In recent years, driven by the wave of national sports, the sports consumption market has continued to heat up. The smooth holding of a series of sports events such as the Asian Games and the Universiade, as well as the development of mass sports such as urban marathons and folk basketball, have further enhanced the enthusiasm of the public for sports consumption. The potential and future growth demonstrated by China's sports industry and consumer market have led many sports brands to continuously increase their investment in China.
Since its first entry into the Chinese market in 1981, Nike has become a leader in the Chinese market through continuous investment and innovation. Nowadays, the Chinese market is not only the world's second largest national market for Nike, but also an important manufacturing, export, and innovation center.
According to the financial report, Nike Group achieved a revenue of $12.9 billion in the first quarter of the 2024 fiscal year, an increase of 2% compared to the same period last year on the basis of unchanged exchange rates. Among them, Nike Greater China achieved a revenue of 1.735 billion US dollars, a year-on-year increase of 12%, and achieved double-digit growth for two consecutive quarters.
In order to better approach and serve Chinese consumers, Nike announced at this CIIE that it will build a Nike China Sports Research Laboratory at its Greater China headquarters in Shanghai in 2024. Through this investment, Nike will further enhance its insight into local Chinese consumers, understand their needs, and transform them into products and services to better meet the various needs of Chinese consumers.
Technology serves consumers and accelerates innovation layout
From the moment the first Swoosh logo appeared on the runway in 1972, Nike has been committed to using innovative technology to manufacture products that meet or even surpass the needs of every athlete, and innovation has become rooted in Nike's DNA. The Nike Sports Research Laboratory, which has a history of over 40 years, has witnessed the birth and development of Nike's countless innovative technologies.
In 1980, Nike established the initial Nike Sports Research Laboratory in a small warehouse in Exeter, New Hampshire, and practiced various ideas for products, materials, and technology within it. At the same time, the team not only includes fitness coaches and podiatrists, but also aerospace engineers and biomechanics experts, conducting sports science research from various perspectives. This not only makes Nike the first company in the industry to invest in empirical research, but also brings a continuous stream of inspiration to Nike's product innovation.
Today, Nike Sports Research Laboratory has nearly 8000 square meters of research space within the LeBron James Innovation Center at Nike's global headquarters, including a 200 meter long track, an NBA standard full size basketball court, approximately one-third of a standard football field, three artificial environment rooms, and a rehabilitation room, allowing Nike researchers and designers to conduct unrestricted testing, experimentation, and prototype production.
Matthew Nurse, Vice President of Nike Sports Research Laboratory, said, "At Nike Sports Research Laboratory, our focus is on problem-solving, and all of our work revolves around problem-solving. At the same time, scientists and designers all work together, with both imaginative and practical product designs. The two collide and influence each other
Here, a series of Nike innovative technologies that consumers are familiar with have emerged, such as Shox, Flyknit, etc. It is reported that Nike has invested a large amount of resources in technological research and innovation, with some research taking up to 10 to 15 years. After the initial research and development, Nike is still refining its technology on the basis of innovation, and then applying it to different products to market. The investment and first mover advantage in scientific research have enabled Nike to consistently bring consumers a continuous stream of new ideas and products over the past 50 years.
This is also one of Nike's differentiated competitive advantages in the Chinese market today. The current young generation in China is the most active consumer group. They have been exposed to rapidly changing new technologies since childhood, love sports, and embrace a healthy lifestyle. Therefore, innovation is crucial for them.
Nike Global Vice President and Nike General Manager for Greater China, Dong Wei, said, "The investment in Nike China Sports Research Laboratory is in line with this transformation. By combining sports science with Nike's existing capabilities, such as product design with regional characteristics and local digital consumer experiences, we will be more closely connected with consumers
This Nike Sports Research Laboratory located in Shanghai will help Nike better understand Chinese athletes and consumers, and accelerate the introduction of innovative products that meet the needs of the local market.
For example, more people participate in outdoor basketball in China than in the United States, and the demand for basketball shoes on outdoor basketball courts is not the same as that on indoor basketball courts. Nike's previous Hyperfuse technology was inspired by listening to the voices of Chinese basketball enthusiasts. After understanding the demand for breathability and durability of shoe uppers in outdoor sports, this Chinese insight was transformed into an important technological innovation for Nike, And applied globally.
I believe that with the completion of the Sports Research Laboratory in China, Nike will also widely collaborate with Chinese athletes and consumers of different levels and types, especially to meet the unique needs of the Chinese market in basketball, running, fitness and other fields, and use sports technology to serve different types of groups.
Continuously delving into the Chinese market and strengthening local connectivity
Nike has representative projects landing at the annual CIIE, and its investment focus is also on how to better serve the Chinese market and strengthen connections with local consumers.
In 2021, Nike announced an investment of 1.3 billion yuan in Shenzhen to build the Nike China Technology Center. With the official opening of Nike China Technology Center, Nike's digital transformation pace has further accelerated. Nike's innovation in artificial intelligence, data warehousing, digital platforms, electronic payments, and machine learning continues to strengthen, providing Chinese consumers with continuously optimized digital sports experiences.
With the support of Nike China Technology Center, Nike completed the transformation of a series of its own digital platforms such as Nike APP and SNKRS China in July 2022, relying on local digital ecology and with members as the core. The new digital platform helps Nike continuously deepen its connection with consumers, and through the development of functions and user experiences based on localized insights, Nike firmly grasps online traffic opportunities.
At the same time, the digital wave in the Chinese market and the rapid development of e-commerce live shopping have also made Nike see the demand for smart logistics in the Chinese market. In 2022, Nike announced an investment of $100 million (approximately RMB 660 million) on the CIIE platform to establish a "Nike fully automated unmanned warehouse" in China's logistics center.
In March of this year, the fully automated unmanned warehouse was officially launched, achieving highly intelligent automation and light out operation, greatly improving the efficiency and resilience of the supply chain, and better meeting consumers' higher requirements for e-commerce order processing speed. With digital fully automated access support, the unmanned warehouse can process up to 20000 consumer orders per hour. At the same time, the fully automated unmanned warehouse has also improved Nike's ability to cope with unexpected situations and e-commerce peak periods. For example, at recent Double Eleven nodes, it can maintain a stable service level and meet the needs of consumers for e-commerce shopping.
In addition to continuously deepening its efforts to serve consumers, Nike also leads the industry in promoting sustainable and green transformation. At this year's CIIE, Nike also announced a deep cooperation with Tsinghua University in the field of sustainable development.
The two sides will work together to carry out the "Special Plan for Deep Integration of Carbon Neutrality Industry, Education and Research", explore cutting-edge topics such as low-carbon path planning for 2050 carbon neutrality enterprises, green and low-carbon production and manufacturing, zero carbon logistics transportation and warehousing comprehensive solutions, and promote research on local carbon measurement in China and the formulation of relevant zero carbon scenario industry standards. At the same time, both sides will also engage in cooperation in sustainable development talents and other areas, and work together to cultivate cutting-edge talents and young leaders who will lead sustainable development and green economy in the future.
In addition, the first set of automated separation process for waste sports shoes, jointly developed by Nike and the Institute of Ecological Civilization and Circular Economy at Tongji University, will also make its debut in Jinbo. It will be able to cooperate with the "Old Shoe Revitalization" environmental protection plan by recycling old shoes and converting them into green and recycled Nike Grind environmentally friendly materials for building environmentally friendly sports fields. The environmental protection plan has now completed 30 stadiums across the country, and Nike plans to build 100 Nike Grind environmentally friendly sports fields in China by 2030.