Nike "has built up" a nearly 60% share of the U.S. market for trainers, according Whipp & Shotter of the FINANCIAL TIMES. Adidas has just 4.4%.
The German group "is far more competitive in sports clothing and markets outside the US." The duo is "neck-and-neck in western Europe," adidas "is a long way ahead in Russia," and Nike "has a narrow lead in China."
But Nike’s dominance in the world’s most important market for trainers "gives it a painfully sharp edge" on adidas, which "has adopted a strategy to claw back share in sportswear," with an emphasis on the U.S. With such a big gap to close in footwear, adidas "has a mammoth task on its hands." Matt Powell, sports industry analyst at research firm NPD, which calculated the market share data, said, "Outside the U.S. there is much greater parity between Nike and adidas. But the U.S. is the epicenter of the global sneaker/'athleisure' market. Ultimately, to win globally, sneaker brands must win in the U.S. Nike has a deep and rich understanding of the U.S. sneaker consumer."
Nike "has been a runaway success over the past five years." It is the world’s biggest sportswear company by sales and in the year to June revenues rose a tenth, to $30.6B. Adidas, meanwhile, reported a 6% rise in revenues on a currency-neutral basis to €14.5B, for the full year '14.
The western European market "shows how tough this race will be." Over the past three years, the sales growth of the Nike brand "has outstripped that of the German group’s Adidas and Reebok brands by 10 percentage points on average, once currency fluctuations are excluded, according to analysts at UBS." Euromonitor Int'l senior analyst Natasha Cazin: "Alarmingly for adidas, Nike has caught up in its core western Europe market, and may overtake it in the short term."
She noted that Nike’s "aggressive push in the region has helped it gain market share and made it the leading brand in seven European countries."
Berenberg analyst Zuzanna Pusz said that "even maintaining the dead heat in which adidas now finds itself with Nike could be hard." She said, "Adidas is doing fine in western Europe, but they should be as they are spending 14 percent of their sales on marketing. The question is whether this is sustainable. The average for the industry is between 10 and 11 percent."
It helps adidas that the so-called athleisure wear trend "is strengthening." As more people wear casual sports clothes in situations -- even work -- that were once considered more formal, there is "room for many companies to expand."
However, this also means there are "more companies to overtake it." Under Armour, a relative newcomer, last year sold more trainers, tracksuits and T-shirts than adidas in the U.S.
And fashion "is fickle." Some analysts question whether sports brands "really benefit by focusing on chasing trends or working with celebrities" (FT, 8/7).
