Nike'S "One Brother" Status Encountered Unprecedented Challenges

The "one brother" status has faced unprecedented challenges.

A few days ago, the first quarter earnings of Nike group released in the 2017 fiscal year confirmed the pessimistic tone of the market. Even if the fixed exchange rate of 10% of the quarterly revenue rose, the order growth in the next half year was worse than the market expectation.

What is more noteworthy is that the world's largest sporting goods manufacturer is losing ground in the context of Adidas's strong recovery and Andrew's efforts to catch up and the rise of its distinctive brand.

Main battlefield performance decline

Nike's latest report shows that as of August 31, 2016, Nike's sales reached 9 billion 60 million US dollars, up 8% from 8 billion 414 million US dollars in the same period last year.

But the situation is not optimistic. According to Nike, the order volume increased by 5% in the next 6 months, down 4% from 9% in the same period last year, while the growth rate in the North American market was only 1%.

This is the lowest order quantity in 5 quarters, and the future order quantity is an important factor to measure the development of an enterprise.

It is worth mentioning that in addition to China and Japan, business revenue increased by 410 million US dollars and US $140 million respectively over the same period last year, rising by 12% and 39% respectively.

Nike in the major markets decreased by 4% and 19% respectively in North America and Western Europe, down by 38 million US dollars and US $93 million respectively compared with the same period last year.

Among them, the most obvious decline in emerging markets, down 87 million U.S. dollars, down 34%.

Nike's pre tax income decreased by 11% compared with the same period last year.

In addition, Nike's stock jumped 11% to $4 billion 900 million in the first quarter.

The increase in inventory is one reason why Nike's online store can face up to 25% off of its competitors.

Competitive growth

Relative to the difficult market environment of Nike, Adidas market is developing well, and the overall performance is growing rapidly.

In the two quarter of this year, Adidas's total business revenue reached 4 billion 400 million euros, the growth rate was 13%, if the exchange rate unchanged, the increase was as high as 21%.

Among them, China's business revenue rose 30%, and its turnover in the United States soared to 788 million euros, up 22.6%.

Although sales in Latin America and Russia have declined, business revenue has increased by 7.9% and 7.2% respectively.

In the first half of this year, Adidas's net profit surged 99% to 291 million euros, operating profit rose to 414 million euros, up 77% over the same period last year, far exceeding analysts' expectations.

Meanwhile,

Andemar is also far ahead of the same industry. In the first quarter, its revenue reached 1 billion US dollars, up 27.7% from the same period last year, and its quarterly net income was 6 million 344 thousand US dollars. Among them, the income in the North American home market increased by 21.5% to 827 million 100 thousand US dollars, or 82.7%, far exceeding the market expectation.

In contrast to the growth rate of competitors' performance, Nike's position in the global sports brand market has been seriously affected. Brands in North America, Western Europe and emerging markets have declined to varying degrees, with a decrease of 4%, 19% and 34% respectively.

Lack of innovation and brand injury

In the face of a strong competitor and a weak market economy, Nike, who always sits on the top of the sports brand, seems to be somewhat powerless.

The decline in the performance of its own brand is just the result of a competitor's overperformance, which has caused unprecedented market pressure for Nike.

In this regard,

Kang Lanxin, general manager of the Institute, said that Nike, as an international sports brand, is not precise enough to develop its brand image in the global and even the Chinese market.

At the same time, the rapid development of domestic brands has also affected Nike's market to a certain extent.

Vertically speaking, the production of products of different levels and styles and upgrading of products can meet the changing needs of sports enthusiasts.

Nike's competitor Adidas has not only the sports performance series performance, but also the popular traditional sports originals and sports fashion series style. Nike's brand classification is still maintained in the traditional five sports series. The old brand positioning is no longer applicable to the present society, and breaking through tradition and continuous innovation is the way of development.

It is understood that Nike has issued a bold statement - to the 2020 fiscal year revenue exceeded 50 billion dollars, which means that in the next five years Nike will maintain 63.4% of revenue growth.

The industry believes that although Nike still occupies the dominant position in the sporting goods market, the challenges from competitors Adidas and Andrew are intensifying.