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Nike in China: How is its brand presence compared to competitors and what is its future in terms of business and strategy? [for English-speakers]

• I'm fascinated with Nike as a brand and product within the Greater region of China. Nike's annual revenue - according to Craig Cheek, VP of Nike and GM for the region - is said to have exceeded $1.7 billion of its total $5.1 billion earned for the 2010 fiscal year. Although I've done some digging around, its tough to pinpoint and confirm those numbers. But its amazing to see how well the company has penetrated the emerging markets like China and Brazil as there is a higher shift of focus in those areas as compared to the mature markets like the U.S., Europe, and Japan. Regardless, I'm curious to know how China will shape up in the future for Nike - not only in regards to the financial situation and market cap, but also with regards to domestic competition (since the PRC places heavy favorites with its "imitator" market). I wish there was more depth of information regarding its current strategy - how it will overcome regulation, whether China will bilaterally grow as a market for both manufacturing and distribution; and even information on local sponsorships, product innovation and breadth, and how important this market is for one of - and if not, the biggest sportswear and equipment supplier in the world. Its future especiially with its dual-popularity in both the Nike brand and non-Nike brands, such as Converse, and Hurley, is optimistic and unbelievably popular with the Chinese. But how popular - what is some of the quantitative and qualitative data? I'm a huge fan of the company, how it has developed as brand name and organization, and would love some insight about its progress in the People's Republic of China. Some lingering questions include:  - competition and brand awareness: how well the locals are familiar with Nike (loyalty to a "luxury" good) or if there is a preference toward a local supplier, like Li Ning (李宁). How much market share does Nike currently leverage and what will it do to create or pursue a higher gain  - social media presence (if any)  - advertising campaigns - of which many I think are fascinating and creative (if you can navigate your way through the mostly-mandarin domains), however more interesting if they could be broadcasted through an English communication channel as well  - cultural barriers - what it has done to compete in such a wildly different and unique environment  - CSR and sustainability initiatives  - PR strategies, local events and activities - celebrities they endorse and exciting news about Nike's relationship with the local communities I studied in Hong Kong and completed research in Mainland China with brand-name products, and observed Nike's progress and popularity in both regions. Its really fascinating to see Nike enlighten and unload its products into such a transformative society, with a growing middle-class perusing the luxury good domain prepared to unleash their pockets full of disposable income.  Educate me! I'm still an observant undergradaute who is obsessed with emerging markets, particularly China, and would love some professional insight. I hope one day to work for Nike :)

• Answer:

  According to China Daily, Nike's market share of China's $10billion sportswear market was 16.7% in 2009.  However, this market share percentage is unchaged from 5 years ago, while Li Ning has displaced adidas as the #2 player, and is attacking fast.  China is now Nike's second largest market behind the U.S. (nearly 11% of sales at $460 million Q3 2010). Nike's response to Li Ning's surge has been to adopt a straddling strategy: 1) introduce lower priced shoes into 2nd and 3rd tier markets in China, including smaller retail channels 2) push the premium experience through stores and online. The second strategy seems perfectly inline with Nike's core competencies: marketing and strong brand curating.  The former will prove challenging in a largely disaggregated retail market with many local players.  And that's before including the x-factor of knock-offs and piracy. Meanwhile, Li Ning is said to be looking at the slow-growth profit center of the U.S. market. http://www.sportbusiness.com/news/182197/china-sales-soar-raise-nike-to-its-highest http://www.chinadaily.com.cn/business/2010-08/30/content_11223459.htm http://usa.chinadaily.com.cn/epaper/2010-12/03/content_11650199.htm