Nike is losing young people in China.
In December 2021, Nike announced its “Financial Report for the Second Quarter of Fiscal Year 2022” as of November 30. Revenue was only US$1.844 billion, a year-on-year decrease of more than 20%, and pre-tax profit was only US$569 million, a year-on-year decrease of 36%. %, which is also Nike’s worst quarterly performance in the Greater China market in the past five years.
Relevant sources said: The mentality of Chinese consumers has changed. China’s young people are regaining their lost consumer rationality towards imports and rebuilding their lost consumer confidence in domestic products.
Capacity transfer has been criticized
Over the past twelve years, Nike has gradually transferred China’s production capacity to Southeast Asian production capacity belts such as Vietnam, India, and Thailand, just to enjoy lower labor costs and preferential tax policies from local governments, but it has ignored “capacity transfer” There are natural logical cracks behind it.
Nike’s production capacity was transferred to Southeast Asia, but the quality control of the brand was not up to standard, which also laid hidden dangers for the changes in Nike’s “quality reputation” in the following ten years.
Many netizens complained: After Nike moved to overseas factories, the quality plummeted. The Nike shoes I bought became worn out after not being worn for a long time, and the velvet suit I bought had serious lint loss.
Recently, Nike’s largest OEM in China, Shenzhou International, issued an announcement announcing the implementation of closures on some production areas in Beilun District, Ningbo City, which means that related production capacity will be suspended for a short period of time. Due to the epidemic, the production capacity dilemma of factories in Vietnam has not been resolved, and the resumption rate is only 70%.
In the current mainstream shoe and apparel market, Made in China has always maintained a high reputation and quality, making it easier to win the favor of consumers and promoting the consumption willingness of international brands such as Nike and Adidas. At that time, Nike did not realize that production capacity The transfer has accelerated the loss of China’s consumer market.
Consumers are quietly changing
Some time ago, someone conducted an interview with Chinese young people and asked why they don’t like Adidas Nike? The young man’s answer goes straight to the point, because compared to European and American imports, domestic products have become more fresh.
As early as before and after the epidemic, a group of post-00 consumers had started the “niche shoe and clothing brand trend”, and some post-00 consumers were very curious about the “handmade skills” of old cloth shoes.
For Nike, it has not launched enough “localized” products for China’s new generation of young people. Compared with Nike, Lululemon’s overseas brands will even launch co-branded IP or customized versions for Chinese consumers, while Nike still adopts traditional design models.
After the epidemic, Nike has been slow to respond positively in some public places. The Xinjiang cotton incident and other incidents have pushed Nike to the forefront of public opinion.
The consumption outlook of young Chinese people is becoming more and more rational. In the past, many people believed that European and American luxury goods were not only a commodity, but also a face, just like an iPhone was even used as a means of showing off. Now, this situation has completely changed, and it is even more proud to use domestic products. Data shows that since this year, a large number of domestic products such as Huawei, Xiaomi, Anta, Li Ning, Hongxing Erke, etc. have experienced an explosion on major platforms such as Alibaba, JD.com, and Vipshop.
On domestic issues, production capacity has declined, and quality and quality control have declined. On external issues, we cannot innovate for consumers, do not regard customers as God, are slow to respond to public opinion, and even stand directly on the opposite side, which further awakens the Chinese people. Rising nationalist enthusiasm has accelerated the development of local Chinese enterprises.
Obviously, after these two special years, Chinese young people have changed, and the mentality of Chinese consumers has changed. Because we have seen clearly that compared to the luxury goods guided by Europe and the United States, the money in our hands and the peace of mind are the real luxuries. Because we all understand that true self-confidence is not yearning for the bright beacon of the West in the past, but witnessing the confidence and pride of the East that is shining brightly!
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