Nike Layoffs In India 20% Employees Were Dismissed

American sports brand Nike

It is plunged into many difficulties, such as declining performance, falling share prices and layoffs.

According to the world clothing and shoe net, Nike announced that it began mass layoffs in India, and 20% of its employees would be dismissed.

Nike said this is part of its global restructuring process. The future group will focus on 12 major cities, including New York, Shanghai, London, Tokyo, Paris and Mexico.

This is not the first layoffs for Nike this year. In June of this year, Nike announced the restructuring of the group structure, which will reduce 2% employees by 1400. The regional structure was simplified from the original 6 to 4 departments, namely North America, Europe, Middle East and Africa (EMEA), Greater China, and Asia Pacific and Latin America (APLA). Each division has only one vice president to reduce the number of vice presidents.

Nike entered India in 2005, but has been unable to adapt to local conditions.

It has closed its 35% stores in India.

Later, in order to save costs,

Also quit the cricket tournament sponsorship.

Data showed that sales of Nike in India last year plummeted from 8 billion 30 million rupees last year to 7 billion 640 million rupees (about 777 million yuan).

At the same time, the performance deficit continued to expand, from 1 billion 10 million to 2014 in fiscal year 1 billion 10 million (103 million yuan) to 2015 to 2016 fiscal year 1 billion 700 million rupees (about 173 million yuan).

Some analysts believe that the Nike performance continued to decline, the brand status is worrying, however, the India market is obviously not the only market blocked by Nike.

According to the latest financial year data of Nike group, as the most important market of Nike, sales in North America increased by 3% to 15 billion 216 million dollars compared with the previous fiscal year, while the sales of basketball sports shoes, which was once the trump card of Nike, dropped 6% to 1 billion 290 million US dollars. After selling Gore ball business, the sales volume dropped by 18% to 579 million US dollars, and the football category department also recorded a negative growth.

In the 12 months ended May 31st, Nike Group sales grew 6% to 34 billion 400 million US dollars, net profit rose 13% to 4 billion 200 million US dollars, Nike brand sales increased 8% to 32 billion 200 million US dollars, gross profit margin further dropped 160 percentage points to 44.6%.

Obviously, the growth rate of Nike brand has lagged behind the growth rate of the group.

Now, the rival of Nike is aggressive. Over the past year, the Nike market share has been constantly attacked by Adidas, the German sports brand. Although the latter has a certain distance from Nike, its rapid growth can not be ignored by the market, and it is also a great pressure on Nike.

According to the latest statistics from YAHOO financial, Adidas's share in the American sports shoes market increased from 6.3% in May to 11.3% in May 2017, while Nike's market share decreased from 35.9% last year to 34.7%.

In April, Adidas's share of the American sports shoes market recorded a record 13%, exceeding Jordan Brand for the first time.

Data also showed that the number of sports shoes sales in Nike had dropped by a single digit in May, while the sales volume of Adidas jumped 74%.

Nike's sneakers are slowly cooling down when Addias's three classic sneakers are becoming more popular.

In terms of group asset restructuring and business innovation, Adidas's rapid response has to be achieved.

In May, in order to concentrate more on its business, Adidas sold 3 golf brands such as TaylorMade, Adams and Ashworth.

At the end of July, it sold its CCM Hockey ice hockey equipment business to the Canadian private equity fund Birch Hill Equity Partners at a price of US $110 million.

In innovative business, Addias continues to accelerate its pace, and Speedfactory, an intelligent plant located in Germany and the United States, has already been put into operation.

John-PaulO Meara, vice president of Addias business development, told reporters that building intelligent factories is a way to explore new technologies, to get closer to consumers, and to create more jobs for the local community, and this is also a long-term goal.

In addition, it is reported that Addias plans to test its water with its leisure fashion brand NEO, breaking the industry standard for new products within 12 to 18 months, and shortening it to 45 days.

In the face of continued pressure from competitors, Nike may need to respond more quickly and effectively.

Recently, the Group officially announced that it will be stationed in the Amazon platform to better handle the brand's unsalable inventory and discount products.

At present, Nike has chosen to enter Tmall mall in Alibaba in China. In Europe, it chose Germany's largest e-commerce platform Zalando, plus brand self run official website. Nike's total electricity business annual sales volume has reached 2 billion US dollars.

Goldman Sachs analysts said that if Nike can sell directly on Amazon, annual sales are expected to increase by 300 million to 500 million U.S. dollars. However, in the Nike and Amazon cooperation, Amazon needs to develop more stringent anti counterfeit measures and control the number of similar dealers on the website. Nike hopes to improve Amazon's experience of improving consumers, and will continuously evaluate the role of Amazon platform.

To better integrate into social media, Nike also plans to sell products directly through Instagram.

In addition, Nike plans to stimulate profitability of the group by streamlining products and shortening the production cycle. Nike will reduce its footwear style by 25%, focusing on ZoomX, Air VaporMax and Nike React. With the help of technological innovation such as intelligent production and 3D printing, the production cycle of Nike is expected to be shortened from 4 months to 18 months.

According to Morgan Stanley, in today's highly competitive market environment, Nike, as a leader in the industry, must become faster and more flexible and need to improve its competitiveness in the digital market, because the future of sports products will be in the hands of consumers.

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