Nike entered China in the early 1980s by relocating its manufacturing facilities from South Korea and Taiwan. However, Nike was not content solely producing its goods in the Middle Kingdom. The company set out to sell to China’s “2 billion feet” as Nike founder Phil Knight put it. Unfortunately, Nike experienced challenging times trying to convince Chinese consumers to purchase its premium athletic shoes in a culture where historically education is number one, and not much emphasis is placed on athletics. To create a market, Nike partnered with local schools, funded Shanghai’s first high school basketball league called the Nike League, and sponsored basketball tournaments in cities across the country. After 26 years operating in China, Nike finally recorded $1 billion in revenue, and by 2010 this figure had doubled to 2.06 billion. Now with over 30 years of operating experience on the ground, the Nike marketing machine continues to thrive in China where it plans to double its sales by 2015.
Through successful sponsorship of prominent athletes in China, like Olympic gold-medalist Liu Xiang and famous NBA stars, the Nike brand appealed to the male demographic in China. However, Nike aimed to further open the market for women’s athletic shoes and apparel.
Nike created a commercial featuring tennis stars Maria Sharapova and Li Na. During the commercial Nike had the two professional female athletes share their dreams, and what they were willing to do to achieve them. Nike then partnered with Chinese online video portal Tudou to create a specialized campaign bringing together 50 female college students to create original video segments to share their own dreams. During the video segments the young women shared their goals of becoming professional basketball stars, yoga instructors, dancers – all while wearing the latest Nike sneakers and athletic apparel.
The “Fuel for Dreams” campaign successfully raised Nike’s profile among the young female demographic. The Nike Women page on Tudou received over two million page views from over one million unique visitors. More importantly the page received nearly 700,000 comments full of valuable consumer insights. The partnership with Tudou enabled Nike to reach its target demographic by hosting its content in an online environment where they were already comfortable.
The China Observer View:
Companies expanding into China for the first time (or entering third and fourth tier cities for the first time) often find themselves creating markets for products that never before existed. In such situations education is essential to create a need in the marketplace. China has a vibrant online community where netizens engage in rich dialogue on message boards, micro-blogs and on social platforms like Tudou. This presents a unique opportunity for marketers to take part in a two-way exchange about the wants and needs of their customers. Structuring a campaign like Nike’s will not only lead to increased brand recognition in the short-term, but allow companies an additional channel to collect valuable product feedback to fuel innovation over the long-term.