Nike vs. Adidas

Related Visual Stories Who Owns Adidas Adidas is a German multinational best known as a designer and manufacturer of sportswear and related accessories. It was founded in 1924 in the Bavarian town of Herzogenaurach, Germany, and did not take on the Adidas name until 1949. The new company, known today as Adidas AG, is the holding company for the Adidas Group and the sole owner of Adidas. Some of the company’s largest shareholders include: Groupe Bruxelles Lambert SA (7.6%), Nassef Sawiris (3.3%), and Norges Bank Investment Management (2.8%). Adidas Revenue Revenue in 2019 was $23.64 billion. Revenue in 2020 decreased to $18.43 billion. Revenue increased in 2021 to $21.23 billion and further increased in 2022 to $22.51 billion. Adidas Profits Net income in 2019 was $1.97 billion. Net income in 2020 dropped to $432 million. Net income in 2021 increased to $2.11 billion but decreased in 2022 to $612 million. Adidas Revenue Breakdown In 2019, Footwear, Apparel, and Accessories and Gear had revenues of $13.52 billion, $8.96 billion, and $1.15 billion, respectively. In 2020, Footwear revenue decreased to $10.13 billion, Apparel to $7.31 billion, and Accessories and Gear to $0.991 billion. Revenues in 2021 increased for Footwear ($11.33 billion), Apparel ($8.71 billion), and Accessories and Gear ($1.19 billion). In 2022, Footwear revenue grew to $12.4 billion, Apparel remained relatively stable at $8.7 billion, and Accessories and Gear increased to $1.49 billion. Between 2019 and 2022, Footwear consistently generated the most revenue, followed by Apparel and then Accessories and Gear. Adidas Distribution Strategy In 2022, E-Commerce (Direct-to-Consumer) contributed to 20% of total revenue. Own Retail (Direct-to-Consumer) accounted for 19% of total revenue in 2022. Wholesale made up the majority of revenue in 2022, at 61%. Adidas Employees In 2022, the company had 31,477 employees in own retail. Sales function comprised 3,112 employees in 2022. There were 8,254 employees in the logistics department in 2022. Marketing had 4,685 employees in 2022. Central Administration, Production, R&D, and IT had 5,161, 558, 1,031, and 4,980 employees, respectively, in 2022. Adidas Production In terms of Footwear production, 34% came from Indonesia, 32% from Cambodia, 16% from Vietnam, and 18% from China. Apparel production was distributed as follows: 22% from Indonesia, 17% from Cambodia, 44% from Vietnam, and 17% from China. For Accessories & Gear production, Vietnam contributed 28%, Turkey 26%, Pakistan 25%, and 21% came from other countries. Adidas Revenue By Geography In 2022, EMEA (Europe, Middle East, and Africa) generated €8.55 billion in revenue. North America contributed €6.4 billion in revenue in 2022. Greater China, Asia-Pacific, and Latin America had revenues of €3.18 billion, €2.24 billion, and €2.11 billion, respectively, in 2022. Nike Business Model Nike follows a wholesale strategy combined with a very strong direct distribution. The company makes money primarily from footwear. As of 2022, over 62% of revenues came from footwear and 29% from apparel. The most successful Nike brand is the Jordan Brand, which in 2022 generated $5.2 billion in revenue. Nike is the master of demand creation and generation through its influencer campaigns, where athletes become an inspiration for everyday people. Nike Strategy Nike leverages both a wholesale and direct distribution strategy. Indeed, while still in 2022, most sales come from wholesale distribution, in reality, since 2020, Nike has been ramping up its direct distribution through its NIKE stores and e-commerce platform (SNKRS). Nike Revenue Nike generated most of its revenue from footwear. Indeed, in 2022, Nike generated over $29 billion in revenue from footwear, over $13.5 billion in apparel, $2.35 billion in equipment, and over $1.6 billion from the Converse brand. Nike Financials Nike generated over $47.7 billion in revenue and over $6 billion in net profits in 2022, compared to over $44.5 billion in revenue and almost $5.8 billion in 2021. Nike Mission Statement Nike's vision is "To bring inspiration and innovation to every athlete in the world." At the same time, its mission statement is to "do everything possible to expand human potential. We do that by creating groundbreaking sports innovations, by making our products more sustainably, by building a creative and diverse global team, and by making a positive impact in communities where we live and work." Nike SWOT Analysis Nike Competitors Jordan Business Model Jordan follows a demand generation business model, where its iconic brand works as a propeller for the sale of its footwear and apparel, that in 2022 generated more than $5 billion in revenue for Nike or more than 10% of its total revenue. Converse Business Model Converse is an independent brand part of Nike's family of brands. Indeed, Converse generated $2.35 billion in revenue in 2022. And like Nike, it follows an heave Wholesale distribution strategy, where most of its sales are made, through footwear. However, Converse follows also a direct distribution approach where it sells directly via its monobrand stores.

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Gennaro Cuofano