Nike runs quickly to outpace industry in China

To gain market share quickly from advanced sports categories, Nike has changed its priority this year, from direct-to-consumer initiatives — an approach adopted during the pandemic to build a strong direct business in terms of market execution — to a return to innovation and technology.

The shift "marks the beginning of a multiyear innovation cycle", said the company.

This cycle is centered around Nike's patented Air technology. This is exemplified by the recent launch of Air Max DN, featuring Dynamic Air technology across all product categories.

"With AI and digital tools, we can shape Air in new and creative ways that still maintain the performance dimensions of it," Donahoe said.

To boost the innovation cycle, since the beginning of this year, Nike has worked on a project called A.I.R, which stands for Athlete Imagined Revolution.

The objective is to bridge athletes and designers with new technology and digital capabilities. The team listened to the voices of 13 top athletes around the world. The result is 13 footwear concepts that showcase the future of air technology.

On the lack of novelty over the last several years, the CEO acknowledged the difficulty of driving freshness during the pandemic when everyone was working from home.

"We are now back on the offensive, with our team back together in person. When that all comes together, that's the magic that differentiates Nike," Donahoe said.

Olympics as catalyst

The upcoming Paris Olympics will serve as a stage for sportswear brands to present their latest innovations and branding principles.

Nike on April 12 showcased its latest pipeline of innovations together with 40 world-class elite athletes, including the sculpted Air unit in the new Pegasus Premium during the "Nike On Air" event at the Palais Brongniart in Paris.

The company recently rolled out a diverse range of products, including the new Alphafly 3 marathon shoes, basketball shoes, track spikes, football shoes and break-dance shoes.

"Digital tools have allowed us to do things with Air we've never been able to do. We will continue to invest in Air, both for performance and everyday life," Donahoe said.

On imitations of Nike's Air technology, the CEO said it is important to distinguish between genuine innovations and mere replicas.

"Sometimes, you may see things that are simply cosmetic, trying to copy Nike. Those are not real Air. There are no performance dimensions to it," he said.

New sports in the Summer Olympics Games, such as breaking and dancing, will change the way people perceive sports and will expand the definition of sports to include where the younger generation spends their time, said the CEO.

"As those things go from being an activity to becoming a sport, they connect with youth because they see themselves in a different way," Donahoe said.

"Sportswear brands will usher in opportunities with more brand exposure, coupled with increased sports penetration, in the context of Healthy China 2030 in the forecast period," said consultant Zhou.

"In the context of heightened competition in the market landscape of China's sportswear market, brand sponsorship of the event presents a significant opportunity to enhance brand visibility," he added.

This year, for example, brands have geared up to be seen. Adidas on April 18 announced its offering extends to the 2024 athlete pack — a 49-strong footwear collection that equips athletes across 41 different disciplines — more than 20 of which may be seen during the field of play this summer.

Puma on April 10 revealed the 17 federation kits that will be worn by athletes at this summer's Olympic Games.

Lululemon on April 16 revealed its first-ever summer athlete kit for Team Canada ahead of the Games.

The Olympic Games are also expected to generate increased interest in certain niche sports within China, and stimulate the robust development of trend-driven sportswear for categories that have yet to achieve significant market share, said Zhou.

The Olympic Games in Paris are expected to trigger consumer enthusiasm for sports, considering this will be the first Olympics after the pandemic, which helps bring back the buzz into the sportswear market as well, Zhou added.