Nike'S "First Brother" Status Encountered An Unprecedented Challenge

　　 Nike The status of "the first brother" has encountered unprecedented challenges. A few days ago, Nike Group released its financial report for the first quarter of fiscal year 2017, which confirmed the pessimistic view of the market on the company. Even though the revenue in the current quarter rose at a fixed exchange rate of 10%, the order growth in the next six months was worse than the market expectation. What is more noteworthy is that under the background of the strong recovery of Adidas, Andema's catching up and the rise of independent brands with different characteristics, this world's largest sporting goods manufacturer is losing ground.

　 Performance decline in main battlefield

According to Nike's latest financial report, as of August 31, 2016, Nike's sales reached $9.06 billion, up 8% from $8.414 billion in the same period last year. However, the situation is not optimistic. According to Nike's prediction, the order volume in the next six months will only grow by 5%, down 4% from the 9% growth in the same period last year, while the growth in the North American market will only be 1%. This is the lowest order volume in five quarters, and the future order volume is an important factor to measure the development of enterprises.

It is worth mentioning that the operating revenue of China and Japan increased by $410 million and $140 million, respectively, 12% and 39%, compared with the same period last year. Nike's main markets in North America and Western Europe declined by 4% and 19% respectively, down 38 million US dollars and 93 million US dollars from the same period last year. Among them, emerging markets saw the most significant decline, with a year-on-year decrease of 87 million US dollars, or 34%. Nike's overall pre tax income fell by 11% compared with the same period last year.

In addition, Nike's inventory jumped 11% to $4.9 billion in the first quarter. The increase in inventory is one reason why Nike offline stores can offer a discount of 7.5% to competitors.

　 Strong growth of competitive products

Compared with Nike, which has a difficult market environment, the adidas market has developed well and its overall performance has grown rapidly. In the second quarter of this year, the overall operating revenue of Adidas reached 4.4 billion euros, an increase of 13%, or 21% if the exchange rate remains unchanged. Among them, the operating revenue in China increased by 30%, and the turnover in the United States soared to 788 million euros, up 22.6%.

Although sales in Latin America and Russia declined, they still achieved 7.9% and 7.2% growth in operating revenue respectively. In the first half of this year, Adidas' net profit soared 99% to 291 million euros, and its operating profit increased to 414 million euros, up 77% year on year, far exceeding analysts' expectations.

meanwhile, Sports brand Andma also far exceeded the development speed of the industry. Its revenue in the first quarter reached US $1 billion, up 27.7% year on year, and its quarterly net income was US $6.344 million, of which the revenue in the local market of North America rose 21.5% year on year to US $827.1 million, accounting for 82.7%, far exceeding market expectations.

Compared with the growth rate of competitors' performance, Nike's position as the leader in the global sports brand market has been severely impacted. The brand has declined to varying degrees in North America, Western Europe and emerging markets, with a decline of 4%, 19% and 34% respectively.

　 Lack of innovation causes brand damage

In the face of strong competitors and a weak market economy, Nike, which often sits at the top of sports brands, seems to be powerless. The decline of its own brand performance coincided with the performance of its competitors, which caused unprecedented market pressure on Nike.

For this, Paishang Clothing matching Kang Lanxin, the general manager of the college, said that as an international sports brand, Nike's development brand image positioning in the global and even Chinese market is not accurate enough, lacking vitality and three-dimensional sense. At the same time, the rapid development of domestic brands has also impacted Nike's market to a certain extent. Vertically, producing products of different levels and styles and improving the speed of product updates can meet the ever-changing needs of sports enthusiasts. Nike's competitor Adidas has not only sports performance series, but also sports tradition series origins and sports fashion series style; Nike's brand classification is still maintained in the traditional five sports series. The outdated brand positioning is no longer applicable to the current society. Breaking through the tradition and continuous innovation is the way to development.

It is understood that Nike has made a bold statement that its revenue will exceed 50 billion dollars by fiscal year 2020, which means that Nike will maintain a 63.4% revenue growth rate in the next five years. The industry believes that although Nike still holds the top position in the sporting goods market, the challenges from its competitors Adidas and ANDMA are intensifying.