Nike puts a better foot forward in China

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People walk past a Nike store in a shopping district following an outbreak of the coronavirus disease (COVID-19) in Beijing, China, April 5, 2021. REUTERS/Thomas Peter

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HONG KONG, June 22 (Reuters Breakingviews) - Nike’s (NKE.N) China bulls can let out a sigh of relief. The sneaker-maker has had a tough run, with revenue in Greater China for the nine months to the end of February falling 11%. But online sales during this year’s “618” festival - the annual shopping extravaganza during the first 18 days of June - brought in 570 million yuan ($85 million), a whopping 171% increase compared to last year. That even beats local competitors such as Li Ning (2331.HK) and Xtep (1368.HK).

The $171 billion sportswear giant run by John Donahoe has been beset by a number of hurdles, not least Covid-19 lockdowns, political and consumer backlash due to the Xinjiang cotton controversy read more and local competitors vying for market share. Now it’s prioritising local consumers by offering China-specific platforms read more and partnering with Hong Kong-listed Topsports (6110.HK) and Pou Sheng (3813.HK), two of the biggest domestic sports retailers in Mainland China.

Nike estimates the country’s market for its gear could grow to 500 million people, 10 times that of North America. That’s a big if, but the Swoosh deserves to celebrate its smaller victories. (By Thomas Shum)

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Editing by Antony Currie and Pranav Kiran

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