Tmall's "Double 11" Nike Hits Half Off Tmall To Become Nike's New Favorite?

With the annual "double 11" approaching, Taobao, Tmall, Jingdong and other websites offer a discount tool again. Among them, Tmall website launched a rare sight. Nike 50 percent off news.

Many consumers are doubtful of its authenticity. More media questioned that, Nike has been reduced to Tmall through the "double 11" hit 50 percent off sales to increase sales?

According to the world clothing and shoe net, Nike announced that it would substantially restructure its retail channels in October 25th and will focus on 40% of the key retail partners in October 25th. This means that after Nike's layoffs, some retailers will also be abandoned by Nike.

For Nike's own "radical surgery", the industry analysis, the main reason is Nike is coming from Adidas Challenges to its industry leader position.

　　 Earnings growth slowed

In October 2015, Nike CEO Mark Parker (Mark Parker) estimated Nike's future revenue at the investor conference, saying: "by 2020, the annual revenue of Nike will grow to $50 billion on the basis of $30 billion 600 million in the year."

But in October 25th, Mark Parker held the company's 2017 investment Day campaign, which said Nike expects to achieve $50 billion in the next five years.

Nike's goal of "earning 50 billion dollars in the next 5 years" put forward in 2015 has been postponed again and again from 2017 to "50 billion dollars in the next 5 years". Analysts said Nike's delay in implementing the $50 billion revenue plan was mainly due to a slowdown in the company's performance.

Insiders predict that Nike's total revenue in 2020 is about $40 billion 900 million.

According to Nike's three quarter 2017 earnings report, from December 1, 2016 to February 28, 2017, Nike realized operating income of $8 billion 432 million, an increase of 5% over the same period last year, and net profit of $1 billion 141 million, up 20% over the same period last year. Despite overall revenue growth, Nike's revenue growth rate (fixed exchange rate) is only 15% in the Chinese market. In fact, its revenue growth in China has slowed down for six consecutive quarters.

Especially in March of this year, Nike broke out 3.15 "air cushion doors" storm, leading to some Chinese consumers. brand In the credit crisis, Nike's sales growth in Greater China continued to decline.

Adidas's 2016 earnings report shows Nike is being chased. In 2016, Adidas's operating income reached 19 billion 291 million euros, up 14% over the same period last year, with net profit of 1 billion 19 million euros, an increase of 41.5% over the same period last year. In China, Adidas's operating income in 2016 was 2 billion 944 million euros, an increase of 28% over the same period, and its growth rate far exceeded Nike's.

It can be said that under Adidas's catching up, the Nike sports brand's "boss" position is beginning to be unstable. This kind of catching up is not only in the growth of sales revenue of both companies in China.

In October this year, investment bank Piper Jaffray released a survey showing that American teenagers are now moving from Nike's camp to Adidas and Vans camps. Among the high-income families, although Nike still has a large number of supporters, 46% of respondents chose Nike as their favorite sports brand. But a year ago this figure was 51%. Adidas's popularity has doubled.

According to the analysis of people in the industry, when the "sports leisure wind" is positive, the competitors represented by Adidas seize the opportunity, and capture a large number of consumers who have just passed away with leisure and retro products. However, fast fashion and luxurious remote entry have blurred the boundaries between sports and time, so that Nike, who has always been featured by sports professionalism, has lost many advantages and has many rivals.

　　 Tmall becomes the new favorite of Nike?

Mark Parker said in a media interview that the company has set a target of sales of 50 billion US dollars in 2020. He expects digital revenue to grow from 15% to 30% in the next five years. It is estimated that 50% of the company's future sales growth will come from new products, and about 75% from the non US market.

It can be said that when Nike adjusted its sales channels, it began to shift its attention to digital channels, and increased the total revenue from digital channel sales from 15% to 30%, including direct revenue from retailers and retailers.

According to the world clothing and shoe net, Nike has tasted sweetness in its cooperation with Tmall. In July 2017, Nike's share price rose 7.6% in the US stock market, because the growth rate of new markets in the Greater China region reached 11%. In this regard, Nike explained to the media that its Greater China region has maintained double-digit growth for tenth consecutive quarters. Tmall is the key to promoting overall business growth. It will continue to strengthen strategic cooperation with Alibaba and join forces with Tmall to push new retail sales.

In addition to cooperating with Tmall, Nike has also established a partnership with e-commerce giant Amazon, which will sell products directly on Amazon platform. In the past, Nike sold its products through Amazon's professional shoe sales website Zappos.

It is worth noting that Nike's success in Tmall's "double 11" is undoubtedly attracted by the discount. In addition, in October this year, Nike announced a wave of 48 hours, discount rate of up to 40% of the official website price reduction activities, discount products include high-end Jordan Brand products.

In this regard, Neil Schwarz, vice president of business development of SportsOneSource, Neil Schwartz, said in a media interview that he expressed concern about the current situation of Nike products' massive price reduction. It said: "Nike used to have a vision of predicting the future, but now they are more responsive to market changes than leading market development."

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