Nike … With respect to the Chinese economy, the contribution of the consumer sector is much lower compared to India and South Korea. It uses separate campaign or strategy to cap the market potential of the different segments.Targeting is the important aspect of the marketing strategy, especially when a company is in different businesses. Plus, Nike is facing strong competition from companies like Under Armour (UA) and Lululemon Athletica (LULU). According to Nike, conversion from licensees to a direct distribution model had a minimal impact on Converse’s fiscal 2019 revenues. FedEx Executive Richard Smith Owes Much of His Wealth to His Father, Europe, Middle East, and Africa (or EMEA), North America is Nike’s largest segment, accounting for 40.3% of total revenues in Q1 of fiscal 2020, down from 41.7% in Q1 of fiscal 2019. It also launched the Nike+ FuelBand. Will Cruise Ships Sail in 2021 and Will the Industry Recover? When labor costs there climbed in the mid-1970s, it gave South Korea and Taiwan a run. NIKE, Inc. (NYSE: NKE) announced today that Tom Peddie will become VP and GM of the Emerging Markets geography. Notably, China is a key target market for several luxury brands. An emerging market (or an emerging country or an emerging economy) is a market that has some characteristics of a developed market, but does not fully meet its standards. However, it also sees some stabilization in that domain now. The brand’s percentage contribution to Nike’s top line has come down over the last five years. It includes casual apparel and footwear products, which are sporty but not necessarily high performance. Converse’s target market focuses on consumers of casual sneakers, accessories, and apparel. Read More: Nike is the leading sports footwear and apparel company in the world. The company went high-tech with its push into digital sports and e-commerce. Brazil, the largest economy in Latin America, is another of Nike’s key target markets. In comparison, Nike’s major competitor in the US market, Under Armour, NKE, UA, and VFC are part of the Vanguard Total Stock Market ETF, Nike’s North American segment grew at a compound average growth rate (or CAGR) of 1.5% from fiscal 2017 to fiscal 2019. This number rises to 70% when considering only footwear factories. Its portfolio brands include the NIKE … Meanwhile, Latin America has reported subdued growth over the last five years. North America is Nike’s largest market. Innovative Products – Although Nike has produced many products, there is still a lot to innovate. Nike consolidates Asia (ex-China) Pacific and Latin America as one reporting segment. Nike expects emerging markets to outpace the growth rate of its developed regions and grow at a low double digit rate. US-based Nike is the world leader in athletic footwear and apparel. Nike’s high-performance athletic gear is mostly targeted at professional athletes. This is higher than what the company achieves in its developed markets. Analysts believe that, Nike Free Shoes, Nike can not develop if the second and third tier cities in China's… NIKE, Inc. is engaged in the design, development, marketing and selling of athletic footwear, apparel, equipment, accessories and services. Select each division with the arrow. Nike's emerging market story is starting to show financial returns for the company. Nike delivers innovative products, experiences and services to inspire athletes. In the 1990s, production jumped to Indonesia and China, which now account for two-thirds of Nike … Furthermore, Greater China is a high-margin market for Nike. Like Gillette, companies that hope to capitalize on emerging market opportunities during a global expansion need to begin by identifying the market with the most potential for success. Nike’s innovations, products, and services seek to develop athletic potential, according to the company. To get more information on Nike Inc 's FOOTWEAR, APPAREL, EQUIPMENT & OTHER, OTHER, North America, EMEA, Asia Pacific, Other Emerging Markets, Global Brand Divisions, Total segment. Now, it reports Europe, Middle East, and Africa as a consolidated business segment. This timeline depicts Nike's revenue in emerging markets from 2009 to 2017, by segment. This would benefit consumer discretionary companies like Nike, especially considering the boom in sports and sports marketing in China. The second aspect that we need to consider is that revenue growth in North America, which is Nike’s biggest geographical market, has sagged. Save money on things you want with a Nike Emerging Markets deals, promo code and coupons. As a result, Greater China’s percentage contribution to Nike’s top line has increased significantly. As a key target market for Nike, Greater China’s sales have been growing at a brisk pace. Plus, continued innovation and product quality are keys to success. “We are looking forward to his leadership in the Emerging Markets as we continue to elevate the brand, build strong consumer connections and drive premium marketplace executions.”. Leadership. Strong topline growth and high margins make Greater China Nike’s key target market. Should You Invest in Organic Fertilizer Stocks? Notably, Converse has been losing ground in North America to brands like Vans. Leaders of emerging markets are willing to undertake the rapid change to a more industrialized economy to remain … Revenues for the NIKE Brand were $7.7 billion, up 8 percent on a currency-neutral basis driven by double-digit growth in Western Europe, Greater China, Emerging Markets and Japan, including strong growth in … Being present i… "Tom has been instrumental in driving Nike’s holistic marketplace management strategy worldwide," said Trevor Edwards, President of the Nike Brand. It optimizes the manufacturing and production processes. The Company's operating segments include North America, Western Europe, Central & Eas tern Europe, Greater China, Japan and Emerging Markets. Nike uses psychographic segmentation variables to make its offerings more attractive to the target customers. It reported an EBIT margin of 21.9% in the quarter. This is not surprising when considering that 65 out of the 75 largest companies globally originated in developed countries, which only acc… Nike purchased Converse in 2003. Firstly, Nike’s sales in the region have increased sharply. The EMEA segment accounted for 26.0% of Nike’s revenues in the first quarter of fiscal 2020. Investors The APLA segment’s EBIT margin was 25.3% in Q1 of fiscal 2020. Skillz Is Taking Esports Public — Will Other Competitive Gaming Platforms Soon Follow? Nike Inc. shares moved toward fresh record highs in after-hours trading Friday, after the athletic-apparel giant reported a return to revenue growth. The segment is the smallest geographical region for Nike and accounted for 12.6% of its Q1 of fiscal 2020 revenues. To do that, they first need to understand what constitutes an emerging market. We’ll also look at how these key target markets have performed over the last couple of years. Nike acquired Converse in 2003. Consumer spending should be a crucial growth driver in China going forward. Nike’s operations consist of the design, development, marketing, and sales of athletic footwear, apparel, and equipment. Historically, its first and fourth quarters have been relatively stronger in terms of sales. Peddie has previously held senior-level management positions in Nike’s global sales organization having served as VP Sales for both Asia Pacific and North America. By growing 8% in 2012, the company added that much in just 12 months. It took the company 18 years to earn its first $2 billion in revenue. In 2017, Nike changed its reportable operating segments. Between fiscal 2017 and fiscal 2019, the region’s revenues increased at a CAGR of 7.2%. Last year, Converse incurred higher administrative expenses due to higher marketing expenses and investment in digital business. First coined in 1981, emerging markets, or emerging market economies, are natio… Wholly-owned NIKE, Inc. subsidiaries include Converse Inc., which designs, markets and distributes athletic lifestyle footwear, apparel and accessories; and Hurley International LLC, which designs, markets and distributes surf and youth lifestyle footwear, apparel and accessories. From its status as an export- and investment-led economy, China has been trying to steer its economy toward a consumption-driven economy. NIKE, Inc. based near Beaverton, Ore., is the world’s leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. Its sales are seasonal and dependent on geography. Nike acknowledged the evolution of the North American retail market as consumers shift toward online sales. With an eye toward ensuring future growth, young athletes are also a big part of Nike’s sales strategies, especially in categories such as soccer, basketball, and running. Furthermore, if the US-China trade war worsens, US brands like Nike could face backlash in China. The Company's operating segments include North America, Western Europe, Central & Eastern Europe, Greater China, Japan and Emerging Markets. Women are an important part of Nike’s target market. Five years ago, Greater China’s contribution to Nike’s revenues was in the single digits. The Greater China segment should benefit from the Chinese government’s efforts to increase consumer spending. Nike’s other competitor is Puma, the third largest shoe and sports clothing supplier. The company introduced the Nike+ running sensor in collaboration with Apple (AAPL). The United Kingdom, France, Germany, Austria, and Switzerland are Nike’s key target markets in Europe. In Q1 of fiscal 2020, the segment’s EBIT margin was almost 40%. Peddie is currently VP of Global Sales and is a 24-year Nike veteran. While apparel and footwear is fragmented, concentration increased during the review period, with many of the largest companies expanding their geographical reach beyond their home markets. In this article, we’ll look at Nike’s target markets. Nike (NYSE: NKE) announced its Q3 2019 financial results on March 21, 2019 followed by a conference call with analysts. Nike and Emerging Economies. We’ll also look at the risks and opportunities that Nike faces in its target markets. Emerging markets have lower-than-average per capita income. In Greater China, economic growth has slowed down. In this article, we’ll look at Nike’s key target markets. Nike (NKE) is the world’s leading sports footwear and apparel company. How? Peddie is currently VP of Global Sales and is a 24-year Nike veteran. It accounted for 15.8% of Nike’s total revenues in Q1 of fiscal 2020. However, it is one of the company’s more profitable segments, with an EBIT (earnings before interest and taxes) margin of 25.6% in the, providing the customer with premium, must-have products as well as a premium experience, transforming the marketplace and expanding its direct-to-consumer footprint. This includes markets that may become developed markets in the future or were in the past. In accordance with Nike for the fiscal first three quarters of total income in emerging markets $ 3,580,000,000 estimated revenue for the fiscal year about 50 billion U.S. dollars, an annual growth of 10% would mean that by 2015, emerging markets need more than 8 billion U.S. dollars revenue. These high-performance lines are targeted at athletes. This segment reported an EBIT margin of 24.9% in Q1 of fiscal 2020. A Business Week article, entitled, “The Swoosh Index for Emerging Markets” explained it: Nike first started using Japanese plants in 1964. The brand’s product line focuses on the premium target market. The segment’s revenues have increased at a CAGR of 3.5% between fiscal 2017 and fiscal 2019. Meanwhile, Nike faces some challenges in its target markets. This is because emerging markets like India, China, and Brazil are gradually flourishing. Nike’s Jordan collection, named after basketball superstar Michael Jordan, is also a premium-label brand targeted at athletes. In the United States, economic growth rates have tapered down. To add to that, some of the countries in the region, especially Argentina, have faced currency devaluations. The stock has slid 20 percent this year, about three times more than larger competitor Nike. However, in fiscal 2018, the Men’s Training segment grew at a faster rate. We’ll look at these opportunities and their potential later in this article. In comparison, its consolidated revenues increased at a CAGR of 4.4% over this period. The westernization of emerging markets, such as China, is lifting hundreds of millions of consumers out of poverty and into the middle class. Young athletes also form part of Nike’s target market. A growing middle class has made China an attractive target market for foreign brands. Peddie will report to Elliott Hill, President of Geographies and Sales for the Nike Brand. The Converse brand comprised 5.2% of Nike’s revenues in Q1 of fiscal 2020. Nike’s fiscal year ends on May 3. The company is currently strategizing on how to widen the gap with its nearest competitors or increase the degree of separation. However, in 2017, the company realigned its reporting structure. Nike also developed various product lines endorsed by athletes such as LeBron James. Asia and Latin America are driving sales growth as economies expand in emerging markets. The brand’s margins have come down over the last five years. Nike ( NKE ) is the largest global manufacturer of athletic footwear, apparel and equipment by sales volume, and competes with Sketchers ( SKX ),. Nike’s target market is largely consumers ages 15–45. Peddie will replace Roland Wolfram who, after 16 years with Nike, has decided to retire from the company on Jan. 9, 2015. For more information, visit www.nikeinc.com and follow @Nike. As we noted previously, China is one of Nike’s key target markets due to its strong growth and high margins. The strategist and CNBC contributor was especially bullish on emerging markets and U.S. small-cap stocks, adding to holdings in those two areas. The term "frontier market" is used for developing countries with smaller, riskier, or more illiquid capital markets than "emerging". Nike has four geographical reporting segments: Apart from these geographical segments, Nike also reports two other operating segments—Global Brands Division and Converse. The company’s operations are spread around the world. Nike is one of the pioneers of the manufacturing outsourcing strategy. In fiscal 2019, the Women’s Training segment grew faster than the Men’s Training segment. Nike categorizes its revenues by geography, with the exception of its separate unit, Converse. Hurley’s target market is action sports such as surfing and skateboarding. Number of Factories grouped by Operating Region   Low income is the first important criterion because this provides an incentive for the second characteristic, which is rapid growth. The region’s percentage contribution to Nike’s top line has increased for two reasons. More than half of all Nike’s factories are concentrated in Emerging Markets. However, the company discontinued support for wearable devices last year, including Nike+ SportWatch GPS and Nike+ FuelBand. As with Nike’s other target markets, its products are seen as a premium brand in this region also. Nike is already the category leader in most markets it operates in. Greater China is Nike’s key target market. Nike's net income rose to $1 billion, or 60 cents per share, in the quarter, from $846 million, or 49 cents per share, a year earlier. Nike is not only a very popular sports brand, but it's also s a great stock. The segment’s revenue growth has stalled over the last few years. The United Kingdom, France, Germany, Austria, and Switzerland are Nike’s key target markets in Europe. NIKE, Inc. (NYSE: NKE) announced today that Tom Peddie will become VP and GM of the Emerging Markets geography. For example, between fiscal 2017 and fiscal 2020, Nike’s Greater China revenues increased at a CAGR of 13.6%. The US economy is also largely driven by its consumer sector. EMEA: Previously, Nike reported Western Europe and Central and Eastern Europe as separate segments. 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