Nike's new basketball shoes are accused of high prices

Forced by shrinking profits from rising raw materials, labor, and transportation costs, Nike once again offered a move to increase prices. The new basketball shoes priced more than 2,000 yuan, but also let the industry scream louder prices.

According to sources, due to increased cost pressures, Nike plans to increase its product prices by 5%-10% in the fall. The price increase will directly affect the tenth-generation LeBron basketball shoes that Nike will launch. It is reported that this section of sports shoes is expected to exceed 2,000 yuan in price. The retail price of its previous generation product is 1599 yuan. The price of more than 2,000 yuan may also become Nike's most expensive basketball shoes. In fact, a pair of Gucci men's casual shoes are priced at only 1999 yuan on some e-commerce sites. Although Nike spokesperson Mary Remuzzi has repeatedly stressed that Nike is not blindly raising prices, "We are always trying to use new innovations and product performance to achieve product upgrades." However, the above statement is not recognized by the industry.

Persons familiar with the sports market said that Nike had already planned ahead in order to smoothly raise prices. During the London Olympics, domestic sports brands such as Anta, Li Ning, and 361° took advantage of marketing. Nike was unconventional in the Chinese market. It only maintained ordinary promotional efforts and did not exert excessive force. Nearly half a month, Nike's many series of stars collectively to the Chinese market. This is a round of concentrated rally before Nike's brewing of prices, in order to grab prices before the domestic brands, and stabilize market share.

However, Nike prices have not yet affected the Beijing market. Yesterday, the relevant person in charge of Anzhen Hualian Nike counter stated that he has not received a notification about the price increase of Nike. Recently, Nike has more than one price increase. In March last year, Nike had said that in the spring, footwear and apparel products will begin to raise prices globally to cope with rising oil, cotton, and transportation costs.

With the substantial increase in the cost of raw materials and labor, Nike’s rising costs for raw materials and transportation in the past two years have put pressure on its profit growth. Its latest financial report shows that Nike's gross profit margin as of May 31st fell from 44.3% to 42.8%, which is the sixth consecutive year of decline. As the largest Chinese market for Nike’s second largest market, sales revenue also declined during the quarter. Total sales revenue for products including footwear, clothing, and accessories was US$667 million, a 3.89-point drop from the third quarter. %.

Nike's old rival Adidas has a hard time. A month ago, Adidas stated that it would close its own factory in China and that it would release contracting agreements with some of its foundries from October to April next year. In fact, Adidas was not the first to withdraw. As early as 2009, Nike had also closed its direct factory in China, and later moved its production base to a lower-cost Southeast Asian region. Many people in the industry stated that Adidas will also cooperate with Southeast Asian manufacturers in order to ease the operational pressure brought about by labor costs.