Will Nike'S Sports Brand Leader Position Be Changed?

Many people know "

"Is known."

The English name of Nike is actually the original plation of English. It is the goddess of victory. The symbol of Nike symbolizes the feather of the Greek goddess of victory and represents speed.

On the road of sports brand development, Nike is like a "goddess of victory" who is far ahead of others in the journey.

According to the world clothing shoes and hats net, today, the goddess of victory seems to be fatigued on the way forward, and begins to slow down to rest. But she does not know that others are moving closer to her, or even catching up with them.

When the goddess woke up suddenly, she found that her footsteps had slowed down a lot, so some of the equipment that had been unloaded began to light up.

But can it really speed up the pace and keep the position of the sports king?

Slower growth, Nike can not conceal fatigue

As the oldest brand in sports brand, Nike has maintained a relatively fast growth rate. It has occupied the largest market share of sports shoes for three years in a row.

In recent years, there has been a trend of slower growth. In the most potential consumer market, there has been a 6 quarter slowdown in revenue growth.

According to Nike's latest earnings report, between December 1, 2016 and February 28, 2017, Nike's total business revenue was $8 billion 432 million, an increase of 5% over the same period last year, with net profit of $1 billion 141 million, an increase of 20% compared with the same period last year, with a gross margin of 44.5%, down 1.4% from the same period last year.

Although revenue is still growing, compared with Nike, which once occupied the largest market share of sports shoes, its revenue growth has slowed down significantly.

In order to cope with the slowdown in revenue, Nike launched a "Consumer Direct Offense" plan.

According to the plan, Nike will cut 2% of the world's employees and 25% of shoes.

At present, Nike has more than seventy thousand employees around the world, and layoffs of 2% means that Nike has lost at least 1400 employees around the world.

At the same time, the reduction of 1/4 of shoes seems to focus on ZoomX, Air VaporMax, Nike React and other core brands.

In response to the declining trend of the group's growth, Nike adopted a way to reduce the majority of its brand Revenue: layoffs.

However, the purpose of Nike's layoffs is not the same as that of them. The purpose of Nike's layoffs may be to develop through e-commerce channels and reduce the number and staff of physical shops.

And reducing the style of footwear is to concentrate on building its brand.

In addition, the "Consumer Direct Offense" in addition to layoffs and shoe reduction two countermeasures, plans to reduce its business sector from six to four, the newly established four business sectors are: North America, Europe, Middle East and Africa, Greater China, Asia Pacific and Latin America, compared with the original six regional pattern of some changes.

Nike's planned business will be concentrated in 12 major cities in 10 countries, 12 of which include New York, London, Shanghai, Beijing, Losangeles, Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul and Milan, which are expected to come from these cities by 2020.

Despite Nike's slow growth in the group's revenue growth and the timely implementation of measures to reduce layoffs, reduce the types of shoes, and plan for the future of Nike, Nike still can not change the fact that revenue has slowed down for three consecutive years.

In response to the slowdown, Nike boss showed more confidence, but many people found that Nike was exhausted after the confidence.

Competitors encircling and blocking while brand image declines.

Slow growth in revenue is only a small reaction to Nike's weakness, and more or less its market share.

The sports brand is very tired, and naturally many competitors are eyeing this position.

Among them, the biggest threat to Nike is his old rival Adidas.

Three years ago, Nike's

Far from other competitors, it is the overlord of the shoe resale market.

In January 2015, Nike's Jordan Brand occupied 96% share of the resale market, while Adidas occupied less than 1% of the market.

Now, Adidas's Yeezy, Adidas Originals Stan Smith series has become the new favorite of the market, occupying 45% of the sales of the sports shoes resale market.

The winner is the loser, and Nike seems to have begun to shake the position of the king in the sports brand.

According to Adidas's 2016 earnings report, Adidas's revenue reached a record 19 billion 291 million euros, up 14% compared with the same period last year, and net profit of continuing business was 1 billion 19 million euros, an increase of 41.5% over the same period last year.

In China, Adidas's revenue in 2016 was 2 billion 944 million euros, an increase of 28% over the same period last year.

In the same year, Nike's growth rate in China showed signs of slowing down. In the four quarter of fiscal year 2016, Nike's revenue growth in Greater China was 30%, 28%, 27% and 23% respectively.

Although the overall growth rate of Nike group's sales market is the largest in China, the growth rate of Nike has obviously slowed down in the Chinese market. The growth rate of revenue in the first two quarters is 21% and 17% respectively, and the growth rate is still declining.

Unfortunately, Nike has been exposed to the "air cushion event" as the growth rate continues to decline.

Nike's Hyperdunk 2008 FTB basketball shoes sold in China are not embedded in Zoom Air air cushion as well as in propaganda.

Although Nike has made a refund on more than 300 pairs of shoes and has compensated 4500 yuan for each consumer, Nike's image in the Chinese market has been seriously damaged and can not be recovered in the short term.

It can be seen that Nike, as the world's largest sports brand, is facing a crisis of slowing market sales and being overtaken by competitors Adidas, and its market share is gradually decreasing.

In addition, the Chinese market has yet to get out of the shadow of the "air cushion door", and the brand image has dropped sharply, and the group crisis has gradually become apparent.

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Nike is still being criticized for its failure to rescue itself.

From the perspective of Nike's development, streamlining and optimizing the group structure and integrating entity and digital retailing will be useful for Nike, which will make Nike and consumers closer and better serve their athletes (consumers) better and faster.

This is also the place where Nike needs courage and determination. At present, more people are not optimistic about it.

With the launch of the Consumer Direct Offense program, Nike hopes to better serve consumers through the integration of physical and digital retail.

Mark Parker, Nike's chairman, chief executive officer and CEO, said: "in the future, the sports market will seize the initiative by meeting the changing needs of consumers.

Through Consumer Direct Offense, we will do more in the digital market, and will also pay more attention to key markets, and will deliver faster than ever before. "

Nike also said: the Express Lane program they are implementing can reduce the production cycle to half of the original production cycle.

The plan has begun operation in North America and Western Europe, and will be put into use in Shanghai, Seoul and Tokyo this summer.

The plan of "Consumer Direct Offense" also includes the establishment of a new team of Nike Direct, focusing on the integration of Nike website direct marketing and e-commerce, and strategic Wholesale partners.

In addition, Heidi O`Neill will be the president of Nike Direct, and Adam Sussman will be the chief digital officer.

Although Nike lists a series of ways to save sports brand giants in the "Consumer Direct Offense" plan, the capital market still has a bad attitude towards the sports giant Nike, which has experienced a slowdown in sales growth and squeezed by competitors.

They do not agree with Nike's layoffs and reduce the footwear style of "self rescue".

Not only that, investment institutions also joined in the camp of bad Nike, but in June 16th Nike's stock rating was cut by JP Morgan chase, and Nike's share price fell by 3.38%.

Prior to this, the Bank of America Merrill Lynch also pointed out that Nike group's current high inventory and market share were seized by Adidas group and sales of key high-end products were weak.

Today, Nike has not begun to be sworn off at the end of the night. People seem to have forgotten another version of NIKE, the goddess of victory.

Bad performance has been a feature of layoff companies, even though Nike is constantly innovating, launching plans to integrate entities with digital retails to narrow the gap with consumers.

But in such a bad environment, the position of Nike boss is still at stake.

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