Nike, Adidas, Li-Ning: More Exec Talk On China, Olympics
If you're watching CNBC today, you'll see my piece on the battle of shoe brands in China as the Olympics approaches. (You can also see it on CNBC.com right now or in clip below). Anyway, unfortunately there's only so much to fit in in "television time" and I had three great interviews with top executives from Nike , adidas and Li-Ning. So I thought it would only be fair if I could run the best parts of the three interviews in the blog.
Charlie Denson, Nike Brand President
DR: How big is the retail opportunity in China right now?
Denson: I don’t think anyone has seen anything like what China is today.
DR: How is the Chinese consumer different from the Western consumer?
Denson: In many ways the Chinese consumer is similar to the consumers around the world. It’s about youth, it’s about excitement, it's about passion.
DR: Adidas has paid tens of millions for the podium rights to all of the Chinese Olympic teams. Nike has decided to do deals with 22 of 28 Chinese teams so that they'll compete in Nike gear -- even though they'll be wearing adidas on the podium. Why does your strategy make more sense for your company?
Denson: Our focus has always been around the athlete and in this case, the federation or the team and supplying them with the best possible product to pursue their dreams and goals.
DR: How big is the Olympics to Nike?
Denson: The Olympics are a great point in time and the Beijing Olympics are going to transcend the world of sport. They will become a monumental event throughout the world. It represents an incredible opportunity for us as a brand to participate in the world of sport at the highest level on the biggest stage. It’s a great checkpoint for us but it’s not a destination.
DR: I can't believe how big 2004 gold medal hurdler Liu Xiang is in this country. Nike has debuted a full shoe and apparel line for him. Just how big is Liu Xiang?
Denson: When I think of Liu Xiang, I think of Michael Jordan in the mid 80s, I think of what Tiger Woods and Lebron James mean to Nike in the United States or what Ronaldinho in Europe and in the world of football (soccer).
Paul Pi, adidas vice president of marketing, Greater China
DR: How fast is China growing for you?
Pi: We have more than 3,500 shops adidas shops in China today. We had less than 100 stores eight or nine years ago. We’re growing an average of opening two shops per day. That’s a phenomenal number if you compare that to other benchmarks around the world. We’re opening at least 600 locations around the nation and we’ve been doing that for several years. So in 2010, we forecast that we’ll have well over 5,000 adidas locations in China.
DR: Why the podium rights to the Chinese National Team?
Pi: The number one icon of the Olympic games is the team itself and the presentation suit. We’re going to be the brand that’s with every Chinese athlete.
DR: A lot has been made of the counterfeit market in China. The stories you hear about product being made in factories that go out the backdoor that employees in the factory, not the brand, get a cut of. How big is the problem right now?
Pi: If you look at our high double digit growth that we've been consistently getting, there's a big consumer base that would like and want authentic product. Certainly as income rises, as education rises and as consumerism rises in china, you'll find that counterfeiting will slowly become a smaller topic.
Zhang Zhiyong, President & CEO, Li-Ning
DR: You've grown to a $400 million brand here in China as the big shoe companies have come in and taken a significant share of the market. What would you say are your advantages?
Zhiyong: We have experience in this marketplace. We've been around for 17 years. What makes us strong is three things: We know the Chinese market, we know the retailers here and we have the research and technology that enables us to cater to the Chinese consumer and their feet.
DR: How different is the foot strategy from what Nike and adidas do?
Zhiyong: They might have shoes that look like ours and every one has things like shock absorbers, but they don't have that eastern Chinese feeling to them like ours shoes have. Every person from every country has different feet and we know how to make shoes that are comfortable for the Chinese population.
DR: Nike has purchased the rights to 22 of 28 Chinese national teams for the Olympics, Adidas has bought podium rights and you have come up with the unique strategy of putting your logo on the Chinese television journalists. Why?
Zhiyong: First of all, we do sponsor the Chinese gymnastic, table tennis and diving teams and China is going to win 40 to 50 percent of their medals in those sports. With the announcer's strategy, we needed a platform for publicizing our product and journalists can give us better exposure than I can.
Questions? Comments? SportsBiz@cnbc.com