Nike'S Share Price Fell 7% And Its Market Value Evaporated By $12 Billion

On June 29, the topic of "Nike's market value evaporated by more than 80 billion overnight" once hit the microblog hot search. Why is Nike not fragrant? What happened behind it?

Nike's market value evaporated more than 80 billion overnight

According to several financial media reports, as of the end of the U.S. stock market on Tuesday, June 28, local time, Nike's share price fell 7%, and its market value evaporated by 12 billion US dollars, or 80.5 billion yuan, in one day.

Meanwhile, Nike's share price fell to 102.48 U.S. dollars per share, a new low since August 2020. Nike's share price fell mainly because of its financial data.

On June 27 local time, Nike announced its fourth quarter and full year financial report of 2022 as of May 31 this year. According to the results, the annual revenue of Nike reached 46.7 billion U.S. dollars in fiscal year 2022, with a year-on-year increase of 5%, excluding the impact of exchange rate changes, a year-on-year growth of 6%.

It is reasonable to say that Nike's revenue has increased in fiscal year 2022, and its share price should have risen. Instead, it has fallen.

However, once again triggered market attention and hot discussion is that Nike has lost the Chinese market for three consecutive quarters.

Nike's revenue in Greater China fell 5.2% to $2.16 billion in the third quarter ending February 28, 2022, according to earnings data. In the last quarter, Nike's Greater China sales fell 20% to $1.844 billion. In the fourth quarter, the performance of Greater China accelerated to decline, with revenue of US $1.561 billion, down 19% year-on-year. The annual revenue of Greater China was $7.547 billion, down 9% year-on-year, and 13% excluding the impact of exchange rate changes.

Capital markets are more worried that Nike's net profit data is not very optimistic.

In the third quarter ending February 28, 2022, total sales rose 5% to $10.87 billion, while net profit fell 3.7% to $1.396 billion, according to Nike's financial data.

Nike, an American sports giant, once dominated the Chinese market. Now, why is it becoming less and less popular? Are Chinese consumers really abandoning Nike?

Nike's past glory in the Chinese market

In 1963, Nike's founder Phil Knight and mentor bill Bowman co founded the blue belt sporting goods company, which specializes in sporting goods. A year later, knight and his coach Bowerman invested $500 each to set up a sneaker company called blue belt sporting goods company, the predecessor of Nike.

Nike was founded in 1972, and a year later, Nike became famous. Steve prefandan, the record maker of the 2000-10000 meter race in the United States, became the first track and field athlete to wear Nike shoes. From then on, Nike became a blockbuster and quickly entered the international markets of Canada, Australia, Europe and South America.

Nike entered the Chinese market in 1980, and Coca Cola entered the Chinese market in the same year. On the contrary, Coca Cola has not entered the Chinese market for a decade.

In the era of lack of information and materials, people would not show off by wearing a pair of Nike sports shoes. At that time, there was no cost-effectiveness of Nike shoes. However, Nike increased its advertising and marketing efforts in the Chinese market.

In 1986, Nike launched the first advertisement in the Chinese market, and the main body was a black man running in the sky in Nike shoes. Although it seems very common now, it was an explosive advertisement with great influence at that time.

But let more Chinese people know Nike, thanks to the sports event NBA. In 1986, the NBA entered the Chinese market. Nike invited NBA stars to speak for them and publicized their legends. They moved fans and young people with emotional marketing.

In the 1990s, Nike used $2.5 million to hire Jordan as a spokesperson. Jordan's star effect was really effective. In that year, Nike's sales exceeded 70 million, surpassing its competitor Adidas.

In the eyes of the fans at that time, Nike was the synonym of sneakers, and only Nike was worn in basketball shoes.

At its peak, Nike has a huge influence in the Chinese market. Even in 2019, Nike occupied 22.9% of the total market share of Chinese sports shoes, and has been heavily dependent on the Chinese market.

Nike launched a 699 yuan women's sports shoes in March last year, and 346000 people made appointments, which shows that its influence still exists.

Why doesn't Nike smell good?

To the surprise of the market, Nike's life in the Chinese market in the past two years has become more and more difficult, and there is a trend of gradual loss of glory.

Why doesn't Nike smell good? In the NBS new product strategy, there are many reasons for the decline of Nike's sales in the Chinese market, which can be said to be besieged on all sides.

First, the strong rise of domestic sporting goods brands.

Behind the loss of Nike's market share is the rise of Anta, Li Ning and other domestic sporting goods brands. Now domestic brands have formed an obvious competitive trend against international brands such as Nike.

As mentioned above, Nike's sales in the Chinese market have been declining, but the performance of domestic brands such as Li Ning and Anta is slowly rising.

According to Anta financial report, in the first quarter of 2022, the retail amount of Anta brand products recorded a positive growth of 10% - 20% compared with the same period of last year. in_2021_ , _anta_ '_s_total_revenue_reached_49_._32_billion_yuan_ , _which_exceeded_the_revenue_of_adidas_greater_china_of_4_._597_billion_euro_ , _and_was_very_close_to_the_revenue_of_nike_greater_china_of_8_._29_billion_us_dollars_ ._

Compared with Anta, the growth of sales data of Li Ning is more obvious. As of March 31, 2022, the retail turnover of Li Ning sales points (excluding Li Ning young) in the whole platform has recorded a high growth of 20% - 30% year on year.

Second, young people fall in love with domestic sports brands and are no longer infatuated with "foreign brands".

Young people born in the 1980s and 1990s are the main consumer groups of sports brands. In the past, they also liked to buy international brands such as Nike, and even considered wearing international sports brands as the trend. It is undeniable that in the past years, domestic sports brands lacked innovation, and they also imitated Nike, Adidas and other foreign brands in style.

But in recent years, with the development of domestic sports brands