As a leader in the activewear category, Nike (NYSE: No) quarterly results not only bring an unofficial end to earnings season, but are viewed as a barometer of consumer spending trends and companies’ success in breaking into foreign markets. wall street Next week will dissect fourth-quarter results, focusing not only on the welfare of U.S. consumers but also on the company’s performance in its most strategic markets.
A survey conducted by Citigroup analyst Paul Lejuez showed that among North American and European consumers, Nike (NKE) remains the global leader in sports equipment. But another brand followed, threatening the company’s visibility in China, one of its largest markets.
Lejuez asked 1,600 North American consumers, 1,000 Chinese consumers, and 900 European consumers a variety of questions to understand which brands they recommend to family and friends, which brands they would consider buying next, and which brands are the most innovative .
The results for North American and European consumers were relatively consistent, with Nike (NKE) ranking high in both Net Promoter Score (NPS) and purchase intent. Nike is also considered the most innovative brand. But Germany’s Adidas (ADDYY, ADDDF) is making progress and closing the gap among certain categories of consumers.
Taking a closer look at the results within each group, Nike (NKE) maintains its lead in both consumer rankings and NPS (which measures the difference between respondents who would recommend a particular brand to friends and family). interviewees. Positive NPS means more respondents would recommend a brand, while negative NPS means fewer recommendations.
Nike still maintains the highest NPS among all brands surveyed, at 50, although down from 53 in March and tied with Adidas (ADDYY, ADDDF). Under Armor (UAA, UA) ranked third with an NPS score of 43 (down from 45), Hoka (DECK) rose to 30 from 22, and On Holding (ONON) fell from 28 in June to 18 minutes.
When North American respondents were asked which brand they would buy next, 29% chose Nike (NKE) (down from 31%), followed by Adidas (ADDYY, ADDDF) (down from 21%) at 19% %, New Balance is 10% (up from 7%). Hoka (DECK) gained only 2% and On (ONON) gained only 1%.
Next, the survey asked participants which brand they considered the most innovative. Not surprisingly, Nike (NKE) once again takes the top spot, followed by Adidas (ADDYY, ADDDF), New Balance and Under Armor (UAA, UA).
Results were similar among European respondents, with Nike (NKE) being the brand most recommended by family and friends, most likely to be purchased next, and most innovative.
However, in China, Adidas (ADDYY, ADDDF) is the brand respondents are most likely to buy next, followed by Nike (NKE). Adidas (ADDYY, ADDDF) is also considered the most innovative, with the highest NPS score of 50 (although down from 53 in the last survey). Adidas NKE ranked second with 43 points (also down from 49 points), and Chinese brand Li Ning ranked third with 35 points. (NKE) is the most recommended by family and friends, most likely to be purchased next, and the most innovative.
These findings from Chinese consumers should give Nike (NKE) executives reason to worry, if they aren’t already. China will account for 15% of Nike’s total revenue in 2023, down from 16% in 2022. Here too it loses the appeal of its German rivals.
For Adidas (ADDYY, ADDDF), China is its third-largest market, accounting for 15% of its revenue, and the company has ambitious plans to move more production to China and integrate Chinese culture into its international designs middle. After losing market share in 2021-2022 due to COVID-19 lockdowns and boycotts over the company’s stance on cotton/labor in the Xinjiang region, the company is making more aggressive efforts to regain lost market share and beyond Nike (NKE), became the leading market share.
But don’t expect Nike (NKE) to commit to going all-out in China.
“China is a very important market for Nike. It always has been and always will be. We are committed to investing in China. We believe in China. We will continue to redouble our efforts and build on our proven strategies , promoting the success of innovative products in China.
