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Nike leaning towards Gen Z China consumers after Covid restrictions are lifted

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Nike leaning towards Gen Z China consumers after Covid restrictions are lifted

Image source: Fast Company

Nike: Gen Z, also known as the “digital natives,” are the youngest consumers in the market, born between 1997 and 2012.

They are the first generation to grow up with technology as a fundamental part of their daily lives, dramatically influencing consumer behavior.

Gen Z has a strong sense of individuality and values authenticity and transparency, and they are known for their savvy when it comes to technology, social media, and e-commerce.

They are also more diverse and socially conscious than previous generations.

As a result, businesses and marketers have had to adapt their strategies to better appeal to this demographic.

John Donahoe, the CEO of Nike, recently said that the company is focusing on Gen Z consumers, particularly in China.

Nike & Gen Z

Nike, one of the world’s leading sportswear brands, has had to adapt its strategies to appeal to Gen Z consumers.

As a demographic, Gen Z is known for its strong sense of individuality and values authenticity and transparency.

They also have a keen interest in sustainability and social responsibility, leading many to prioritize purchasing from socially responsible companies.

Appealing to a generation

To appeal to Gen Z consumers, Nike has focused on building sustainable and transparent supply chains and has actively promoted social issues such as diversity and inclusion.

The company has also focused on creating customizable products that allow consumers to express their individuality.

One example is the Nike By You program, which allows customers to design their own sneakers using a wide range of colors and materials.

Social media use

In addition, Nike has also been investing in digital marketing and e-commerce to reach Gen Z consumers, who are known for their tech-savvy and heavy use of social media.

The company has also been active on social media platforms such as Instagram and

TikTok is where it has been able to connect with Gen Z consumers and showcase its products and brand message.

Overall, Nike has successfully appealed to Gen Z consumers by prioritizing sustainability, inclusivity, and personalization in its products and marketing.

And by having a robust online presence and leveraging digital marketing, the company has effectively reached and connected with this demographic.

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China consumers

On Thursday, John Donahoe described how the athletic apparel retailer continues to experience strong demand in China amid Covid disruptions.

“We’re still the number one cool and favorite brand in Shanghai and in Beijing,” said Donahoe.

“We’re really focused on the Gen Z consumer in China, we saw a very good response from the Gen Z consumer who wants the most innovative products and wants brands that are globally relevant.”

“We saw good response in Q2, and we have the same focus and outlook going forward.”

Revenue

China’s “zero Covid policy” was still up when Nike’s fiscal second quarter concluded on November 30.

1,500 Nike stores across the country were shut down, causing a 3% sales drop.

The company’s revenue in China was down by 22% in the same quarter period in 2021 when Covid disruptions were more stable.

While John Donahoe didn’t address how spending ramped up since the country lifted its zero Covid policy, he asserted that the company is confident China is still a strong market.

“We factored in some disruption in our outlook, but we view that as transitory, we still believe in the fundamentals of China,” he said.

“We invested in building hyperlocal products where we take an iconic franchise like Air Force One, or Dunk, and we localize it so it’s relevant for the Chinese consumer – and the Chinese consumer really responded to that.”

Inventory

For the past few quarters, Nike has struggled with inventory, but Donahoe assured people that the problem was happening in North America.

In addition, he said the company is working on hitting levels normalized in May.

“The consumer is still paying list price for the Nike products that they know and love,” said Donahoe.

“In the areas where we have excess inventory, which is primarily in North America, we are working through it. We’re discounting and working through it.”

Nike has been moving away from wholesalers to try a direct-to-consumer strategy.

However, during the recent fiscal quarter, whole revenue jumped 19% due to the company’s inventory availability to sell to partners.

Although the company invested in its new strategy, Donahoe said wholesalers are still crucial to Nike.

“Consumers in this day and age want to get what they want, when they want it, how they want it, and in our industry, they’ve been very clear they want a premium and consistent shopping experience regardless of channel,” said Donahoe.

Reference:

Nike CEO touts strength in Gen Z China shopper as Covid disruptions dent regional sales

Scarlet Logan is a marketing professional who loves writing. She graduated with a double major in journalism and economics.

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