Why NIKE, Inc. (NKE) Fielded Kobe as China Second-Stringer

Shanghai Nike campus

NIKE, Inc. (NYSE:NKE), on the other hand, broke ground last July for a 600,000-square-foot campus in Shanghai for its Greater China headquarters, in support of its long-term strategy in the country. It also opened this January its first Nike Action Sports in China at Beijing’s Xidan district, a hotbed for local skateboarding which is a growing sports subculture in China.

In the foreseeable future, what Adidas can hope to achieve is eat more into the market share of another Germany-based company, Puma SE, acknowledged as a distant third among foreign sports gear manufacturers in China. Notably, Puma which had 2012 fourth quarter net sales 246.7 of million euros for the Asia/Pacific region, like Adidas has shifted its marketing strategy on having its products sold more as fashion labels and less as sports brands.

Buy tag sticks

Hence, even with Kobe demoted as a benchwarmer in Nike’s China marketing campaigns, expect the company to successfully deflect Adidas’s efforts to gain inroads on the Swoosh label. This success will not only help enable Nike meet its double-digit revenue growth rate guidance for the 2013 third quarter due for release late this March.

More gains can also be seen moving forward as NIKE, Inc. (NYSE:NKE), which posted fiscal 2012 revenue of $25.3 billion, has a firmer and sharper focus on the market for sports performance products. This, coupled with the company’s continued product innovation, should even make stronger the buy tag that stock analysts recently pinned on the Nike jersey

The article Why Nike Fielded Kobe as China Second-Stringer originally appeared on Fool.com and is written by Arturo Cuevas.

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