The storm of the “Xinjiang Cotton” incident has not yet passed, and major sports brands have handed over their “report cards” during this period. Among them, Nike and Adidas have tasted what is called modern news. The online sales of these two major brands in China have suffered a sudden drop in sales. At the same time, the sales of major domestic brands have soared. Among them, the most exaggerated growth rate of China’s Li Ning Even up to 800%!
On May 6, Bloomberg quoted a Morningstar report as showing:
Tmall flagship store of the two major sportswear giants Adidas and Nike The store’s sales in April fell by 78% and 59% respectively compared with the same period last year, while Uniqlo also fell by 21%.
Following the Xinjiang cotton incident in March, the sales of Nike and Adidas in China fell sharply.
Screenshot of Bloomberg report
The sales of domestic brands Li Ning and Anta have recorded significant growth, especially Li Ning’s fashion products Product line “China Li Ning” Tmall sales soared more than 800% year-on-year in April, and the overall sales of Anta’s multiple brands also soared 59%.
As of Thursday’s close, Li Ning’s share price soared 6.49% to HK$69.7, with a market value of HK$173.7 billion, a record high.
Tmall sales of Adidas and Nike dropped significantly year-on-year in April
While Anta and Li Ning increased significantly
China is an important market for many international brands. Facing the impact of boycotts, Adidas CEO Kasper Rorsted expressed optimism that the group had experienced a sharp drop in market demand due to the boycott movement earlier, but sales have since been slow. And has steadily resumed growth, so we are still very confident that we will have a good year in the Chinese market.
Adidas’ financial report shows that the company’s sales in Greater China increased by 1.56 times in the first quarter of 2021. Based on a comprehensive assessment of geopolitical conditions and the holding of large-scale sports events, the group has revised its industry base forecast upwards. , it is estimated that sales for the whole year of 2021 are expected to increase by more than 10% annually.
Nike data points out that in the fiscal year from June 2019 to May 2020, nearly 20% of its revenue came from Greater China. Data for the third fiscal quarter of fiscal year 2021 pointed out that revenue in China reached US$2.279 billion, an annual increase of 51%, showing that the influence of China’s consumption power on brands is expanding year by year.
On the other hand, China’s domestic product trend is taking advantage of the trend. Data shows that the sales of Li Ning’s fashion brand “China Li Ning” on Tmall platform doubled in April. Increased by more than 800%, and the overall sales of Anta Sports’ brands increased by 59% year-on-year, becoming the beneficiaries of the wave of boycotts.
In this regard, Bloomberg said that due to China’s effective epidemic prevention measures, its economy has been able to recover rapidly after the impact of the new crown epidemic. Consumers have become the growth driver of global brand sales. However, due to changes in external factors in the international environment, Chinese consumers’ patriotic sentiment has increased, which has benefited China’s local brands even more.
China is a huge market for internationally renowned brands. In the fiscal year ending on May 31, 2020, Nike’s brand revenue is expected to be more than 50 billion yuan, of which nearly one-fifth One’s revenue comes from Greater China.
In addition to the impact of macro factors such as the market recovery after the epidemic, boosting consumer confidence, and the Xinjiang cotton incident catalyzing the upsurge of domestic products, Li Ning and Anta respectively announced Xiao Zhan and Wang Yibo as spokespersons. The traffic diversion effect is also the main reason for the surge in sales of the two major brands.
In less than two months from early March to early May, as of Thursday’s close, Li Ning’s stock price has risen from less than 40 Hong Kong dollars at the low point to 69.7 today. The Hong Kong dollar rose more than 70%. Its market value reached a record high of HK$173.7 billion, and the distance from Anta has been narrowed, but the gap is still more than HK$200 billion.
According to Nike’s internal financial report, in the third quarter of last year, Nike Group’s total revenue was US$10.36 billion, of which China contributed the most. In the third quarter of last year, Nike’s sales in China were Revenue reached US$2.28 billion, approximately RMB 15 billion.
At the same time, the stock prices of Nike and Adidas have plummeted since the second day of the Xinjiang cotton incident. Nike fell by 3.39% that day, and Adidas fell by 6.49%. After rising in early April, it fell sharply again in the middle of April and has not yet recovered.
In fact, we can also get a glimpse of these through the sneakers recently released by Nike. For example, the much-anticipated new color matching of Travis Scott sneakers.
More than 40 days have passed since the “Xinjiang cotton” incident on March 25. Although the matter is no longer as popular as it was at the beginning, it is far from the same. Reach calmness. There are calls for “boycott Nike” among the people. Although there are always a small number of people who are driven by interests to “slap them in the face”, but…��Most people still adhere to the attitude of “I can’t control others, I won’t buy it anyway”. If you are also a member of the silent resistance, oh Xiaoer must give it a thumbs up!
Once a good market prospect, now the good cards are being played badly, and Nike, which is a “bad foot”, may not have a long-term future in China. Although we ordinary people have limited power, today’s slap in the face of the market is also due to you! </p
