If sports have seized your interest during or before the pandemic, one debate you cannot overlook is the war between the sportswear manufacturers. We're talking about Adidas and Nike, arguably the best two corporations in their field. It is undoubtedly an epic standoff, like the ones seen in spaghetti westerns but instead of Colt 45 Single Action Army, which is the Peacemakers; there is a lot of money, assets, and an unparalleled legacy involved.
But things might be changing, especially in the US. Adidas became a direct challenge to the top dog Nike when it surpassed Jordan Brand as the second most popular shoe company in 2017. In 2019, Nike, Inc. reported $39.117 million worth of sales whereas; Adidas reported $25.309 sales in the same period. To put this into perspective, the closest competitor to these two giants was Puma, who reported a puny $5.706 million in sales!
In 2017, Adidas propelled their sales in Q3 by signing a mega-deal with Kanye West. It was around the same time Nike's sales dropped in North America. In 2020, Adidas was valued at $16.481 billion, whereas Nike was valued at $34 billion, still almost twice to that of Adidas!
So who is better? It is tough to conclude without having an unbiased approach. Let us break it down to some essential aspects.
A Brief History
Founded by Adolf Dassler, a German cobbler, with his brother Rudolph in 1924 as Dassler Brothers Shoe Factory, they began selling spiked running shoes for athletic events. In 1936, Adolf persuaded Jesse Owens to wear his spikes for the Olympics which kick-started their journey. In 1949, however, the fallout between the two brothers caused the company to split. Adolf named his faction Adidas and Rudolph named his side Puma (Yeah!).
Nike, on the other hand, was formed as Blue Ribbon Sports in 1964 was named Nike (circa. 1971) after the Greek goddess of victory. Their deal with Michael Jordan in 1984, who ironically was using Adidas at the time, paved the way for unprecedented success.
So who is better?
While the overall statistics suggest Nike leads by a large margin, recent analyses show Adidas catching up quickly. Undoubtedly, Adidas has increased its reach in global markets, as evidenced by its revenue growth. Since 2015, Adidas has added $5.8 billion - growing at a rate of 17.6%, a far cry from Nike who grew at an average rate of 6.8%. Due to Adidas' refined approach towards its customers and bagging big endorsements, it expanded its growth.
While the demand for the technical performance of shoes was always present, people have started to care more about fashion, style, and comfort. Adidas stressed on these particular changes of preferences and eventually reaped benefits. For example, in 2017, Adidas released a 3D printed shoe that gives them room more for customization. The "Futurecraft 4D" uses digital light synthesis comprising of UV lasers to create a shoe that is more durable and flexible. But the sales imply Nike has utilized a wider range of technology to cater to their customer's needs.
Both companies have had their fair share of setbacks and controversies too. Adidas recently snatched James Harden and Kanye West away from Nike, the latter launching a scathing attack on Nike. To make matters worse, Nike was in a pickle at that point. Their decision to keep supporting Colin Kaepernick (who refused to kneel during the national anthem) invited mixed review and controversy. Nike also has a notorious reputation when it comes to human rights treatment. Due to exploiting the workers, paying below minimum wages, and poor working conditions, they have gained criticism from others. Its failure to sign the Bangladesh Fire & Safety record made it worst.
Adidas, on the other hand, accepted making some consequential mistakes in the past. In an interview with CNN Business, Mark King, the head of Adidas operations in North America, admitted their incompetence towards women. He also said that North America represents 40% of the global markets, thus stressing the need to dominate in that region.
So while Adidas is closing in on the gap by clinging on to their ‘cool’ factor and sponsorships, we cannot say Nike is declining. It's just flattening out. Preference depends from person to person depending on the comfort, style, pricing, and influence.
The real winner is the one who can anticipate changing trends and stay ahead of customer demands. We’ll leave you to decide who is better.
One thing to be noted while purchasing accessories between Adidas or Nike is that comfort and quality are of most importance. It is the key to personal satisfaction. Pricing and style are secondary aspects.
Happy sporting!
Written by: Chirantan Shah
A 19 batch student of SOT; apart from engineering, I have always been interested in sports and finance. I decided to write this blog when I went online to buy shoes and couldn't help but notice my screen filled Adidas and Nike products.
Edited by: Megha Mistry
She is a 2nd-year SOT student in PDPU. Her motto in life is to create as much chaos as Kanye West tweets. An avid reader and music fanatic, she wants to vibe with everything, including the world of finance and stock markets.
Comentarios