcasting Company (NBC), and marketing in social networking and media during the Olympic Games.

Nike, which is counting on Olympic energy to boost sales, has also realized the crisis of "one brother" status. The strong competitors, Adidas and Andrew, are putting great pressure on them. The North American market, which accounts for almost half of Nike's revenues, has not seen an increase in sales in the latest quarter. In Western Europe and China, although Nike's performance is still excellent, it is hard to maintain the sales and revenue growth figures that Wall Street used to see in the past.

In the Greater China market, Nike and Adidas Ranked first in the market second. However, Adidas's growth momentum has surpassed Nike's. Thanks to sales of explosive shoes such as Stan Smith and NMD, Adidas has recorded an increase of more than 30% in two consecutive quarters in Greater China.

Like many consumer company, the Chinese market is crucial for Nike's future development. As American PC companies and apple have discovered, local companies often have some advantages. Doug McIntyre, an analyst at Wall Street review website 24/7 Wall St., believes that China's local Sports brand Lining and Anta will bring more intense competition in the future.

Prior to August 4th, due to poor sales performance, coupled with the global golf industry downturn, Nike followed Adidas also announced the withdrawal of the golf club market. By the end of May this year, in the 2016 fiscal year, sales of Nike golf products decreased by 8.2% to 706 million US dollars. By contrast, consumers are more keen on Titleist, Telme and Callaway (three), which specialize in golf brand Callaway.

However, Nike's "worst" performance in the Dow this year is also due to its "excellent" performance last year. In 2015, Nike's stock price rose more than 30%, becoming one of the best performing stocks in the Dow.

CNNMoney commented that the company must now focus on maintaining the status of the Chinese market and reactivating the American market, which has been attacked by Adidas and Andrew.