Nike, which has long been at the top of the sportswear industry, has been hit by “quality problems”.
Zion Williamson was injured in a fall after his Nike PG2.5 basketball shoe burst in less than a minute on Thursday, raising questions about the quality of Nike’s products and triggering a drop in the group’s share price that wiped $1.3 billion off its market value. More importantly, spike lee and barack Obama were among the guests at the event, which was seen as a “great shame” in the history of the Nike brand and caused widespread controversy in the industry.
Nike may be held responsible for the incident, said Peter adelstein, a lawyer in New York who specializes in sports-injury litigation.
Nathario, an American branding expert, thinks Nike should sign a long-term deal with Zion Williamson. The “boot issue” is a rare but dubious moment for consumers, and Nike’s sponsorship and launch of better basketball shoes with Zion Williamson could help turn that around.
However, some analysts pointed out that Nike’s leading position in the basketball world is difficult to be shaken by a single incident. On the contrary, Nike’s stock price decline is a good opportunity for investors to buy. “Nike will probably be under a lot of pressure in the next few days, but I don’t think it’s going to directly affect shoe sales,” said gulazutis, an analyst at bloomberg.
According to fashion business express, Nike’s basketball revenue reached $4.35 billion in 2018, accounting for 14% of the total revenue. Nike and Jordan accounted for more than 90% of the basketball market in the United States.
Nike has not officially commented on the incident, but the PG 2.5 basketball shoes are now on sale at a discount on Nike’s U.S. website. The red shoes have been reduced from $110 to $92.97 and the blue shoes to $104.97.
It’s worth noting that PG 2.5 isn’t the only product Nike has had problems with lately. According to Business Insider, Nike’s new $350 smart sneaker, the Nike Adapt BB, is affecting its ability to automatically tie its shoes because it doesn’t match the android APP. Nike said it has started debugging the APP and will fix the problem as soon as possible.
Earlier, Nike released a limited edition of a pair of Nike basketball shoes worn by NBA star kobe Bryant when he won the 2008 Beijing Olympic Games in April 2016, which was exposed by some Chinese consumers, claiming that the shoes did not explain the said heel with Nike patented zoom air cushion, which was questioned by consumers as “false propaganda”. Nike responded by saying that the product description was incorrect and that a full refund was available. In 2011, Chinese consumers discovered that Nike’s “Hyperdunk 2011” basketball shoes, which are sold in China, lack air cushioning on the front soles compared with the Nike logo in the U.S.
Similar incidents and the same cold treatment are basically caused by Nike’s inability to afford the negative effects caused by a small mistake in the increasingly fierce competition in the sports industry and the increasingly saturated leisure sports shoes market, especially when the north American market is finally significantly improved.
In its fiscal second quarter ended Nov. 30, 2018, Nike group sales surged 10 percent from a year earlier to $9.4 billion, well above analysts’ expectations of 7 percent, according to fashionheadline. During the same period, North America remained Nike’s largest consumer market for footwear and footwear, with revenue growth of 8% and footwear and apparel sales growth of more than 20% year-on-year.
Industry insiders point out that basketball shoes already jump can only on the basketball court in restrictions has become a daily collocation sheet is tasted, can appear even in the workplace, the field containing the unlimited business opportunities, but after 60 years of development, the United States basketball market is already saturated and into the recession, so Nike is turning to the Chinese market.
Last August, Nike group formally announced to commit his future to 10 years, the Chinese men and women’s basketball team international future cooperation between the two sides will cover include the three basketball World Cup and so on many important international competition, speed up the exploration of the Chinese basketball market, at the same time to invite foreign coaches to China to teach a more scientific way of training, further deepening youth talents cultivation areas.
Last April, Nike introduced “Champion Think 16” series of 16 pairs of classic basketball shoes, including 14 pairs of commemorative models, representing the classic moments in the championship history of 14 NBA players including kobe Bryant, James James, durant, Dr. J and ray Allen, and two pairs of special commemorative shoes respectively representing the glory of the championship Air Force 270 “Gold Standard”. To keep things fresh, Nike teamed up with SONY corp. to launch a PlayStation basketball shoe.
A number of reports show that what affects consumers to buy products is not only the product itself, but also the trust relationship between the brand and consumers. However, the current brand often only sees the superficial marketing promotion, and the quality is the core element to attract consumers to buy for a long time.
Some analysts believe that after the “shoe incident”, Nike and other brands should reflect on the fact that the former football star Jordan still flew around the court in his Jordan basketball shoes, while the current Zion Williamson was unable to continue his basketball career because of the quality problem of Nike’s basketball shoes.