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SBD Global/March 6, 2013/Finance

Nike Discount Campaign Threatens Chinese Sportswear Companies

The Shanghai-based National Business Daily reported that "burdened by its high inventories in China, Nike is going to target second- and third-tier cities in its plans to open 40-50 outlets in the country, according to WANT CHINA TIMES. As part of the sportswear giant's plan, these new outlets, each with an area of more than 500 square meters, "will be in charge of selling the company's unsold goods at discounts of 60-70%." This campaign "poses a great threat to Nike's Chinese competitors, which have been staying afloat by offering discounts." The company's policy to venture into second- and third-tier Chinese cities "will also deal a hard blow to Chinese sportswear companies, which consider these cities their stronghold." Chinese sportswear companies "are not a match for their foreign counterparts, with the daily revenues of their outlets typically being about one-tenth" of Nike or adidas (WANT CHINA TIMES, 3/5).
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