Global sportswear giant Nike is also feeling pressure to maintain growth and stabilize its stock price.
At the end of June 2024, Nike released its annual report for the fiscal year 2024, covering the period from June 1, 2023 to May 31, 2024. In this fiscal year, Nike Group's revenue was 51.362 billion US dollars (approximately 313.776 billion yuan), a slight increase of 1% year-on-year, and its profit increased by 13% to 5.7 billion US dollars. Among them, Nike's revenue in Greater China was 7.545 billion US dollars (approximately 54.819 billion yuan), a year-on-year increase of 8% on a constant exchange rate basis, recording growth for the seventh consecutive quarter.
In the Greater China region, in terms of single brand, Nike remains the highest revenue sports brand. In the most recent fiscal year, ANTA's annual revenue was 30.306 billion yuan, ANTA Group's FILA brand had a revenue of 25.103 billion yuan, and Li Ning Group's "single brand" strategy had an annual revenue of 27.598 billion yuan.
Nike's old rival Adidas had a revenue of only 3.19 billion euros (approximately 25.242 billion yuan) in the Greater China region in the last full fiscal year, which is less than half the size of Nike. And these are currently the top five sports brands with the highest revenue in the Chinese market, and also the only five sports brands with an annual revenue exceeding 20 billion yuan.
In the Chinese market, the competition in the sports consumption industry far exceeds that in the global market. After all, in Nike's home market of North America, its main competitor may only be Lululemon. In the European market that Nike wants to conquer, the main competition comes from Adidas. But in the Chinese market, international sports brands value this area as the strongest driver of growth, while domestic sports brands firmly occupy the advantage of sinking markets and channels.
In fact, maintaining a growth rate of 7-10% in the Chinese market in the past full fiscal year has been a common phenomenon among major sports brands. Li Ning and Xtep, with a volume of nearly 30 billion and nearly 15 billion respectively, have experienced a decline in growth rate within this range.
Despite being in a leading position in both the global and Chinese markets, Nike's stock price has fluctuated in the past half month after the release of this annual report, which showed a slight year-on-year increase of 1% in the global market. After closing high at $94.75 on June 25th, Nike's stock price fell nearly 20% on the day of the report's release, closing at $71.31 on July 15th.
From the recent half month adjustment, it seems that Nike's hope of maintaining growth and stabilizing its stock price has been pinned on innovative products.
In mid July 2024, Nike Group announced a management restructuring, with Thomas Clarke, the President of the Innovation Department, being transferred to the position of Senior Advisor to the CEO. This veteran who joined Nike in 1980 will assist current CEO John Donahoe, and his position will be taken over by Chief Innovation Officer John Hoke.
These three people also form the core trio of Nike Group's senior management, which will mainly focus on research and innovation.
In fact, Nike has always been at the forefront of global product development in the past. Taking the midsole technology of running shoes as an example, Nike's Air, Zoom, and later React have been constantly iterated. The latest generation of Pegasus41 running shoes released this year uses Zoom X and Air midsole technology.
However, in the past fiscal years 2023 and 2024, Nike also acknowledged that product innovation has been slightly delayed due to the impact of working from home during the pandemic.
When the Jordan Beijing Flying Flagship Store opened at the end of March this year in Taikoo Li North District, Sanlitun, Nike Global Vice President and General Manager of Nike Greater China, Dong Wei, told Interface News, "Because many innovations and designs still require the use of our headquarters' design studios, laboratories, and experimental sites, the products we are bringing now and in the future are actually made by the Innovation Laboratory after the epidemic
Usually, the cycle of product design finalization, production, and logistics means that a product takes approximately 18 months from finalization to launch. This doesn't even include the approximately six months it took for the supplier to purchase. And the time for innovative design needs to be even more advanced.
At the beginning of July, YONEX, the leading badminton brand, held a product ordering meeting in Xiamen in the spring and summer of 2025. In other words, many of the popular sports products on the market now must be designed and finalized before the summer of 2022.
For sports giants like Nike, the true determinant of revenue must be the product. Among the Chinese sports giants, ANTA has also realized this business logic early on, and "product power" has always been ANTA's fundamental ability.
The Paris Olympics, which will open on July 26th local time, is the battlefield for the highest precision products of all these sports brands. Once these sports technologies are successfully tested on the Olympic stage and introduced to the market, they will naturally not fall behind.
Therefore, for Nike today, with a global volume of over 300 billion and maintaining growth, the most important thing must still be innovative products. Meanwhile, forward-looking innovative products are also a shot in the arm for the expected capital market.