Nike will invest more in China
President of the Nike brand, Charlie Denson, has said that the company will continue to invest heavily in China, as the company plans to double sales in China by 2015.
Nike is not concerned about its business expansion, which will focus on emerging markets such as China, Mr Denson said in an exclusive interview with Chinese newspaper, Xinhua.
“We certainly will continue to invest in China, and very aggressively. We are very excited about the growth opportunities here,” he said.
2011 marks the 30th anniversary of Nike’s operation in China. It took the company 26 years to make $1 billion of revenue in China, but only four years to double it at the end of the last fiscal year in May. China has become Nike’s biggest market outside the US.
The brand has more than 7,000 retail stores in China, and now plans to expand distribution to second and third-tier cities.
“I think the great thing about sports is that it doesn’t matter if you live in Shanghai or Beijing or Wuhan, or wherever, I think you’re still looking for the best and the most innovative products available, and that is what gives us such confidence,” he said. “We will continue to grow as we move into the lower tier cities – athletes still want the same products.”
Mr Denson said the company will increase its presence in Shanghai by recruiting more and developing more locations.
In its latest fiscal quarter ended August 31, Nike posted a profit of $645 million, up 15% year-on-year. Revenue increased 18% from a year ago to $6.1 billion.
Despite the increase in sales, Nike also comes under pressure from rising labour and material costs. “Certainly the spiral cotton prices affect every area, and that was a seasonal situation, I think it will ease over time,” Mr Denson said. “I think when you look at the overall trade and labour markets around the world, China continues to be a very viable resource, and we continue to manufacture a lot of our products in China.”
