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The sports brand sales market in the doldrums and this year overall decline in the consumption are the direct cause of the Nike sales slowing down. The expansion of sports brand after 2008 is rapid and the homogeneous competition is brutal. In the Sports brand industry the consolidation is not yet complete, it will be more painful than other sub-sectors. Before the time there is error estimates of the Chinese market. Nike hoped that the Chinese market growth is expected to maintain a high annual growth before. According to the plan, stocks certainly existed problems. Nike released the fourth quarter of the report that also showed the trend. Insiders believe that this high inventory has spread to the first-line brand.
In the market overall bad case, Nike is suffering from the inside and outside the attack. Its 2012 second quarter results of Adidas are very gratifying as a direct rival of Nike. The general report released by Adidas displayed that the turnover in greater China is 732 million Euros and has a 19% growth year-on-year. Adidas forecasting full year net profit growth is adjusted from the previous 12~ 17 percent to 15~ 17 percent. The difference between Nike and Adidas’ management and marketing strategy is still getting bigger. Analysts Chen Chang Song points out that business brands contrast to native brand, Nike goods price position is above level, and the large and center city is the primary marketplace.
Some people analyzed that the slacken sales led the Nike stock to be big, and one of the courses is possibly the market forecast wrongly convicted by the enterprise. Ma Gang pointed out to the Daily Economic News reporter and said before the time they estimates in the Chinese market have some errors.
In May 2010, Nike announced that in 2015 they will achieve a turnover target of $ 27 billion and accumulated operating cash flows will be more than 12 billion U.S. dollars. Nike says it will invest actively in the greater China region, central and eastern Europe and emerging market and some other developing regional markets. In 2015 at the end of the financial year, there is a growth of $3 billion to $3.5 billion annual income. And the plan according to the current situation is obviously overly optimistic. For Nike and other international sports brand in China in the future market conditions, the analysts above are agreed to value.
Zhang Bin said: ” foreign brand features are good and future consumption in China will be more rational. Future focus is to success bythe product characteristics, and Nike goods are very good, there are also strengths in China in the future which will continue to expand. Ma Gang considered in 2009, an alike status appeared, that is Nike and other international brand came across big stock, and then they adjusted quickly. And in this round of sales slowed, the impact will not be so big. Cumulative inventory will be relatively small, and they have preventive measures.
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