Nike and Adidas Going for Gold
By Bernice Hurst, Managing Partner, Fine Food Network
Millions of people worldwide have been watching the Olympics these past few days. And watching the athletes attired in competing costumes. According to news reports, Nike and Adidas have spent not millions but billions on making their brands as visible as possible.
Although Britain’s Guardian, for one, describes the competition in terms of capturing what it describes as “the fastest-growing sportswear market in the world,” audiences all over the globe are seeing the iconic trademarks. Competition for visibility was hot. Adidas sponsored the games themselves and the Chinese Olympic committee while Nike sponsored China’s teams in 22 out of 28 sports.
Paul Pi, Adidas China’s vice-president of marketing, said, “If you want to lead globally, you have to lead in China.” Although the market in China is a fraction of the American market, it has been growing at 30 percent annually for the past five years.
Nike’s spokesman, Charlie Brookes, says the American company wants to focus on individual achievement. “For us, it’s about connecting with athletes: we make products that make them perform better and then build on the excitement that creates.” Pointing to the ultralight Hyperdunk shoe for Kobe Bryant and Asafa Powell’s Zoom Aerofly, he added that ordinary consumers benefit from the same technology.
Of course, this week’s devastating failure of Chinese hurdler Liu Xiang demonstrates
the danger of individual endorsements. The star was set to wear Nike shoes
in his races and, presumably, on the victory stand, an Adidas top. Following Liu’s pullout due to an inflammation of his right Achilles’ tendon, Nike quickly responded with a new
ad displaying the athlete’s somber face and the ad copy, “Love sport even
when it breaks your heart.”
Analysts believe the two firms are nearly tied for market share in China at the moment and needed the sponsorships to raise their profiles. Terry Rhoads, of Shanghai-based sports specialists Zou Marketing, estimated China could overtake the U.S. as the biggest single market by 2025 while Greg Paull, co-founder of marketing consultants R3, believes Adidas was threatened by Nike’s deals with individual athletes. Meanwhile, one of China’s own athletes has started a sportswear business that is providing even more competition. Which means that with 400 million under-20s to target, no one yet is in the lead and the eventual positioning on the podium remains to be decided.
Discussion questions: What payback do you expect Nike and Adidas will receive from their marketing investments in the Beijing Olympics? Will it benefit Nike and Adidas in China? What impact will it have on U.S. sales?
- The real Olympics competition: Nike and Adidas claim China’s heroes
Global sportswear firms battle it out for a multibillion-dollar prize – Guardian