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Nike runs quickly to outpace industry in China

Nike showcases its latest pipeline of innovations, together with 40 world-class elite athletes, during an event in Paris in April. [PHOTO/CHINA DAILY]

Global sportswear brand Nike is doubling down on the Chinese market by leveraging a responsive and localized creative platform as well as innovations centered on its patented Air technology.

The initiative — to drive growth — aims to bring in freshness, solidify its dominant position in the sportswear industry, and enhance its connections with younger consumers globally.

John Donahoe, president and CEO of Nike Inc, said the sportswear brand will continue to invest steadily in China.

“China is a very important market for Nike. It always has been and always will be. We’re committed to investing in China. We believe in China. We’ll keep doubling down on our proven playbook for success in driving innovative products in China,” he said.

Nike Inc posted a 6 percent year-on-year growth in sales in China to $2.08 billion in the third quarter of fiscal year 2024, the sixth consecutive quarterly increase here for the sportswear company.

This was powered by its Dragon Year collection during the Spring Festival holiday and innovations in running, basketball, women and kids categories.

The company has leveraged its global innovation platform to drive novelty in China.

“You will see us increasingly bringing exciting innovations all over the world based on Air technology,” said Donahoe. “We can hyper-localize them for markets in China and other markets.”

For example, the global launch of Air Max DN shoes is expected to have a China-specific version, featuring local colorways, collaborations, campaigns and engagements with athletes, he said.

Nike has invested more than 2 billion yuan ($276 million) in its technology center in Shenzhen, Guangdong province, and an automated storage and retrieval system in its China logistics center in recent years.

Nike is also investing in local innovation capabilities, as demonstrated by the establishment of its Nike Sport Research Lab this year.

The lab works with Chinese athletes and consumers to gain insight and develop innovations driven by, and unique to, the Chinese market.

The company is also investing in hyper-localizing its storytelling and brand through Icon Shanghai, which plans to be a creative studio program aimed at translating global messaging into locally resonant content, responding rapidly to the dynamic Chinese market.

Donahoe said it is crucial to stay close to consumers, particularly in China, where consumer preferences evolve quickly.

“We’re doing things to accelerate how quickly we can respond to the consumer. China’s really the market where we’re doing that the most. We’re leaning in, trying new ways to pull forward innovations and get them in the market.”

“We are going to speed up the innovation cycle for each season and each product based on the market feedback,” he said. “We want Nike to be a global brand for Chinese consumers and it’s of China.”

The CEO emphasized the dynamic nature of the Chinese market, describing it as “innovative and progressive, in style and the digital world”.

“We’ll continue to innovate in China, enhancing both online and retail experiences across over 6,000 retail stores,” he said.

“We believe that Chinese consumers are ahead of the rest of the world in many ways. We take learning from China to the rest of the world.”

Donahoe said both the Nike brand and the Jordan brand have several potential opportunities in China.

The company opened its World of Flight, a top-end retail concept of the Jordan brand, in Beijing last month. Nike has run mono-brand stores such as the Nike Rise, Nike Style, and the House of Innovation, its flagship store in Shanghai.

Digitally, the company operates its own applications, as well as stores on e-commerce platform Tmall and short-video sharing platform Douyin.

“What’s interesting is you don’t have a digital or physical consumer. Sometimes you shop online. Sometimes you go into store. We need to be there with both,” Donahoe said. “Nike is a premium brand and we’ll try to drive and deliver a premium experience in China.”

Innovation on Air

Competition in the sportswear sector in China has intensified, with new players capturing significant market share in their respective categories.

Kemo Zhou, consultant researcher at Euromonitor International, said in 2023 the overall sportswear market in China remained under the dominance of leading sportswear groups. However, intensifying competition from fast-growing brands has been a significant impetus for the growth of the overall sportswear category.

Zhou cited outdoor brands such as The North Face, Camel and Salomon emerging as major contenders.

Meanwhile, Lululemon has maintained its remarkable growth trajectory, Zhou added.

“Initially associated with yoga apparel, the brand has witnessed a surge in popularity transcending its core market segment. Consumers increasingly integrate Lululemon’s products into their everyday wear,” he said.

Zhou said the increased consumer interest in equipment-free exercise, particularly running and hiking, has fostered demand for sports footwear brands specializing in specific activities, such as niche running shoe brands Hoka and On.

Beijing’s Fengtai district unveils first private tech innovation center

Beijing’s first private enterprise technology innovation center was unveiled on Tuesday in Fengtai district. [Photo provided to chinadaily.com.cn]

Beijing’s first private enterprise technology innovation center was unveiled on Tuesday in Fengtai district. The center provides a 100,000-square-meter industrial and service space for private technology enterprises, aiming to foster the development of new quality productive forces and nurture cutting-edge industries.

In recent years, Fengtai has engaged with partners in fields such as rail transportation, aerospace and the digital economy, attracting 600 enterprises to its fold, according to the district government.

Wang Shaofeng, Party secretary of the Fengtai district, expressed the district’s commitment to serving the capital’s functions and promoting integrated urban-industrial development.

He stated that Fengtai will continue to make progress in various sectors to accelerate high-quality development.

Future and modern industries are two key areas on which the district focuses. The satellite internet industry park, located in the Fengtai Science and Technology Park, spans approximately 100,000 square meters and focuses on the development of satellite application industries, including communication, navigation and remote sensing.

The industrial park aims to attract more partners and establish a new commercial aerospace industry hub.

Meanwhile, the Beigong low-altitude economic industrial park in Fengtai’s Beigong Town is set to release around 2 million square meters of industrial space gradually.

Leveraging Fengtai’s aerospace and rail transportation industry clusters, the park will prioritize the top-level design, research and manufacturing of products such as drones and flying cars.

As one of Fengtai district’s nine key signed projects, the largest JD home appliance mall in the country, invested by JD Group, is poised to settle in the district.

Spanning around 70,000 square meters of retail space, it will include trendy home appliances, home decor, entertainment and outdoor sports, offering consumers a comprehensive “one-stop home” shopping experience.

According to district government data, in 2023, Fengtai’s regional GDP was 218.75 billion yuan ($30.18 billion), a 6.5 percent increase from the previous year.

Fixed asset investment reached 78.49 billion yuan, marking a 19.6 percent year-on-year growth. The district’s market vitality continued to surge, with 21,300 new market entities established, a 32.2 percent year-on-year increase.

The world is young domestic firms’ oyster

A view of the booth of Huawei at the 2024 Mobile World Congress Barcelona in Spain earlier this year. GAO JING/XINHUA

In 2014, a group of experts in smart manufacturing, each of them boasting around 15 years of work experience, gathered in a three-bedroom apartment in Beijing and decided to start up with Beijing Roborock Technology Co Ltd. What was extraordinary was their clear and simple ambition: to develop the world’s best robotic vacuum cleaner.

Ten years on, their dream has come true. Roborock is a leading player in its sector and, in terms of global sales in 2023, the top-selling brand among smart vacuum cleaners worldwide, according to Euromonitor International, a market research firm.

Its products are available in more than 170 countries and regions, with nearly half of its revenue coming from overseas markets.

Quan Gang, president of Roborock, summed up the success story.”From day one, our eyes were set on the global market. From the very beginning, we have sought to meet the demands of global users. Our product design, production and marketing efforts have been tailored to meet their demands from the outset.”

That helped the startup to remain flexible and nimble while preserving its unique technology. Corporate executives and experts said Roborock is the epitome of new-age Chinese enterprises that see the world as their oyster right from day one.

Such companies are quick to recognize that growing globally competitive brands in their respective segments is critical to success these days. They rely on both China’s manufacturing prowess and their own strengths in research and development.

What distinguishes them from the previous generation of globally known Chinese enterprises is their global vision and clarity on goals. While the previous lot went global only when they had grown big enough in the domestic market, the new bunch target the global market from the very beginning, experts said.

Huang Chenhong, president of German software and cloud giant SAP Greater China, who has witnessed the transformation of Chinese companies in their global expansion over the past three decades, said, “Despite challenges such as lackluster global demand and geopolitical uncertainties, Chinese companies have not slowed down their pace of going global.”

Data from China’s Ministry of Commerce prove his point. Chinese enterprises’ outbound direct investment grew 5.7 percent year-on-year last year to exceed 1.04 trillion yuan ($143.7 billion), highlighting their continued expansion overseas.

“I think globalization is now entering a new stage. Globalization today involves more Chinese companies expanding their business overseas,” Huang said. “We can see many enterprises, whether State-owned, private or even small and medium-sized enterprises, have 30 to 50 percent of their business overseas. Some companies are even born to serve overseas markets and have never considered doing business domestically.”

Chinese companies have attained a stage of technological innovation where they are starting to embody the spirit of multinational corporations.

“In the past, when we talked about MNCs, we thought of German or American companies. Today, Chinese companies come to mind naturally,” Huang said, adding that SAP has helped many Chinese companies such as Lenovo, BYD and Mindray navigate the international waters over the past three decades.