Nike and other foreign brands to enter the second and third tier markets attempt to achieve business growth

This year in June, in the Hong Kong-listed Li Ning, Anta, Olympic and other sports apparel in the capital stock fell for two consecutive weeks. Simply because a piece of information: acheter air jordan plans second and third line with cheap products into the Mainland market. In fact, Adidas has a similar plan. So, Nike, led by second and third tier foreign brands are Why should the market expansion? To enter the Chinese market has become the second and third tier foreign brands such as Nike, the world the only way to achieve business growth. Nike China market has been the largest overseas market. In 2009, Nike's revenue in China increased 10% over the previous year. And domestic sports brand Li Ning and Anta, etc. revenues are more than 25%. The reason for the huge gap formation is limited because of the long-term foreign brands and wide north-tier cities, while local brands are more to focus on the second and third tier cities. Although the market is large first-tier cities, consumer purchasing power, but the growth is relatively slow, intense competition, higher costs. And with China's urbanization process, the second and third tier level of urban consumers faster income growth, the market is huge. It can be said of Nike who are also self-proclaimed first-tier cities, it is equal to the world's fastest-growing sportswear market ceded competitors. However, Chaussures Sports have success in second and third tier markets will face no small challenge. The first is the adjustment of product lines. Second and third tier cities in China, the most acceptable of the footwear market, priced at 170 yuan to 250 yuan, while sales of Nike's footwear products in China, the prices of 400 yuan to 1,000 yuan in the interval. Therefore, Nike must consider introduction of some products at lower prices. It is estimated that the price of Nike footwear needs to be down 25% range, reaching the level of 300 yuan per pair. However, the price is not easy to implement. Because it means that companies must compress the cost of the product value chain. In order to price down to 300 yuan, a unit of Nike and its suppliers need to drop about 21% profit. The final sales growth can offset the loss of profits caused by price declines in doubt. Secondly, lower prices could damage the brand image, loss of loyalty to the old customers. Finally, a foothold in the second and third tier cities, increasing coverage of sale terminals, Canton, is one can not avoid. To overcome these challenges, Pink Air Rift were not entirely helpless. First, in order to reduce costs, Nike, more factories will need to be transferred to China's interior, and in product design and procurement, and marketing chain to reduce costs. In the channel, should strengthen the construction of flat channels to recruit more local staff, to send more managers to actively communicate with local distributors, thus closer to the rapidly changing needs of consumers. For example, Adidas is only with the agents to change the contact responsible for managing the dealer by the latter strategy, in September this year, with the dealer prior to docking established team.