Nike, a global sports brand, seems to attach unprecedented importance to the Chinese market.
Half a month ago, Nike had just announced its decision to stop selling goods to Amazon, and it had another series of sales in China. Take action.
Nike, a global sports brand, seems to attach unprecedented importance to the Chinese market.
Half a month ago, Nike just announced its decision to stop selling products to Amazon, and it has made successive moves in China.
“This move shows us that strong brands realize that driving traffic to their own sites is self-sustaining, more profitable, and actually brand enhancing , while the traffic and incremental revenue from Amazon is less profitable, but also less brand lift,” Jefferies analyst Randy Konik said.
Let’s take a look at some of Nike’s recent big moves in China: Chinese terminals and logistics. In order to directly face consumers and fake products.
Another 100 million: Nike, building global unmanned smart logistics in Taicang, Jiangsu!
On November 26, the Taicang Municipal Government and Nike Sports (China) Co., Ltd. signed an agreement on a fully automatic warehouse with integrated warehouse racks. Nike will invest an additional US$100 million in Taicang. , to build the world’s leading high-grade fully automatic warehouse-rack integrated storage facility to meet the business development needs of enterprises.
It is reported that Nike’s fully automatic warehouse with integrated warehouse racks is an intelligent large-scale logistics warehousing facility that can realize unmanned and fully automatic operations in the warehouse, improving production efficiency by three times, enhancing the company’s warehousing and distribution capabilities will lay a solid foundation for the sustainable development of Nike’s business in China.
Since investing in Taicang and establishing its first company in China in 1996, Nike has continued to deepen its relationship with Taicang. Cooperation, expansion of investment, construction and establishment of production bases, establishment of China headquarters, and creation of a world-class logistics center have made important contributions to Taicang’s economic and social development. At the beginning of this year, the Nike China Phase III project with an investment of US$100 million was put into operation in Taicang High-tech Zone. The construction area was expanded by 30% to 260,000 square meters, which greatly improved the logistics center’s cargo handling capacity.
As the world’s leading sports shoes, apparel and equipment company, Nike has been deeply involved in the Chinese market for decades, and China has become It is one of the most important product manufacturing bases, one of the regions with the fastest sales growth and the world’s second largest market after the United States. Since investing in and establishing its first company in China in Taicang in 1996, Nike has continuously deepened its cooperation with Taicang, expanded investment, established a production base, established its China headquarters, and built a world-class logistics center to contribute to Taicang’s economic and social development. made important contributions. At the beginning of this year, the Nike China Phase III project with an investment of US$100 million was put into operation in Taicang High-tech Zone. The construction area was expanded by 30% to 260,000 square meters, which greatly improved the logistics center’s cargo handling capacity.
After increasing preparations for logistics construction, what is Nike doing?
Not just selling goods
Nike completes new media sales layout in China
On November 26, the same day as the capital increase of US$100 million, Nike announced that the Chinese version of its official application Nike APP was officially launched. Consumers can download it through the IOS and Android app stores, and log in directly using WeChat.
Nike official screenshot
Nike is trying to understand the consumption needs of Chinese consumers through more channels. Surrounded by competitors such as Adidas, Puma, Anta, and Li-Ning, Nike is becoming more and more interested in the Chinese market.
“Most of the content in the Chinese version of Nike App is localized, such as eating habits, exercise techniques, etc., which are tailored for Chinese consumers.” Nike Big Yan Yizhi, vice president of direct retail and general manager of e-commerce in China, said.
At this point, Nike’s direct sales system in the Chinese market has been basically completed. The system includes Nike App, SNKRS, Nike As well as the “Nike” WeChat applet, etc.
Now that the Chinese version of Nike APP is online, it may help Nike to combat the proliferation of Putian high imitation shoes to a certain extent. More importantly, it allows Nike to communicate directly with consumers without having to Moved to third-party platforms.
Nike: Stop selling sneakers and apparel on Amazon!
American sportswear giant Nike will stop selling its sports shoes and apparel on the US e-commerce giant Amazon website, ending an agreement reached between the two parties since 2017 Retail pilot project. This move comes at a time when Nike is comprehensively adjusting its retail strategy. The brand will vigorously develop its own sales channels directly to consumers in the future.
Nike said in a statement: “As part of Nike’s direct-to-consumer retail strategy, we have decided to end our retail pilot program with Amazon. However, we will continue to cooperate with other Retailers andTaiwan has established a strong and unique partnership to continue to provide seamless services to consumers around the world. ”
According to two people familiar with the matter, Nike made this decision after long consideration. At the same time, Nike has been expanding its team of third-party sellers so that its products can still be sold. Conduct large-scale sales through online channels.
At the same time, Nike will continue to use Amazon’s cloud computing division, Amazon Web Services, to enhance the performance of the Nike app and Nike website.
In addition, Nike also hired former EBay online shopping platform CEO John Donahoe as its next CEO. This move shows that Nike will still actively develop electronics without the help of Amazon in the future. Commercial sales.
Fake goods are repeatedly banned
Bloomberg commented that Nike ended its partnership with Amazon out of concerns about repeated counterfeit goods and product devaluation. Currently, fake goods are rampant on large e-commerce platforms such as Amazon, and unauthorized dealers arbitrarily destroy the price system. In Before 2017, all Nike products sold on Amazon came from the gray market or were counterfeit products. Nike had almost no control over how they were put on the shelves, and neither product information nor the authenticity of the products could be verified.
Nike joined Amazon’s brand registry program in 2017, hoping the move would give them more control over the products sold on the e-commerce site and more customer data to combat counterfeit goods. But Nike is very It is difficult to control Amazon’s trading market. Third-party sellers that have been cleared out only need to change their names to re-apply for business.
James Thomson, an e-commerce brand consultant and former Amazon employee, commented : “Nike leaving Amazon does not mean that its products leave Amazon, nor does it mean that its brand problems will be solved. Even if there is no official cooperation between the two parties, people can still find the Nike products they want on Amazon. ”
Nike’s withdrawal will deprive Amazon of a heavyweight partner in its brand registration program and may cause concerns among other partners. Other brands have also expressed concern about the prevalence of counterfeit goods on Amazon. Disappointed, they also worry that giving Amazon too much price control will devalue their products. In addition, Amazon’s move into private label brands has also exacerbated tensions with partner brands. Amazon now sells everything from batteries to mattresses to snacks on its own. of various products, and its own fashion brands have exceeded 100.
But GlobalData Retail analyst Neil Saunders said that few other brands have the strength of Nike. So it may be harder for them to leave Amazon, he said: “Nike has huge reach and its products are popular, so it has the ability to be selective about the distribution channels of its products because consumers will find Nike products elsewhere. it. I don’t think most brands have the choice that Nike does. ”
Adjusting retail strategy
Launching retail pilot project with Amazon Shortly afterwards, Nike announced plans to comprehensively adjust its retail strategy. Nike will turn more attention to direct-to-consumer channels, especially the Nike app and Nike. Executives also said that the company will significantly reduce the number of retailers it partners with Quantity.
In 2017, Nike conducted business with 30,000 retailers around the world. Elliott Hill, head of Nike’s consumer and market business, told investors that year that Nike would Attention was mainly focused on about 40 partners.
The Wall Street Journal reported at the time that Amazon was one of the 40 retailers Nike prioritized. But Amazon did not It can meet a clear need in Nike’s distribution strategy: Nike is making huge investments in the digital field, and they also hope that Amazon can launch a compelling online sales model for them. For example, the US high-end department store Nordstrom has a separate ” Nordstrom Demonstration, rather than consumer reach, they don’t need to spread just for the sake of spreading. ”
Nike has made huge gains in direct-to-consumer retail channels and digital areas in recent quarters. Currently, wholesale channels account for approximately 68% of Nike’s annual sales. That’s down significantly from 81% in 2013. While wholesale remains the majority of the company’s sales, its direct-to-consumer business has grown three times as fast as the wholesale channel. In the most recent quarter, digital channel sales rose 42% %, and sales generated by app users account for more than 50% of digital channels. Nike executives said at the end of last year that digital business has the potential to become Nike’s main sales channel.
Another “sports storm” is about to set off
cnbc report screenshot
November 15 According to the US CNBC report:
Internet entrepreneur Tim Armstrong told CNBC on Friday that Nike’s decision to stop selling goods to Amazon is just a choice The ‘tip of the iceberg’ for direct-to-consumer brands.
Direct-to-consumer is “the start of another big trend,” said Armstrong, whose company invests in direct-to-consumer brands that sell their products.
Armstrong’s optimism about industry growth echoes that of analysts. Analysts said this week they believed Nike’s announcement In the future, other retailers will follow suit.
Nike is moving so fast, and it seems that major domestic sports brands will also step up.
The decision to sell to Amazon is just the tip of the iceberg when it comes to choosing a direct-to-consumer brand.
Direct-to-consumer is “the start of another big trend,” said Armstrong, whose company invests in brands that sell directly to consumers.
Armstrong’s optimism about industry growth echoes analysts’ views. Analysts said this week they believed Nike’s announcement would lead other retailers to follow suit.
Nike is moving so fast, and it seems that major domestic sports brands will also step up their pace. </p
