Introduction
The history of Nike showcases the company as a leader in the sports apparel and footwear industry. Nevertheless, similar to other competitors, the changes in economic conditions directly impact the business’s success. In recent years, several significant events have affected Nike and the industry.
The COVID-19 pandemic started in 2019 and spread worldwide between 2020 and 2022. It disrupted many of the established processes in the supply chain (Becker et al., 2022). This event also led to the reconfiguration of the industry, as more clients started using digital technologies and shifting into the online world even faster than before.
Relationship Between Economic Conditions and Industry Sales
Currently, this relationship between changing economic conditions and industry sales is apparent in the company’s reports. During the onset and continuation of the COVID-19 pandemic, Nike and its major competitors – Adidas, Puma, and more – experienced decreased sales and slower growth (Becker et al., 2022). The market size analysis between 2019 and 2023 shows that 2020 and 2021 were the most difficult years for all businesses.
The purchasing power of people decreased significantly and did not recover until 2022 (Becker et al., 2022). At the same time, the sportswear industry underwent significant changes under new economic constraints, as more people began developing a sports-related lifestyle, purchasing clothing and footwear as part of athleisure or home-based workouts (Kohan, 2021). These factors, combined with the economic recovery, enabled Nike to grow over the past year.
Significant Issues Within the Industry
The sportswear industry continues to have several issues influenced by the pandemic. The disruption in the supply chain is one of the most prominent concerns for all manufacturers and retailers (Kohan, 2021). The COVID-19 pandemic negatively impacted the connections between fulfillment centers, stores, storage facilities, and manufacturing plants. As a result, the logistics of delivering Nike and other firms’ products became more complex and expensive, which caused a need to raise prices. As product demand grows, companies struggle to meet the customers’ needs and changing preferences.
Company’s Share of Total Industry Sales
Despite the numerous problems in the industry, Nike continues to dominate the footwear and athletic clothing markets. It is the brand with the highest earnings in the sports industry, occupying more than 38% of the total share (Kohan, 2021). This number sets Nike apart from its major rivals – Ander Armour, Adidas, and Puma. Notably, the company’s main product is footwear – more than half of Nike’s revenue comes from the sale of shoes (Becker et al., 2022).
Nike also has a significant share of the international and domestic markets, and its global sales align with its leadership position. The brand continues to grow and recover from the COVID-19 pandemic’s impacts, as its last reported profits increased by more than 20% despite industry-wide logistical issues (Kohan, 2021). Nike can be expected to grow in line with the industry, but other significant economic events may disrupt this trend.
Conclusion
To summarize, the sportswear industry has undergone significant changes in the last few years, and the pandemic has had a profound impact on people’s purchasing abilities, supply chains, and customer demand. Nike is a top market competitor with a substantial market share. However, even this industry giant has suffered stagnation and losses due to recent global events. As the economy recovers, the sportswear industry is gaining more customers, positively impacting Nike’s growth.
References
Becker, S., Berg, A., Kohli, S., & Thiel, A. (2022). Sporting goods 2022: The new normal is here. McKinsey. Web.
Kohan, S. E. (2021). Nike prices to rise amid supply chain issues while profits increase 23%. Forbes. Web.