Interview with Nike Brand President Charlie Denson
The Chinese have done really well in this Olympics. That's as important for you here as the U.S. athletes do back home.
Denson: Absolutely. I mean, the Chinese Olympic team is the story here in China ... being part of that opportunity and sponsoring 22 of the 28 federations has been a great game so far.
Adidas' strategy was sponsoring the Beijing Organizing Committee, getting that so when the Chinese athletes are on the podium, they have the China team. But you have the USOC, the United States team, and a lot of people think you're sponsoring Michael Phelps because every time he gets to the podium and his gold medal, Nike's on his sweatsuit. Tell me about why your strategy was the right one for Nike .
Denson: Well I think for us, first of all, it always starts with the athletes. I think one of the things we've always stayed focused on is the athlete themselves and supporting their performance. The opportunity to work with the USOC has been a great opportunity for us as a brand, and certainly Michael's performance here in Beijing didn't hurt us any either.
Liu Xiang, obviously a tremendous story here. It's really hard to tell the people back home how big it is. Of course, the hurdler, China's biggest hope to win a track and field gold. You guys spent a lot of money on him. He's a big bet for Nike here. What was it like, how much did you know about his condition? Because everything is so secretive.
Denson: Actually, it was as big a surprise to us as it was to everybody else when he opened up here the other night. And, you know, it's a tragic performance for him because he's put his whole life into this. But that's sports. And the emotion of sport, and it just doesn't always go by the script that everybody wants to write. So, knowing him personally a little bit, knowing what kind of person he is, he's going to come back stronger than ever off of this, and he'll be a big part of our future as well here in China.
Overall growth in China, is it true, a store a day?
Denson: Actually, it may be a couple stores a day.
Opening this year?
Are you moving west? Where's the sweet spot and how much money do these consumers have to spend on clothes?
Denson: The primary focus where we've built the marketplace up has been the bigger cities, but we're now starting to move into the tier two and tier three cities. So we still feel very positive about the growth in both the near and long term future. And the Chinese consumer and our connection with them has been great so far. We think that our relationships here with the Chinese federations at the games is really just a launching pad for the next phase of growth here in China.
Herbert Hainer came on the show, the Adidas CEO, and he said they were #1 in China. I had never seen that statistic before. Where do you guys fall on that?
Denson: Well, we actually are now doing well over $1 billion here in China. We exceeded that target ahead of time. We are the number one brand here in China. All of our figures show we are at least 30 percent separated from our nearest competitor. And we've been in this marketplace a long time. We started here in 1980. We know the market very well. We are very connected to the consumer and we really feel good about our number one position here in China.
How big is Kobe? We keep seeing these stories. He was at the basketball game after the US team played, and he comes on the screen, and they were cheering maybe as loud as if it were Yao Ming. How big is he? You chose him to be the face of the Hyperdunk shoe, which you launched at the Olympics. Can you tell me how big of an international star he is?
Denson: This is no surprise to us. Kobe has put in a lot of time nurturing his profile here in China. And as one of the best basketball players in the world, his profile here is very high. This marketplace is a basketball hotbed. There's a huge fan base here. There is an estimated 300 million kids that play basketball here in China. Our basketball business and being the number one brand in basketball here in China provides us with a great platform working with Kobe and the new Hyperdunk launch. So it's not a big surprise to us. To his credit, he's put a lot of work in here, as has LeBron. And between the two of them, we really like our position here in China with basketball.
The name Li-Ning is not well-known in the United States, but it's becoming better known. His logo bears a striking resemblance to yours. His slogan, anything is possible, reads a little like "Just Do It." Do you care? Are there copyright concerns?
Denson: I would say when we work here in China, we're very conscious of the counterfeiting issues we do encounter. It's something we have a high sensitivity towards. I think from a competitive standpoint, we like this marketplace, we feel very confident in this marketplace. We don't spend too much time worrying about the competition from that perspective.
Have to mention Usain Bolt because he's the track star of these games. Nike is good because the executives, people like you, sometimes take things personally because he's in Puma's. How much does that rile you up a little bit?
Denson: Well, I always take those things personally. But I think for us we've had a great games so far. And you know, you can't win them all, as they say. But right now with the performances of the Chinese Olympic team and what effect they have on the China market, the performances of the U.S. Olympic team and everything that's gone on in that regard back in the USA, and our affiliations with the relationships with the athletes all over the world, this is the best Olympic games Nike has ever had. And that's by a considerable amount. So for us, it's been a great, great experience.
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