If you are a frequent traveller and you know the importance of good footwear in your life, you will relate to this article and you would want to come to a conclusion in the end. When you think of sneakers for a trip, I am sure the obvious brands that come to your mind are Adidas and Nike. The Nike vs Adidas debate has been going on for a while now. Let’s put some light on the Adidas and Nike businesses and see who actually surpasses the other in terms of various aspects of performance.
Both of them are renowned brands and are the best at what they do. Nike has always been the king of sportswear and sneakers. But, there has been a change in this scenario recently. Let’s dive deep into it and see what changed, our minds or the quality of these brands? And at the end of this Adidas vs Nike battle, who will reign supreme?
Everyone has a past! These brands too had a starting point. The point where it all began. Where they took their initial steps. Where… okay, sorry!
To start with, Adidas is the largest sportswear manufacturer in Europe and the second-largest in the world after Nike. The company was started by Adolf Dassler. In 1924 his elder brother, Rudolf Dassler joined him and both opened “The Dassler Brothers Shoe factory”.
Adolf had a strong love for sports and not just one of them. Skiing, soccer, football and boxing were a few of his interests. Since he knew it very well, he knew that every sport is different and that a sportsman faces difficulty because of the same footwear being used in different activities.
That is where he saw a market and his thought process began to make sport-oriented shoes that could improve the performance of athletes.
ENTER SPIKE SHOES!
Later in 1949, both the brothers had a breakdown in their relationship. Adolf created Adidas and Rudolf built PUMA that became the biggest competitor for Adidas at that time. Adidas was named after the initial two letters of Adolf’s name and the first three letters of his second name [AD-DAS]. The logo for Adidas was selected on the basis of the special feature in their shoe. The three stripes were used as a shoe design on the company’s products and also for comfort.
What makes them different was actually their logo! Smart move Adolf! 😉
Nike is an American multinational company that is the world’s largest athletic footwear and apparel manufacturer and supplier in the market. In 2014, as a brand, it was valued at $19 million and thus it became the number one brand in the sports industry.
Originally known as Blue Ribbon Sports (BRS) it was founded by Bill Bowerman and Phill Knight who was a University of Oregon track athlete in 1964. BRS later became Nike in 1971. The name was taken from the Greek goddess of victory called NIKE.
The company initially worked as a distributor for a Japanese Shoemaker Onitsuka Tiger. Bowerman made his first pair of shoes for Otis Davis who later went on and won two gold medals in the 1960 Summer Olympics. In the beginning, BRS sold 1300 pair of Japanese running shoes and made a gross amount of $8000.
But by 1971, the relationship between BRS and Tiger was nearing an end. By then BRS was prepared with their very first line of shoes having the SWOOSH (designed by Carolyn Davidson). In 1977, the agency created its first advertisement called, “There is no finish line”. After that came “Just Do it” which debuted in 1988. Throughout the 1980s it expanded its product line to surround many regions all around the world.
Now, Let’s Talk Performance And Revenues, Shall We?
In 2017, Adidas made an annual revenue of 21 billion euros and a brand value of seven billion US Dollars. In the same year, Adidas employed 56,888 people worldwide and generated 50% of its sales by the foot-wear category which is the most important category for Adidas.
Adidas knows that North America represents 40% of the global market in sport. They know it’s important to be dominant here. This is the reason Adidas is focusing on the North American Market.
Adidas is much smaller than Nike, but what makes Adidas different is that it has a good sense of what its customers are looking for and works on it.
It is the most valuable sport brand in the world, especially in North America. For Nike, it is also the main target because of the global revenue generated in 2017. The plus point with Nike is that they have strong marketing and sponsorship agreements to back it. Probably this is the reason, Nike made 30.57 B euros in revenue in 2017.
The difference in revenue wasn’t this huge in 2006. The story was different back then. Though Nike was still leading with 13.44 B euros while Adidas made 10.08 B euros.
Nike in 2015 won the bid against Adidas and officially became the next exclusive provider of uniforms to the NBA. And why not???
Let The Nike Vs Adidas Begin!
Over the years I have realized that Adidas puts quality over quantity. Customer satisfaction is important for them and probably this is the factor that made me cheat on Nike. Adidas in the past has talked to the athletes and customised footwear according to their preferences and comfort. Awww…
The game-changing point for Adidas was the innovation of its Y-3 series. Y-3 is not just about re-evaluating sportswear but also redefining material. It uses boost technology in their footwear.
Wondering what boost technology is? Relax, I am coming to the point!
Boost technology is an innovative cushion technology that uses TPU (Thermoplastic Polyurethane) that compresses under pressure. This compression helps in extreme shock absorption and instantly bounces back to its original form. It is believed that the boost technology proffers a more consistent run because of the high energy return. Here are a few footwears by Adidas that made them a strong competitor for Nike in this industry:
Nike earns more in one quarter than Adidas earns in an entire year. But the truth is that Adidas is putting customer satisfaction and innovation at an equal ratio and this is making Nike sweat.
So where did Nike go wrong?
Nike undoubtedly makes more revenue than Adidas and has captured a large share of the market. Nike went through a shocking point when Kanye West broke up with it and joined hands with Adidas. Well, he is not the only person to do that. James Harden was also lured by Adidas from Nike.
“We ain’t even gonna mention that other company no more, right?”
“We ain’t wearing that other company no more, right?” Kanye asked the crowd.
We all know which the other company is. It’s not like, it cannot be named.
In 2013, Kanye announced that he was leaving Nike and continue working with Adidas. According to him, Nike was not respecting him as a designer and was not giving him creative freedom. He also said in one of his interviews that Nike wasn’t giving him the opportunity to grow and also that Nike is working off an old business model.
After this, Kanye spent 1 month in developing Yeezy boots which vanished from the store within minutes of their release. The average price was $1500 on resale sites. Guess it was worth it, Kanye!
Customer reviews continue to deteriorate for Nike and there has been no innovation to get us mindblown recently. If the graph becomes stagnant for Nike like this, tables will soon turn in favour of Adidas.
Adidas Revenue Transformation 2015-2020
Nike, Adidas and Puma are the largest footwear companies in the world with an impressive product portfolio. In particular, Nike and Adidas have put in place some effective marketing strategies that have helped the company grow over the years.
Over 2015-2017 it grew its footwear revenue and took over the market. Here are a few key points that will explain the revenue to date:
- Since 2015, Adidas has added $5.8 B to its total revenues. This lead to average annual growth of 17.6%.
- Compared to Nike, Adidas went ahead in the race in the past couple of years with the launch of Adidas Neo and Originals in the sport market.
- In 2018, Adidas spent aggressively in marketing the products. The marketing expenditure for them in 2018 was $3.5 B, which was roughly 14% of their total revenue.
- In 2019 their annual revenue was $26.477 B which was a 2.3% increase from the previous year.
- September 30, 2020, was a declining phase for Adidas where they generated a revenue of $22.631 B, leading to a decline of 12.83%.
Nike Revenue Transformation 2015-2020
Compared to Adidas, Nike exceeded by roughly 50% over recent years. Since 2015, it has been increasing at an average annual rate of 6.5%.
- Since 2015, Nike has added roughly $6.7 B to total revenue in the market.
- Nike gave a head to head competition to Adidas by reaching a revenue of $39 B in 2018. This was 50% more than Adidas’s revenue in 2018.
- The apparel and footwear segment especially led to a rich growth followed by some global trends to increase health awareness.
- This lead to a huge gap between Nike’s and Adidas’ footwear revenues. As of 2018, Nike’s revenue of $24.2 B was roughly 60% more than that of Adidas’ $15 B.
- Nike too, like Adidas, dedicated a big marketing expenditure for its products. Around $3.8 B was kept for Nike’s marketing which was approximately 10% of Nike’s total revenues.
- 2020 brought an economic dip for companies all over the world, and Nike too got a hit from it. Though in 2020, Nike employed over 75,000 people worldwide but the revenue fell 4% due to the impact of COVID-19 on operations. $37.4 billion was their revenue in the fourth quarter. In January 2020, which was before the pandemic had started hitting the businesses, the revenue for them was up by 9%.
- In 2020, digital sales increased 47 per cent for them.
What I Think About This Whole Nike Vs Adidas
I personally think that Nike should be a bit bold towards their fashion. For example, the Undercover X GYAKUSOU running shoe line is amazing and comfortable but it still feels as if it is just a result of altered colourways of existing models. Apart from this, they should let the in-house designers experiment and risk it. Not everything can be planned. I hope Nike has some innovation planned that would make me want to take back the above suggestions.
Lastly, Let’s Just Take A Look At Nike Vs Adidas When It Comes To Celebrity Campaigns
Adidas launched a Star Wars-themed World Cup campaign featuring David Beckham, Noel Gallagher and Snoop Dogg. The campaign also featured Franz Beckenbauer, Ciara, Jay Baruchel and Daft Punk alongside Star Wars characters Han Solo, Chewbacca, C-3PO and Obi-Wan Kenobi for, The Superstar.
Adidas launched an online campaign to unveil its long-term partnership with music producer and fashion designer Pharrell Williams. The ad starts with William’s feet out on the streets walking backwards and leading to an apartment where he picks up his hat to reveal the sign, “Adidas = Pharrell Williams”.
Novak with the campaign #smashthesilence encouraged his fan base to take part in the social ride about showing their emotions. The part of the campaign was to post a picture on the social media handles with the hashtag.
Okay, so the recent song that Drake has just released (Laugh Now Cry Later) is basically a well made Nike ad. It’s not just an ad, it is a short movie made for promoting the product. This is the level of dedication that an endorser puts in its product promotion. Such promotions have been done in the past too.
Roger Federer has won 20 Grand Slams wearing Nike. So it is pretty much clear that their affiliation is not a new thing. Their partnership with each other has developed over the past 20 years and Federer has been there with Nike. When Tiger Woods represented Nike in golf, Federer acted as their talisman in tennis. This was an association that stretched beyond the sport’s fans.
“Be Fast. Be Mercurial” is the strapline that the campaign uses. Nike released this epic ad that is fun and quirky and encompasses a list of global stars that resonates with any pop music video.
Michael Jordan was originally going to sign a deal with Adidas when his mother told him to listen to Nike’s deal first and then make a decision on closing a deal with one of the brands. Nike offered Michael Jordan a $500,000-a-year deal for five years. Not only this, he was offered his own shoe, the Air Jordan. Air Jordans were sold worth $126 million in just its first year. “Jordan has to date made roughly $1.3 billion from the partnership,” Forbes said.
Kobe Bryant (RIP)
Bryant in his time was the best endorser for Nike. Initially, Kobe was an Adidas endorser, but later switched to Nike and stayed with them till the end. Unfortunately, he is no more with us today, but he gave us some memorable spots to remember. He was a part of the campaigns like “All Together Now,” from his 2010 championship run; to the quirky farewell of “The Conductor,” released in 2016 to honour his retirement. Nike after his unfortunate death released a tribute for him too.
Adidas vs Nike debate is like debating with Arnab Goswami, it will never have a closure!
But in the end, the fittest will survive in the market!
Adidas has always managed to keep its audience in consideration to design its products undoubtedly, but Nike has always had an upper hand innovation and design when it comes to the sport market.
I will have to give these marks to Adidas because they tend to keep the customers on the top. Adidas creates products according to their customers need. Undoubtedly, Nike is comfortable but they design the product keeping innovation in mind.
Looking at the revenue as per 2020, Nike is leading. Adidas, Nike both go head to head and the former has given the latter a tough competition when it comes to fashion as well as sport market. But in the end, it is only money that matters. There is a detailed bifurcation given in the article. Do give it a read and leave your comments below.
Adidas not only offers high quality footwear to its customers but also, that are comfortable and durable. It is known because they create products keeping their users in mind. They even have segregated their products according to the needs of the customers and sport the users follow, in mind.
This is exactly what we too are debating about. We haven’t chosen a side yet. Have you? Let us know which is cooler. Till then read what we are confused about.