The London Olympics are in full swing, and sports brands are also competing to “bet†Olympic marketing. However, the high inventory of sports brands is still fermenting. Not only domestic brands, Nike and other international brands are also aggressively promoting marketing strategies. In the fourth quarter, sales revenue of the Greater China market, Nike's second-largest market, fell. During the quarter, the total sales income of Nike Greater China including footwear, clothing, and accessories was US$667 million, a decrease of 3.89% compared to the third quarter.
The London Olympics are in full swing, and sports brands are also competing to “bet†Olympic marketing. However, the high inventory of sports brands is still fermenting. Not only domestic brands, Nike and other international brands are also aggressively promoting marketing strategies.
“Before they had some mistakes in estimating the Chinese market,†Ma Gang, a clothing independent commentator, told the “Daily Economic News†reporter. Before Nike’s growth in the Chinese market was expected to maintain high growth every year, according to the plan to do, inventory There must be a problem. Nike’s fourth quarter report released recently also shows this trend. According to industry insiders, this indicates that high inventory levels have spread to first-tier brands.
Nike slows sales growth in China
Prior to this, the reporter went to a Nike discount store in Changning District, Shanghai. A person in charge told the reporter that at present, the minimum price of the old model is almost 40% off, and the new listing is generally at 80% off. The reporter inquired about the recent sales situation in the store. The person in charge said that “this can't be disclosed.†But from the time the reporter entered and left, the number of customers in the Nike store was also very low.
Previously, Nike released its fourth quarter report (as of May 31, 2012) shows that in the fourth quarter, as the Nike's second largest market, the sales revenue of the Greater China market has a downward trend. During the quarter, the total sales income of Nike Greater China including footwear, clothing, and accessories was US$667 million, a decrease of 3.89% compared to the third quarter.
The financial report also showed that contrary to sales, Nike's inventory growth. As of the end of May 2012, Nike's inventory reached US$3.350 billion, which represented an increase of 23.39% compared with US$2.715 billion in the same period of last year.
Ma Gang told the reporter of “Daily Economic Newsâ€: “There is a lot of inventory, and many things are not bought. (Dealers) must not dare to purchase a lot of goods. Orders will be reduced, and sales will naturally slow down.†And the slowdown in sales is bound to Will further affect the inventory.
Morgan Stanley's research report shows that in the fourth quarter of 2012, Nike's global future order growth slowed from 18% to 12%, especially in China's order growth from 20% to 2%.
In July, Nike’s flagship store of the world’s second direct-to-operate factory opened in Guangzhou WangGuo Outlets. Two days before the opening of the company’s stores, a total of 600 yuan was reduced for the entire product, which was based on three discounts. Hit 20% off. "I remember that in the first two years, Nike's 7 discounts were only enjoyed by internal employees. Now many commodities have reached a 45% discount," a consumer told Daily Economic News.
Belle International and Pou Sheng International are major distributors of Nike and Adidas Greater China, and the two major distributors have great operating pressure.
The interim report of Pou Sheng International as of the end of March 2012 shows that its inventory has reached US$554 million, an increase of 37.16% year-on-year. The report also shows that Pou Sheng International’s operating profit has fallen by 71.6% to US$12 million over the same period of last year. At the end of March, the company suffered a loss of US$15.7 million, which was a decrease of 144% compared with the US$35.5 million in the same period last year. One of the reasons why the company explained the loss was to increase the sales discount rate to customers due to its efforts to reduce the amount of stocks that are building up. As of March 31, the company’s branded agency business revenue was 3.6% lower than the same period last year to $27.6 million.
Nike wrongly judged the Chinese market caused?
The sluggish sales of sports brands and the decline in overall consumption this year are the direct reasons for Nike’s slowdown in sales. After the sports brand's rapid expansion in 2008, the homogenization competition was cruel. "The industry integration of sports brands has not yet been completed and will be more painful than other sub-sectors," said Zhang Bin, an analyst at Guojin Securities.
In the case of a bad market, Nike is being attacked both inside and outside. Adidas, a direct adversary of Nike, was pleased with its second-quarter 2012 results. According to Adidas’ public data, Adidas’ sales in Greater China amounted to 732 million euros, a year-on-year increase of 19%. Adidas forecasts its annual net profit growth from the previous 12%-17% to 15%-17%. "The difference between the management and marketing strategies of Nike and Adi is quite big," said Ma Gang.
Business analyst Chen Changsong pointed out that compared with domestic brands, Nike’s product prices are relatively high, and first-tier cities are its main battlefield.
Some analysts pointed out that one of the reasons for the slowdown in Nike's sales due to stock sales was the company's miscalculation of market forecasts. Ma Gang told the Daily Economic News reporter: “Before they (Nike) made some mistakes in estimating the Chinese market.†He pointed out that Nike’s previous expectation was that the growth of the Chinese market kept high growth every year. According to this plan, To do it, there must be a problem with inventory.
In May 2010, Nike announced that it will achieve a turnover target of US$27 billion by 2015 and achieve a cumulative operating cash flow of more than US$12 billion. Nike also said that it will actively invest in markets in developing regions such as Greater China, Central and Eastern Europe and emerging markets, and increase its annual revenue by 3 to 35 billion U.S. dollars at the end of fiscal year 2015. From the current situation, this plan is obviously too optimistic.
For analysts from Nike and other international sports brands in the Chinese market, the above analysts are still optimistic.
Zhang Bin said: “The characteristics of foreign brands are good. China’s future consumption will be more rational. The future of the company focuses on product features to win. This Nike product is very good and has advantages. It will continue to make efforts in China in the future. â€
Ma Gang believes that after a similar situation occurred in 2009, Nike and other international brands will adjust faster after experiencing high inventory, and this round of sales slowdown will not be affected so much. "Accumulated inventory will be smaller and they will have preventive measures."
“Before they had some mistakes in estimating the Chinese market,†Ma Gang, a clothing independent commentator, told the “Daily Economic News†reporter. Before Nike’s growth in the Chinese market was expected to maintain high growth every year, according to the plan to do, inventory There must be a problem. Nike’s fourth quarter report released recently also shows this trend. According to industry insiders, this indicates that high inventory levels have spread to first-tier brands.
Nike slows sales growth in China
Prior to this, the reporter went to a Nike discount store in Changning District, Shanghai. A person in charge told the reporter that at present, the minimum price of the old model is almost 40% off, and the new listing is generally at 80% off. The reporter inquired about the recent sales situation in the store. The person in charge said that “this can't be disclosed.†But from the time the reporter entered and left, the number of customers in the Nike store was also very low.
Previously, Nike released its fourth quarter report (as of May 31, 2012) shows that in the fourth quarter, as the Nike's second largest market, the sales revenue of the Greater China market has a downward trend. During the quarter, the total sales income of Nike Greater China including footwear, clothing, and accessories was US$667 million, a decrease of 3.89% compared to the third quarter.
The financial report also showed that contrary to sales, Nike's inventory growth. As of the end of May 2012, Nike's inventory reached US$3.350 billion, which represented an increase of 23.39% compared with US$2.715 billion in the same period of last year.
Ma Gang told the reporter of “Daily Economic Newsâ€: “There is a lot of inventory, and many things are not bought. (Dealers) must not dare to purchase a lot of goods. Orders will be reduced, and sales will naturally slow down.†And the slowdown in sales is bound to Will further affect the inventory.
Morgan Stanley's research report shows that in the fourth quarter of 2012, Nike's global future order growth slowed from 18% to 12%, especially in China's order growth from 20% to 2%.
In July, Nike’s flagship store of the world’s second direct-to-operate factory opened in Guangzhou WangGuo Outlets. Two days before the opening of the company’s stores, a total of 600 yuan was reduced for the entire product, which was based on three discounts. Hit 20% off. "I remember that in the first two years, Nike's 7 discounts were only enjoyed by internal employees. Now many commodities have reached a 45% discount," a consumer told Daily Economic News.
Belle International and Pou Sheng International are major distributors of Nike and Adidas Greater China, and the two major distributors have great operating pressure.
The interim report of Pou Sheng International as of the end of March 2012 shows that its inventory has reached US$554 million, an increase of 37.16% year-on-year. The report also shows that Pou Sheng International’s operating profit has fallen by 71.6% to US$12 million over the same period of last year. At the end of March, the company suffered a loss of US$15.7 million, which was a decrease of 144% compared with the US$35.5 million in the same period last year. One of the reasons why the company explained the loss was to increase the sales discount rate to customers due to its efforts to reduce the amount of stocks that are building up. As of March 31, the company’s branded agency business revenue was 3.6% lower than the same period last year to $27.6 million.
Nike wrongly judged the Chinese market caused?
The sluggish sales of sports brands and the decline in overall consumption this year are the direct reasons for Nike’s slowdown in sales. After the sports brand's rapid expansion in 2008, the homogenization competition was cruel. "The industry integration of sports brands has not yet been completed and will be more painful than other sub-sectors," said Zhang Bin, an analyst at Guojin Securities.
In the case of a bad market, Nike is being attacked both inside and outside. Adidas, a direct adversary of Nike, was pleased with its second-quarter 2012 results. According to Adidas’ public data, Adidas’ sales in Greater China amounted to 732 million euros, a year-on-year increase of 19%. Adidas forecasts its annual net profit growth from the previous 12%-17% to 15%-17%. "The difference between the management and marketing strategies of Nike and Adi is quite big," said Ma Gang.
Business analyst Chen Changsong pointed out that compared with domestic brands, Nike’s product prices are relatively high, and first-tier cities are its main battlefield.
Some analysts pointed out that one of the reasons for the slowdown in Nike's sales due to stock sales was the company's miscalculation of market forecasts. Ma Gang told the Daily Economic News reporter: “Before they (Nike) made some mistakes in estimating the Chinese market.†He pointed out that Nike’s previous expectation was that the growth of the Chinese market kept high growth every year. According to this plan, To do it, there must be a problem with inventory.
In May 2010, Nike announced that it will achieve a turnover target of US$27 billion by 2015 and achieve a cumulative operating cash flow of more than US$12 billion. Nike also said that it will actively invest in markets in developing regions such as Greater China, Central and Eastern Europe and emerging markets, and increase its annual revenue by 3 to 35 billion U.S. dollars at the end of fiscal year 2015. From the current situation, this plan is obviously too optimistic.
For analysts from Nike and other international sports brands in the Chinese market, the above analysts are still optimistic.
Zhang Bin said: “The characteristics of foreign brands are good. China’s future consumption will be more rational. The future of the company focuses on product features to win. This Nike product is very good and has advantages. It will continue to make efforts in China in the future. â€
Ma Gang believes that after a similar situation occurred in 2009, Nike and other international brands will adjust faster after experiencing high inventory, and this round of sales slowdown will not be affected so much. "Accumulated inventory will be smaller and they will have preventive measures."
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