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SBD Global/October 11, 2013/Finance

Nike India Planning To Use Running To Reach Teenage, Young Adult Market

Nike "is now digging deeper to reach its core audience -- the teenage buyer," according to Antonita Madonna of the Indian BUSINESS STANDARD. In India it is "sharpening its use of the audience's regular digital and physical haunts" -- social networks, mobile phones and colleges. So far Nike "had associated with cricket" (as the official sponsor of the Board of Control for Cricket in India and known for its Bleed Blue campaign) and football. But "when reaching out to teenagers and young adults in their physical spaces" such as colleges, the brand is betting on running. Nike India Marketing Dir Avinash Pant said, "In India, there is an incredible revolution in terms of running. It has long legs because it is a sport that is easier to embrace. There is a huge momentum as it is becoming a community sport." The company "is attempting to grow the sport by partnering with college festivals." Nike "is exploring a possible tie up" with IIT Mumbai for its much-publicized fest, Mood Indigo, held in December. It recently partnered with NMIMS, Mumbai for "Umang," and hosted a 4,000m race. This was followed by Kaleidoscope, "the fest at Sophia's College, Mumbai." To walk the talk when its young consumers, an impatient lot, walk in, Nike "has spruced up its outlets as well." Not only has it labeled its racks with footwear for different sports, "it has opened stores that predominantly offer running gear and gait analysis to understand the kind of footwear best suited to an individual" (BUSINESS STANDARD, 10/9).

NIKE BY THE NUMBERS: In Portland, Allan Brettman wrote Nike CEO Mark Parker's revenue forecast of $30B by FY '15 and $36B by FY '17 was the "top announcement among several key predictions made" during the company's Investor Day. Nike VP & GM of Global Basketball Craig Zanon said that with "footwear and apparel from Nike, Jordan Brand and Converse, Nike is the clear leader worldwide in basketball." He added that socks "designed specifically for basketball" earned $100M a year in revenue in the U.S. and is "expected to grow." With Nike's marketing backing, the product also is "expected to be popular globally." Meanwhile, Nike VP & GM/Women's Training & Fitness Heidi O'Neill said that the company has "introduced an array of products targeting women that has been well-received." Women's revenue is expected to grow from $4B a year to $7B. While the company "will not hit its revenue targets in the Greater China region as quickly as it forecast in a similar meeting two years ago, company executives detailed plans to reignite sales in that part of the world" (Portland OREGONIAN, 10/10). Nike's FY '13 revenue was reported at $25.3B in late June (THE DAILY). Nike VP & GM of Global Categories Jayme Martin "staked out Nike's ground in the world of soccer." He said that when the brand "entered this category it was not well-received." Martin said the popular reception was, "We didn't belong. We didn't have the heritage. We didn't know the game ... well, we lead the market now" (OREGONLIVE.com, 10/9).

FOCUSING ON CHINA: Nike execs said that the company is "recalibrating its approach to consumers" in China, and has a plan on "how to reignite what once was double-digit growth." Nike CFO Don Blair "rejected the idea that the company had miscalculated China." He said, "We set ourselves a goal and we won't make the goal on the original timetable. But we're absolutely confident we will make that goal in time." Blair added, "In China, we have a market that's evolving, the consumers' expectations are changing and we're evolving our business. We've had a period and we will have some time on resetting our revenues. We've said this year we'll be flat but we're absolutely convinced we will grow again in China and we'll grow at an accelerated rate" (OREGONLIVE.com, 10/9). At presstime, shares of Nike were trading at $73.13 per share, up 3.2% from the close of trading yesterday (THE DAILY).
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