“Nike is a brand that ‘belongs’ to China and serves China.”
According to Observer.com, on June 24, local time, Nike CEO Executive John Donahoe responded to questions about competition from Chinese brands with this statement during a call with Wall Street analysts regarding Nike’s latest earnings report.
The topic instantly shot to the top of the hot search list.
At the close of trading on the 25th, Nike’s stock price rose 15.53% to US$154.35, leading the Dow Jones Industrial Average and setting a record high at the same time. The latest market value is US$243.5 billion, an increase of approximately US$32 billion (approximately RMB 208 billion) from the previous trading day.
Public information shows that Nike was founded in 1972 and is headquartered in Portland, Oregon, USA.
So why did Nike suddenly take the initiative to “show favor” to China?
Nike CEO: The Nike brand “belongs” to China, and netizens are not calm anymore
According to Jimu News citing foreign media reports on the 25th, recently, Nike CEO John Donahoe said: “Nike is a brand that belongs to China and serves China.”
After the news came out, netizens didn’t seem to buy it.
It is worth mentioning that during the just past International Children’s Day, the General Administration of Customs inspected some of the goods detected during the period from June 2020 to May 2021. The quality and safety substandard conditions of imported children’s products are reported, and the brand involved is Nike.
The notice pointed out that Nike boys’ knitted cotton T-shirts have substandard safety risks. The dyes or harmful substances may be absorbed by the human body through the skin, mouth, etc. and endanger health.
On June 11, Nike was notified for violating the principle of necessity and illegally collecting personal information unrelated to the services it provides.
Even with the negative news, Donahoe still believes that China will continue to be Nike’s fastest growing market.
He also attributed Nike’s success in China in part to its decades of investment, saying “We have been operating in China for more than 40 years and today we are the largest in China. As a sports brand, we always look to the future.”
Some netizens also expressed their views on this statement.
The latest data released: Nike made 55.3 billion yuan in China in one year
Donahoe’s confidence may stem from Nike’s success in Beautiful data.
After the market closed on June 24, Nike released its performance report for fiscal year 2021 (ending May 31, 2021), showing that revenue increased by 19% to US$44.5 billion.
By brand, Nike brand sales increased by 17% to US$42.3 billion; IKE Direct revenue increased by 32% to US$16.4 billion; Converse revenue increased by 16% to US$2.2 billion.
By region, revenue in North America increased by 19% to US$17.179 billion; sales in Europe, the Middle East and Africa increased by 23% to US$11.456 billion; revenue in Greater China increased by 24% to 82.90 billion US dollars (approximately 55.3 billion yuan); sales in Asia Pacific and Latin America increased 6% to 5.343 billion US dollars.
Image source: Nike financial report screenshot
It is understood that Nike’s fourth quarter sales surged 96% % to US$12.3 billion.
By region, revenue in North America increased by 141% to US$5.384 billion, sales in Europe, the Middle East and Africa increased by 124% to US$2.979 billion; revenue in Greater China increased by 17% to US$19.33 US$1.458 billion; sales in Asia Pacific and Latin America increased 82% to US$1.458 billion.
In other words, China is still Nike’s most important source of income after the United States.
Behind the show of goodwill may be hidden worries about the future
So , is Nike really worry-free in the Chinese market?
Take Tmall as an example. In the just past 618 global promotion, in the sportswear sales rankings, Nike (6.1-6.18) ranked first with 703 million. is ranked first, followed by Adidas with 582 million yuan, and the Chinese brand Anta ranks third with 406 million yuan. However, if all Anta’s brands are added together (Anta, Fila, Descente), the sales are as high as 940 million yuan, surpassing Nike by 30 %.
However, this is not the case.
You must know that since March, domestic brands such as Li Ning and Anta are ushering in another opportunity for faster development.
Still taking the Tmall 618 global promotion data mentioned earlier as an example.
In terms of total sales, Nike and Adidas still rank first.
But if we look at the growth data, domestic brands have been favored by the majority of consumers. From 6.1 to 6.18, Li Ning increased by 37.3%, Anta increased by an average of 94.9%, and Xtep increased by 94.9%. fell by 31.6%, while Nike and Adidas fell by 26.8% and 33.4% respectively.
(Drawing: Jintou.com; Data source: Taodata)
Li Ning, in particular, is known as the “Light of Domestic Products” .
After the Xinjiang cotton incident was exposed in March, Li Ning’s main products in many series were hard to find.
It is reported that a Li Ning shoe with a retail price of 1,499 yuan was sold on some APPs for 48,889 yuan, an increase of up to 31 times.
In April On the 15th, Li Ning responded: It does not want to have anything to do with the shoe speculation circle, and will set up a “threshold” to avoid it.
Li Ning said that in order to prevent people from using plug-in software to rush to buy limited edition shoes, Online IP address verification is adopted. If an IP address appears multiple times and is suspected of being a shoe speculator, the store will refuse delivery. Offline, the company will also adopt ID verification.
According to statistics from Zheshang Securities, after the “Xinjiang Cotton” incident broke out, sales at Li Ning’s official flagship store from 3.24 to 4.4 increased by more than 200% year-on-year. Anta Sports also grew by more than 100%. At the same time, Li Ning, Anta The prices of “limited edition” sneakers from other brands have skyrocketed.
Offline business is also impressive. According to netizens in many places, on April 3, the first day of the Qingming Festival holiday, Li Ning , Anta and other domestic brand offline stores have a large flow of people, and you even have to queue up to enter.
It can be seen that domestic brands are rising rapidly, and their speed has far exceeded imagination.
It is undeniable that Nike and Adidas are deeply rooted in China and have been operating for a long time. It is difficult to shake their short-term status.
But I believe that in the near future , China will also have the world’s leading sportswear representatives.
This may be what Nike is most worried about.
Because of the past For decades, in the world, especially in the Chinese market, only Adidas could compete with Nike in the field of mid-to-high-end sportswear.
Maybe it will be different in the future.
Li Ning’s net profit surged 163% in the first half of the year
6 On March 25, Li Ning issued an announcement that based on a review of the group’s latest unaudited management accounts and the information about the group currently available to the board of directors, it is expected that the group will record a net profit of less than 1% for the six months ending June 30, 2021. Less than RMB 1.8 billion, while in the same period in 2020, it recorded a net profit of RMB 683 million, a year-on-year increase of 163.5%.
The announcement stated that the group’s performance improvement was mainly due to revenue growth of more than 60% and continued improvement in operating profit margins. The Group’s results for the six months ended June 30, 2021 are yet to be finalized.
In March this year, Li Ning announced the group’s full-year results as of December 31, 2020. The financial report shows that the full-year revenue in 2020 reached 14.457 billion yuan, an increase of 4.2% compared with the same period in 2019. Gross profit increased by 4.2% to RMB 7.094 billion from RMB 6.805 billion in 2019. The group’s overall gross profit margin was 49.1%, the same as the previous year (2019: 49.1%). Profit attributable to the company’s equity holders was 1.698 billion yuan, a year-on-year increase of 13.3%.
Li Ning’s net profit in the first half of last year was 683 million yuan, and last year’s full-year net profit was 1.698 billion yuan. In other words, the net profit in the first half of this year was more than three times that of the same period last year, and has exceeded the net profit of last year.
According to the “2020 Hurun Report”, founder Li Ning’s net worth has reached 13 billion yuan.
Promoted by the increase in sales, Li Ning’s stock price has also been rising. In the past two and a half years, the stock price has increased by 900%. Just the day before yesterday (June 23), the stock price once hit a record high of HK$86.15 per share.
Anta Sports’ performance doubled in the first half of the year
Anta also performed well in the first half of the year.
After the market closed on June 17, Anta Sports released a preliminary announcement of results for the first half of 2021. It is expected that the company’s operating profit in the first half of the year will increase by no less than 55% year-on-year. The profit (excluding the impact of the Amer joint venture) will increase by no less than 65% year-on-year, and the net profit attributable to the parent company (excluding the impact of the Amer joint venture) will increase by no less than 110% year-on-year.
According to research data from multiple brokerages, affected by the Xinjiang cotton incident in late March, Anta Sports’ revenue grew strongly in the second quarter, and its e-commerce side maintained rapid growth. During this period, Anta Sports’ discount rate was close to 20% off, which was close to the best level in the company’s history. Under this influence, Anta Sports raised the expected growth rate of the brand’s annual sales from 15%-20% to more than 20%.
From the perspective of the secondary market, in the past two years, driven by the trend of domestic products, Anta Sports’ stock price has been rising.
As of the close of trading on June 25, Anta Sports closed at HK$179.9 per share, with the current total market value reaching HK$4,863.
In mid-November last year, the total market value of Anta Sports exceeded HK$300 billion for the first time, reaching HK$301.2 billion.
Based on this calculation, in seven months, the total market value of Anta Sports has increased by HK$185.1 billion.
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