Nike's Double-Digit Growth In Women's Business Is The Next Step.

After slowing down for the three consecutive fiscal year, Nike's female business has finally returned to the fast lane.

In June 28th, Nike released its 2019 annual fiscal year (May 31, 2019) full year report. Its revenue from women's business reached $7 billion 380 million, an increase of 11% over the same period last year. This is also from the 2017 fiscal year, Nike women's business once again returned to double-digit growth.

"2019 will be a turning point for Nike women's business". Mark Parker, chief executive of Nike, said at the investor conference call in the two quarter of fiscal year 2019 (MarkParker). AndyChampion, chief financial officer of Nike, revealed at the time that the potential volume of the women's sports market was at least 1.5 times that of the male market. "But at present Nike's female business accounts for less than 1/4 of the total revenue, and we hope to change this situation."

According to Zhu Jinqian, general manager of Nike Greater China Women (business), Nike was established in 1972 when there were women's sports related businesses. In 1978, women's category became one of Nike's core business sections. Nike officially announced that the big march into the female market was in the 2014 fiscal year, the first time that the female business appeared as a separate category in the Nike earnings report of that year. In October 2014, Nike released the NikeWomen strategy.

In the 2015 fiscal year, Nike's female business revenue growth has reached the peak in recent years - annual revenue of $5 billion 730 million, an increase of 20% over the same period last year, increasing two times more than that of the male business (9%) in that year.

In the 2016 fiscal year, Nike's female business revenue grew at a high level of 17% over the same period. However, the figure dropped to 8% in fiscal year 2017, and dropped to 2% in fiscal 2018.

In the 2018 fiscal year's earnings report, Nike explained the reason why the growth of women's business slowed down: "the growth of women's business mainly comes from the good performance of sports life (Sportswear) category, but the growth brought by the former is partly hedged by the negative growth of training (Training) category." This reflects the particularity of the female market: on the one hand, more and more women take sport as a way of life instead of simply pursuing the improvement of athletic performance; on the other hand, women prefer sports products with their aesthetic appearance.

Compared with the male market, the needs of female consumers are diverse and detailed. "In the past, many women may wear the same sports uniform in many different sports scenarios. Now in different sports scenarios, women tend to choose different functional and style sports equipment." Zhao Xinyu, an analyst at consulting firm Mintel, said to lazy bear sports.

This means that Nike's traditional "big and all" strategy is not easy to succeed in the female market.

"Before we categorization of products, in fact, more from the perspective of sports projects, to study how to help athletes of different projects to improve their performance." Zhu Jinqian told lazy bear sports, "because both men and women athletes want to run faster and jump higher, so we thought the demand for these athletes in terms of gender was relatively less marked."

At the same time, women's participation in sports has become increasingly diverse. According to a research report of Ying mint, the sports activities of women in the past were more focused on these relatively traditional sports such as running, basketball and badminton, but now the proportion of women taking part in outdoor sports, yoga and fitness programs is constantly improving. Although Nike has ploughed many times in basketball, running and other fields, the movements in these new female sports events are not obvious.

In addition, with the constant release of women's sports consumption potential, a large number of competitors have been gathered in this field. Take Lululemon as an example. From 2015 to 2018, the sports brand, which started with yoga wear, maintained double-digit growth at least every year. With the rise of net red economy and social media, some emerging brands such as OutdoorVoices in North America and Particle Fever in China are developing rapidly. For example, H&M, UNIQLO, Forever 21 and other fast fashion brands have also launched sportswear.

Thus, Nike global women's general manager Rosemary St.Clair published in an open letter in February this year admits: "Nike once defined the definition of women sports and female athletes very narrowly."

On the whole, Nike has maintained high growth in recent years. In fiscal year 2019, its annual revenue increased by 7% to $39 billion 100 million, and the Greater China region achieved double-digit growth in revenue for twentieth consecutive quarters.

"When a company reaches the volume of Nike, it must always think about what direction to expand its business and not to let go of any opportunity in the market." Simeon Siegel, an analyst at NomuraInstinet, a financial company, said: "if big companies want to expand, they must exert themselves in areas where they do not rule themselves. The female market is a direction for Nike."

It is worth mentioning that, thanks to the successful marketing of the 2015 women's World Cup, Nike's female business has enjoyed rapid growth in the 2015 fiscal year. 4 years later, in 2019, Nike chose to force the female market again at this time node. "World Cup year" is naturally an important factor in its consideration.

As early as the end of 2018, Nike signed a contract with Chinese women's football player Wang Shuang to reserve resources for the marketing activities of the women's football World Cup. After that, they signed 3 years with UEFA for 3 years, becoming the sponsor of the women's football champions league and the European women's soccer cup, and also provided the competition clothes for the 2019 women's World Cup teams.

After the women's World Cup entered the warm-up period in late May, 11 of the 13 micro-blog sent by Nike official micro-blog were the promotion of the theme poster and thematic video of the Chinese women's football. This series of micro-blog has finally gained more than 30 thousand forwarding.

After Nike released its 2019 financial year report, CNBC reported that Nike's main growth factor in the past year was selling more sports underwear and women's sports shoes than ever before.

In the second half of last year, Nike launched a new sports undergarment, which not only uses new fabrics and textile technology, but also changes the strength of underwear according to the changes in the movement state of the wearer. It also introduces dozens of sports underwear with different sizes. These sporting underwear have added three sizes of 1X, 2X, and 3X, and the size of the largest cup can reach 44G, so that its products can cover more women with different stature.

According to the British Mint Research Report, more than 50% of the women surveyed bought themselves sports underwear in the past year, and they "tend to consume several different kinds of sportswear of the same color".

"Now women are more inclined to choose a comfortable and comfortable steel ring underwear. For sports brands, grabbing market share from fashion underwear brands may be a potential growth opportunity." An analyst at investment bank Jefferies said.

In terms of footwear products, Nike has increased the size of girls for many popular sneakers this year, and has also launched some "girls exclusive" color matching.

"We find that there are many differences between girls and boys in the love of sports shoes." Zhu Jinqian explained, "but girls used to buy only GS shoes because of their size." So we hope to get more girls to buy their favorite sneakers.

At the beginning of this year, Nike also launched yoga products for the first time. This brand new series is under the category of Training. The product line not only has Female Yoga costumes, but also includes some male yoga products.

In advertising strategy, Nike now also focuses on women's themes.

At the end of February, Nike's heavyweight heavyweight female athlete Serena Williams (tennis), Simon Byers (Gymnastics) and Li Na (tennis) jointly released the female advertisement "DreamCrazier". This is one of the most commercially available ads on Nike's social media platform. A few days later, in March 1st, the official micro-blog @NIKE of Nike Greater China also released a female advertising film starring Li Na, Shao Ting and others. The commercials have been forwarded 47 thousand times on micro-blog, which is the largest number of Nike's Micro forwards since 2019.

In the early June, the Love the Sales, a fashionable retail outlet in London, England, was launched by Nike. However, according to BusinessInsider, the number of search engines on Nike and "big code" increased by 387% in a week, while the sales of one large size sports underwear increased by 200% in the same period.

In Greater China, Nike has launched a public project called "BoundlessGirls" for 9-14 year old girls, and has provided various sports equipment including sports underwear for girls involved in the project.

In Zhao Xinyu's view, consumers' purchase of a brand product actually expresses their recognition of the brand value. "The clothes I wear will actually express my tonality. If consumers agree with the values conveyed by a brand, their consumption behavior will have a positive feedback on the brand. And Nike has grasped the psychology of "self expression" of consumers.

Looking at Nike's earnings in the past few years, we will find an interesting little detail. Every time Nike announces its annual report, the cover of the press release will select a product or character as the cover topic. In the 8 years from 2012 to 2019, Nike used only female characters as its cover in the two year of the women's World Cup.

Whether or not it is coincidental, Nike has once again stepped up the women's market in the women's World Cup year, and has indeed achieved remarkable results. But in the following three consecutive "non World Cup years", whether Nike can continue to maintain the growth momentum of women's business is still uncertain.

Perhaps for Nike, it would be the most important growth point for future women's business to let more girls who did not like sports join the ranks of sports.