Once upon a time in the not-so-distant past, Nike and Adidas were enjoying what seemed to be an unbreakable bond with their Chinese fans. Both brands have very popular flagship products with loyal followers, such as the Adidas Yeezy, Nike Air Max, Nike Air Jordan. But this seemingly unbreakable bond started to crumble almost in a split second when the two companies released a sensitive statement in March of this year, leading to an overnight boycott of the brands. A crushing, bombshell “break-up” neither Adidas nor Nike knew was coming -- the boycott was so instantaneous and viral it caused their sales to plummet rapidly from late March and into early May as customers shifted immediately to domestic brands. Although there were other western brands who released such sensitive statements, Nike and Adidas bore the brunt of the boycott and suffered the most. China is the most important market from a growth and profit perspective for both Adidas and Nike, contributing to nearly a quarter of the brands’ revenue as of 2020. Nike and Adidas were the top two players in the China online sportswear sector with ~15% market share. One man’s loss is another man’s gain, so goes the saying. During this entire Chinese-Adidas-Nike fallout, Sandalwood saw domestic brands Anta and Li Ning benefitting strongly from it, outperforming peers in the sector. Specifically, Anta and Li Ning saw their sports shoes and sports apparel sales skyrocket — a stark comparison to Nike and Adidas’ continued nosedive.
Anta and Li Ning wasted no time and capitalized on the opportunity by launching campaigns with local celebrities, new products and special offers, driving their growth along the way -- and causing their stock prices to rally.
Nike and Adidas started restocking their flagship and fans’ favorite products, like Yeezy and Air Jordan -- in anticipation of one of the year’s biggest promo seasons, 6.18, started in late May.
Will Nike and Adidas stop bleeding - and recover from the loss? When and how? Will Anta and Li Ning continue to benefit from the fallout? Let Sandalwood data unveil the answers for you. To learn more about the data behind this article and how Sandalwood data can help you track 1000+ globally listed stocks, please contact service@sandalwoodadvisors.com.
