SBD/Issue 162/Sponsorships, Advertising & Marketing

Nike, Adidas Court Chinese Consumers Via Olympic Sponsorships

Nike To Use Beijing Olympics As Springboard
To Gain Larger Market Share In China
Nike this summer will "take on Adidas AG and its other athletic-gear rivals" in a bid to use the Beijing Olympic Games as a "springboard to gain a larger share of the world's fastest-growing major market," according to Andria Cheng of MARKETWATCH. Nike's strategy is to "strike a chord with the Chinese public," so the company is "trumpeting a series of shoe models in sport categories ranging from weightlifting ... to wushu, a martial art that will be an exhibition sport at this year's Games." Nike is "entering shoes in 32 athletic categories, nearly tripling the number it had just four years ago" at the Athens Games. Nike Creative Dir for Olympic Footwear Sean McDowell said that Nike is getting into sports like weightlifting, wushu, taekwondo, boxing and fencing "primarily because they're high-profile events for the Chinese." Cheng noted it is "unlikely that Nike would ever mass produce shoes in all 32 sports categories," but the company believes that an athlete "winning a competition clad in its gear can help create a coveted consumer association with its brand." Meanwhile, adidas is countering Nike's efforts with a campaign titled "Together in 2008, Impossible is Nothing." The campaign marks adidas' "biggest marketing blitz, with a message crafted by its marketing team in China." adidas Chair & CEO Herbert Hainer said that the Beijing Olympics would help adidas "become the market leader in China this year."

NEW BATTLEGROUND: While Nike commands a 40% share of the U.S. footwear market vs. adidas' 15%, the companies are "locked in a much tighter race in China." The marketplace competition in the country has included "grassroots marketing ploys, sponsoring local sports teams and players and appearing in new sales locations at a breakneck pace." Euromonitor data for '06 indicated that Nike was the "largest foreign shoe brand in China, with a 9.8% share of the total footwear market, followed by Adidas at 8.2%." Nike sponsors 22 of the 28 Chinese sports federations, while adidas has the "rights to outfit referees and event staff" at the Olympics. adidas also will "outfit Chinese athletes with uniforms when they're awarded medals," as a result of its sponsorship of the Chinese National Olympic Committee (MARKETWATCH.com, 5/9).

ALSO IN THE RACE: BUSINESSWEEK's Frederik Balfour reports China-based athletic shoe and apparel company Li Ning also has "quite a lineup of sponsorships for the Beijing Olympics," including the U.S. table tennis team, the Sudan track & field team and Sweden's Olympic team for the Opening and Closing ceremonies. While Li Ning "once ruled China's sneaker business," the company now "lags behind giants Nike and Adidas even at home." Li Ning VP/Brand Marketing & Int'l Business Abel Wu acknowledged the company does not have "as strong a brand" as Nike and adidas. But Wu said, "Our thinking is that as a local brand, we need to have an international image." In addition to Li Ning's int'l sponsorships, the company is running an ad campaign titled "One Team, One Belief," which features European, African, South American and Chinese athletes "standing in a stadium with their hands across their hearts." Li Ning also is sponsoring the "NBA Jam Van Tour," which travels through Chinese cities and includes a basketball court that "can be assembled at every stop." Local kids are "invited to participate in competitions," such as the "Li Ning Slam Dunk Contest" (BUSINESSWEEK, 5/12 issue).



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