Nike puts a better foot forward in China

Xtep International Holdings

22/06/2022 05:34

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are their own.)
    HONG KONG, June 22 (Reuters Breakingviews) - Nike’s  NKE.N 
China bulls can let out a sigh of relief. The sneaker-maker has
had a tough run, with revenue in Greater China for the nine
months to the end of February falling 11% https://s1.q4cdn.com/806093406/files/doc_financials/2022/q3/FY22-Q3-Combined-NIKE-Press-Release-Schedules-FINAL.pdf.
 But online sales during this year’s “618” festival - the annual
shopping extravaganza during the first 18 days of June - brought
in 570 million yuan ($85 million), a whopping 171% increase
compared to last year. That even beats local competitors such as
Li Ning  2331.HK  and Xtep  1368.HK .
    The $171 billion sportswear giant run by John Donahoe has
been beset by a number of hurdles, not least Covid-19 lockdowns,
political and consumer backlash due to the Xinjiang cotton
controversy  urn:newsml:reuters.com:*:nL3N2O440I and local competitors https://www.bloomberg.com/graphics/2022-china-nationalistic-online-shoppers
 vying for market share. Now it’s prioritising local consumers
by offering China-specific platforms  urn:newsml:reuters.com:*:nL4N2XV0GX and partnering
with Hong Kong-listed Topsports  6110.HK  and Pou Sheng
 3813.HK , two of the biggest domestic sports retailers in
Mainland China.
    Nike estimates the country’s market for its gear could grow
to 500 million people https://acrobat.adobe.com/link/track?uri=urn:aaid:scds:US:23603012-6ba4-444a-a95a-f737775b09e5#pageNum=1,
 10 times that of North America. That’s a big if, but the Swoosh
deserves to celebrate its smaller victories. (By Thomas Shum)

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 (Editing by Antony Currie and Pranav Kiran)
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