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Submitted by Daren Puente
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Almost half the world-wide market for athletic shoes is right here in the US. Thanks to an aggressive marketing plan and succession of shrewd endorsements, it has been dominated by the Nike “swoosh”. In a business saturated with players, Nike’s 36% market share represents a substantial margin over the competition.
How much is 36% of the market? Only sales in the neighborhood of $7.2 billion, that’s all. Enough cash to buy every franchise in the NBA. Isn’t it just a little ironic a company that propelled it’s period of rapid growth on a product launch and endorsement campaign grounded on the NBA’s brightest star, could on a whim, buy the whole league?
Not everything is rosy for Nike in the athlete’s foot market. Of the 50 or so “other manufacturers”, number two Adidas has completed a move to present a major challenge.
Athletic footwear is divided into two sectors. Competitive which drives innovation to set the mainframe, and fashion which spins casual wear market entries off from the mainframe. Around the rest of the world, Adidas has long been the leader in competitive footwear. It was Adidas that really started it all, sneaking their 3 stripe trademark past stringent Olympic and World Cup sponsorship regulations of the 1950’s to give birth to a whole new industry
Adidas has acquired number 3 Reebok for $3.8 billion, giving them a 21 percent US market share. Most significant about this deal is Reebok holds a much firmer grip on the fashion market than Adidas ever has. Each brand will keep it’s identity, but expect to see some new forms cross brand marketing invented to capitalize on the strenghts of each. The Reebok brand blended into the Adidas mix means a savvy competitor for Nike to deal with across the full market range. Expect Nike to dig deep and find creative ways to fight them off.
The big business of whose sport shoe they put on their feet assures consumers a new round of innovative choices will be soon on the way.
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