Nike (NKE) is the world largest manufacturer (by sales) of athletic footwear,Air Jordan 13 Retro, apparel and equipment. The company traditionally competes with manufacturers like Adidas (PINK:ADDYY), Puma (ETR:PUM) and Reebok. Previously, we identified China as one such opportunity (Nike Commodity Costs Rising, but Expansion Opportunities Could Lift Stock).
Reports indicate a growing interest in recreational products and services in India. The chart below features predictions by consulting firm McKinsey (from 2007), suggesting a rapid uptick in spending in the years ahead despite flat growth through the past few decades. [1]
(Click to enlarge) Annual Spending on Recreational Products Services in India - Original Source Mckinsey
Still, Nike must navigate a few notable challenges to achieve this potential upside. Below we highlight key trends.
Traditional School and College Focus - Academies and colleges tend to be bulk buyers of sports products. According to one survey, school children constitute a large portion of the sports market, and tend to stay loyal to a particular brand. market is a bit different than India, where there is a lack of school-level sports associations. The MSSA (The Mumbai School Sports Association) is likely the only major such association, with over 360 schools in Mumbai. [3] Historically, school-level sports have often been considered a deviation from the more important focus of education. Some of this is attributable to lower promotion and sponsorships for sports in the country. While activities like cricket,Cheap Lebron 10, badminton and chess lead in popularity in India, Nike core segments like football, basketball, and running often take a back seat. [4]
Low Market Share The premium-brand sportswear market in India is estimated to be near $1 billion, 75% of which is controlled by Reebok and Adidas. [5] Nike market share is closer to 15% to 20%, meaning that (by a rough estimate) India accounts for only 1% of Nike total sales. [3] Clearly, Nike still has a long way to go in India and might need to discount to grab market share.
Opportunity lies ahead, however,louis vuitton wallet, with a large population, growing urban demographic, and increasing status of sports in India. Can Nike strategically penetrate the Indian market,authentic louis vuitton, leveraging its market leadership in other regions to tap this market growth? The modifiable chart below highlights the potential impact to the company stock value from various global footwear market share scenarios.
(Chart created by using Trefis' app)
Notes:
The Sports Retailing Industry in India, Italian Trade Commission page 11, 2010The Sports Retailing Industry in India,Nike Shox Women, Italian Trade Commission page 30, 2010The Sports Retailing Industry in India,Air Jordan 7 Retro, Italian Trade Commission page 31, 2010The Sports Retailing Industry in India, Italian Trade Commission page 33, 2010The Sports Retailing Industry in India, Italian Trade Commission page 38, 2010 Disclosure: No position相关的主题文章：
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