Why Chinese Customers Are Running From Nike
5/20/202621 min
Nike co-founder Phil Knight visited China nearly 50 years ago and dreamed of selling sneakers. He laid out an ambitious vision—“One billion people, two billion feet”— it was an ambitious strategy. By 2010, China was among Nike’s most lucrative markets, offering a blueprint for U.S. companies seeking to cash in on China’s rise. Today, Nike’s China business is bleeding. WSJ’s Jon Emont explores the cautionary tale of Nike’s rise and fall in China. Ryan Knutson hosts. Further Listening: - Can Nike Make Its Shoes Cool Again?.
- The Missteps That Led Nike Off Course
- The Chinese Coffee Giant Taking on Starbucks Sign up for WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices
Clips
Transcript preview
First 90 secondsRyan Knutson· Host0:00
[instrumental music] 50 years ago, when few American companies were thinking about China, Phil Knight, the founder of Nike, saw an opportunity.
Jon Emont· Guest0:12
He had this, uh, vision, and the vision was called One Billion People, Two Billion Feet. So he understood very early on that this was a huge market.
Ryan Knutson· Host0:23
[instrumental music] That's our colleague John Emont, who covers Asia. He says that Knight's vision turned out to be prophetic. How big of a success was China for Nike?
Jon Emont· Guest0:35
An extraordinary success. I mean, just this awesome cash cow.
Speaker 2· Soundbite0:39
They had a very strong quarter, uh, mainly driven by strength in China and emerging markets.
Speaker 3· Soundbite0:44
Shares of Nike reached an all-time high on Friday. Nike continues to shine, beating bottom and top line, punctuated by 22% revenue growth this quarter.
Ryan Knutson· Host0:54
And the company became a model for Western businesses looking to break into China. [instrumental music] But now, what's happening to Nike in China is looking more like a cautionary tale. Like many American brands, Nike is now struggling there, and it's dragging down the whole company. This quarter, Nike is projecting a 20% decline in revenue in the region.
Jon Emont· Guest1:17
The last four years have, have seen, you know, a really significant deterioration in the brand. Sales have been dropping, you know, fairly precipitously. China is definitely its biggest challenge right