Nike chief financial officer Don Blair describes how Nike will grow in China

Nike chief financial officer Don Blair describes how Nike will grow in China

With $36 billion on the 2017 horizon, quadruple growth projected in e-commerce and a raft of new running and apparel products in the hopper, there has been little not to like — if you’re a Nike investor — at the Nike Investor Day event Wednesday.


Revenue from China, as Nike executives have explained in the past few quarters, is not meeting expectations. The Greater China geography revenue target projected two years ago at the same conference — $4 billion by fiscal year 2015 — will not be met. Nike is projected flat growth for the upcoming year in the world’s second largest economy.

Nike is recalibrating its approach to consumers in the country and has a plan on how to reignite what once was double-digit growth, Nike executives told about 80 investors and stock analysts at the session held in the Tiger Woods Center on the World Headquarters campus near Beaverton.

In a separate interview with The Oregonian, Nike chief financial officer Don Blair rejected the idea that the company had miscalculated in China.

“We set ourselves a goal and we won’t make the goal on the original timetable,” Blair said, during a break between presentations. “But we’re absolutely confident we will make the goal in time.

“And markets evolve. If we could draw straight lines on every market and just have everything go up forever, then we could probably be replaced by spread sheets.

“But the world in (Nike’s market of) 190 countries and in 8 (product) categories and all the products (and) types is a portfolio. And sometimes…they move at different speeds.

“In China, we have a market that’s evolving, the consumers expectations are changing and we’re evolving our business. We’ve had a period and we will have some time on resetting our revenues. We’ve said this year we’ll be flat but we’re absolutely convinced we will grow again in China and we’ll grow at an accelerated rate.”

In another presentation, Elliott Hill, vice president and general manager of global categories, described Nike’s efforts to understand and differentiate not only specific cities in China, but particular neighborhoods as well.

Blair said this approach has been used in North America and has helped the company continue its growth in the United States and Canada.

“The more we increase the resolution and get closer and closer to the consumer and get closer to what the consumer is looking for,” Blair said, “whether it be taking our broad business and clicking it down to sports categories, or taking a city like Shanghai and clicking it down to individual neighborhoods, when you look at the market at that level of resolution, you see lots of opportunities.

“Nike is the largest brand in running but when you click down to all those subsets, and all those consumers — men, women, kids, west coast, east coast, LA, which neighborhood in LA — you see places where we’re not fully penetrated. And that visibility into the details of the business is what’s driving growth along many dimensions.

“So in China, I would say it’s probably within the last 18 months that we’ve been getting that granularity and I think in China that’s what’s to reaccelerate the growth there.”

— Allan Brettman