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Nike vs Adidas

Nike, Adidas, sportsWorldwide, Nike may be the leader in the sport shoes industry but in the Middle East, Adidas has been leading the race for years and intends to keep things that way. The West’s demographic is growing older by the day, but the Arab world enjoys a tremendous birth rate and a massive population of under-25s, a significant sales target for sneaker retailers.

Be there or be square

Adidas is a huge step ahead of Nike in the Middle East - helped largely by the fact the German brand is actually in the region, with headquarters in Dubai handling its emerging markets territory. Without any corporate presence in the Arab world, Nike may seem surprisingly disconnected from this promising market. This difference in strategy goes beyond offices: in 2004, Adidas added a large factory outlet/concept store in Abu Dhabi to its two brand stores and one factory outlet in the UAE; in 2007, it opened in Dubai its first Originals store in the region.

“Single-brand stores are special to emerging markets mainly because in places like Europe for example, you have a well developed infrastructure with multi-branded retailers. You don’t have that in emerging markets so we have started to build a mono-brand infrastructure,” says Herbert Hainer, Adidas chairman and CEO, who expects to double the number of his retail stores in the region to 18 and triple the number of mono-brand franchise stores to 27 by 2008.

Nike products, on the other hand, are only available through distributor Sun and Sand Sports and other multibrand outlets. Hainer’s strategy proved efficient till now: Adidas posted a 200 percent growth in the UAE, 300 percent in the KSA and 150 percent in the GCC as a whole between 2002 and 2006.

Ball games

For years, Nike has essentially been associated with basketball and, more specifically, with the NBA stars. While seductive in the West, basketball sponsoring and endorsements are not a strong communication and marketing tool in an Arab world much more interested in football. In that regard, Adidas’ long lasting love story with the beautiful game, and even more so with the FIFA (Adidas has the rights for the World Cup until 2014 for around $100 million for each four year period), has probably helped the three stripes brand to increase awareness.

Recently, Nike has sensibly shifted its marketing approach from basketball to soccer, providing apparel to Manchester United, using Brazilian star Ronaldo in ads and even dealing a severe blow to the three stripes contender by recently stealing away from it the French team apparel providing deal for a historical 42.6 million euros. At the same time, Adidas has turned to basketball. In 2006 the German brand inked an 11-year global merchandising partnership with the NBA.

But from a closer perspective, Adidas keeps the upper hand in the region, first by making a strong point using boxing celebrity Muhammad Ali, both a successful sportsman and famous Muslim, and second by actively supporting local teams such as Al Hilal, Riyadh’s foremost football club since 2005 (and introducing a special range of branded apparel). More recently it has worked with Abu Dhabi’s Al Wahda FC and Al-Jazeera Club. The brand has also sponsored the Dubai Football Challenge in 2007 and collaborated with local talents such as UAE footballer Ismail Mattar in 2004 (even if he hasn’t been used for campaigns outside the country).

“We want to endorse local players because even if they’re not a strong global symbol, we want to show that we are a brand that respects local values, so it’s important to incorporate local symbols,” says Eduard Massier, business development and marketing director at Adidas Emerging Markets.

Pampering consumers

Having understood that Arab people love personal attention, Adidas increasingly engages its customer base in interactive campaigns. These include the 2007 ‘Together we are Basketball’ and ‘Predator vs F50′, and 2008 ‘Reason to Run’ campaigns, and personalized offers: ‘mi adidas’, a 30 minute high-tech process, during which experts take customers through fitness, performance and design phases, or ‘Test Run 28′, allowing customers to try out a new pair of adiStar, Supernova or Response running shoes over 28 days.

The launch by Nike of Joga (a social network site for fans and players available in 140 countries and 14 languages, in partnership with Google) is indeed ambitious, similarly to Nike+, an interface with the iPod Nano allowing to download running data.

But despite retail opportunities too attractive to ignore anymore, competitor Nike seems stuck with a global but too distant image compared to hyperactive and consumer-driven Adidas.

 
 

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