Who Will Dominate In The US Market Nike And Adidas?

In the biggest market, the United States is not optimistic.

According to the world clothing and shoe net, Nike group is now shifting its focus to reducing the middleman's direct sales mode to consumers, which may lead to a higher profit margin.

However, some analysts are still worried about the fierce competition in the industry, and wonder whether the Nike group can maintain its advantages in the field of alternative sports apparel.

The operation of Nike group is increasingly showing.

Saturation is weakening its ability to increase sales, especially its largest market, the United States, which has been its largest and most profitable market.

Nike group has released its second quarter report in 2018 fiscal year, pointing out that poor performance in North America is mainly due to the recent competition of adidas Group in the region, resulting in a decline in the market share of Nike and Jordan brands.

For a company like Nike, it is difficult to achieve substantial sales growth.

In the second quarter of 2018, Nike group's revenue increased by 5%, but increased by 7% of its sales cost, and net income decreased 9% to 767 million US dollars in the quarter.

In the six months ended November 30th, Nike group's total revenue grew by 2% to $17 billion 620 million.

It is noteworthy that sales cost rose 5% to $9 billion 980 million in the quarter, and gross profit decreased by 1% to $7 billion 640 million.

This is not a good trend, because Nike has spent more than ever on maintaining growth.

And now,

There is greater ambition in the US market.

Adidas Group recently issued a statement saying that in view of the positive trend of the group's development in the US region and the signs of Reebok recovery of another US brand, the Group expects its US market share to increase from 15% to 20% now.

According to market analysts, the adidas Group currently accounts for about 10% of the US market.

This means that Adidas plans to further grab Nike's share in the US market, with the goal of increasing market share by 2 times.

The group's chief financial officer, Hans Ohlmeyer, said in an interview that the growth of the US market was too fast for the group's infrastructure in the US, so Adidas will set up a new logistics center in the United States this year to eliminate supply bottlenecks.

In addition, he revealed that Reebok, which has been restructured, is expected to resume growth this year, but there is still a long way to go before the Group expects.

Some analysts say that Adidas has outperformed Nike. One of the reasons is that consumers prefer casual fashion clothes and footwear at the moment.

That's why Adidas and Lululemon have been doing well in the past few years, while Nike and Under Armour have been struggling.

It is noteworthy that behind the Adidas is the shoe market that continues to encroach on Nike, which is the root cause of the slow growth of Nike, especially in the North American market.

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Adidas decided to win the chase in the US market, and Nike and the US retail industry are undergoing many changes.

As retailers did last year, Footlocker will surely have an impact on Nike.

The Nike group's new "consumer direct offensive" strategy will streamline the retail channel of products, although the group has worked with 33000 retailers before, but they will be reduced to 40 partners.

In return, these retailers will receive marketing subsidies and help to promote differentiation by concentrating on selling Nike products.

Footlocker will become one of these retailers. Its newly opened new store shows the marketing strategy of Nike, displaying Nike products in some parts of the store, and the store staff also focus on selling Nike products.

But some analysts believe that this is certainly a direct solution to this problem, but this may prevent consumers from making diversified choices.

In addition, although sales of Nike in Europe and overseas have been increasing, some analysts worry that Puma and other companies may start to grab market share just like Adidas.

David Butler, a US investment analyst, predicted that the sales target of Nike group in 2022 was US $50 billion, but it seems unlikely from the current growth rate and retail trend.

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