Let me be clear, I admire and really enjoy all my coworkers from India. They are so happy and super smart. But investing in India as a sports company is not the right move. They don’t really play any sports at all high level other than cricket. They aren’t represented in world cups, in Olympics, in any of the major sports, in fashion. VA talks about this being a big bet, but that’s exactly what we don’t need right now. We don’t need to bet, we know where our consumers are, let’s focus our resources in those areas and continue to expand there.
18 replies (most recent on top)
india is not a bad bet, it is a risky bet
it is a tough market to operate in with a loundry list of governance issues. ME and expanion requires extremely competent and disciplined people to lead and execute with precision which nike obviously cannot pull. The level of incompetence on display in EMEA and china proves that any ambition towards india is simply overextension.
@ax honestly very few nike customers, especially those who havent worked inside the berm or know someone whose worked inside the berm, actually recognize that mantra relative to the brand. Emblematic of the fact most of the strategy and brand positioning coming from WHQ so defiantly disconnected from global consumer base
@ca I'll take a small step further. Its a topic MF mentioned in one of the post earnings meetings. It really boils down to the PE multiple that gets assigned to a stock. If we aren't a growth company, we cannot expect a multiple that is given to a growth company. Those were MF's words.
So, the question is....what is a reasonable multiple and what does that drive from a stock price perspective.
@ac exactly. India is not a sure shot. But if it fails....NKE is really fu---d
Remember, Nike’s entire business model was started on importing shoes from Japan because both labor and product was much cheaper there.
By focusing on India, Nike is returning to its roots. Move as much work there as possible while getting rid of six-figure salaries and benefits in the U.S.
It’s diabolical while also making a certain short-term economic sense.
As an Indian American born in one of the whitest states, I can tell you that associating your brand with India is a 100% guaranteed recipe for failure. And a previously iconic sports brand no less! The arrogance and incompetence is staggering.
@OP I don’t necessarily agree with that. Do you really believe only athletes buy Nike products? Nike’s mantra has always been “If you have a body, you are an athlete”. You don’t get it,
For once, a sensible unbigoted thread out here. India is a BAD market for shoe brands. Culturally in India wearing a shoe means wearing dirty things because of all that you had to step on. It's a sign of respect to remove shoes before entering homes and temples. We have a term called "shoe/slipper" slap meaning it's even more insulting than a normal slap. Good luck convincing people in that culture to fork out tens of thousands of rupees consistently so that you can call yourself a growth company.
Isn’t that going to drop sales in all the places further?
Keep in mind both the old EM and Apla tried to grow India as the next big thing for years. It didn’t work. Good luck.
Nike has to find growth somewhere given that China has been a failure.
@a6 totally wrong way of looking at it. The 300 or 400 is averaged across 1.5B or so people. But focus on the middle class of around 300M people....find out what their income is ....you'll be surprised.
@a1 absolutely!!!! The average monthly income is 300-400 USD in India - I don’t think 100 dollar sneakers are part of the monthly budget.
All the good, intelligent and capable workers from India are already here in US. What they have there is trash. I have been working with tech engineers from India from many years to know that they su-k. The ones in WHQ are very smart and capable, but the ones still in India…
@a2 100% accurate
@a2 bingo
The marketplace push is a red herring. It’s about tech and manufacturing. When h1b costs were raised and they realized AI couldn’t save money on workforce- they ran the numbers and decided to go where the cheap labor is. The marketplace copy is just something to take the heat off what it truly is.
Nike and other companies are moving to India - new reality
It's just a way to move jobs to India so they can save on labor costs. They are packaging it as being marketplace focused to try to reduce the backlash.