00:00Everyone, when was the last time you bought Nike shoes?
00:05The Just Do It Nike, that brand, which was once the number one choice,
00:10when it came to sneakers, has been kicked out of the S&P 100, one of the U.S.,
00:15blue-chip stocks lists after 18 years.
00:18But here's what's really strange.
00:20It's not like the sneaker market itself has collapsed.
00:23A lot of people are wearing Hoka these days, right?
00:26Online training is the same.
00:28The market is still alive.
00:30But Nike is the only one that's slipping.
00:32First, let's look at the numbers.
00:34In 2021, Nike's market capitalization was about $280 trillion won.
00:39Now it's around $70 trillion won.
00:41In terms of the stock price, it has plunged 78% from its peak,
00:46that means it's basically been cut to a quarter of its value.
00:49And this time, it was removed from the S&P 100 index, which is like a club
00:53that gathers 100 of America's representative blue-chip stocks.
00:57Nike had held its spot for 18 years.
01:00But in the end, it got displaced.
01:02So who's going to fill the spot?
01:04Where Nike is missing, it's AI companies like Palo Alto, Networks and SanDisk,
01:09as well as cybersecurity firms.
01:11So why did things end up like this?
01:14First, they stopped innovating.
01:17You know the technologies that come to mind when you think of Nike.
01:20Air Max Flyknit.
01:22When things like that came out, it was really shocking.
01:25But when you think of Nike's new products these days, what comes to mind?
01:30Dunks?
01:31Air Force Ones?
01:31Those are all models that are decades old.
01:34It's not that Nike couldn't make something new.
01:36It's that they kept churning out old models that sell well.
01:41As a result, their scarcity has gone down.
01:44More discounted items are showing up.
01:46And the brand has become common.
01:48In the meantime, Anan Hoka created innovative reactions with their own unique techniques
01:54and silhouettes, exactly the way Nike did in the past.
01:58Second, just watching.
01:59After COVID, a running boom came along.
02:02These days, even people who don't usually work out wear running shoes to commute.
02:07This market has grown explosively, but Nike wasn't at the center of it.
02:11At Dick's, a major U.S. sporting goods retailer,
02:14while Nike's share of shoes fell from 39% to 32% in early 2024.
02:25Hoka's rose from 8% to 13%,
02:27and the share also moved from 8% to 12%.
02:31Nike also has top-tier running shoes.
02:33But the problem is that, for ordinary consumers,
02:37they've ended up losing their presence in the everyday, running shoe market.
02:41Third, the headwinds against the DTC strategy.
02:45What DTC means is a strategy where you can only buy directly from Nike stores
02:50or from Nike.com, cutting out middle distribution and aiming for higher margins.
02:55At first, it went pretty well.
02:57But if you think as a consumer, when you want to buy sneakers,
03:01you don't just go to a Nike store, you know.
03:03A lot more often you go to a multi-brand store, try on a bunch of pairs.
03:08Then you go, oh, this is pretty good, and you end up buying it.
03:12While Nike is cutting back on its distribution network,
03:15other brands have taken up that space.
03:18In the end, Nike is moving back into the wholesale distribution network it had once discarded.
03:23But it doesn't end.
03:25Here you can't really not talk about China.
03:27For Nike, China is the second, most important market after the U.S.
03:32It accounts for 15% of total sales.
03:34But this market has been declining for eight straight quarters.
03:38In the most recent quarter, it fell by as much as 17%.
03:41But during the same period, Adidas increased sales by 14% across the world, including China.
03:48What's the difference?
03:49Adidas is a global brand, but it used a strategy that
03:53determines the products and marketing tailored to each region.
03:58So what is Nike doing right now?
04:00The new CEO is working on
04:02rebuilding relationships with our wholesale partners,
04:06reducing inventory, and fine-tuning the China strategy.
04:09But the company itself is also admitting that
04:11it won't be easy to recover performance by 2027.
04:15But the key point is this.
04:17That's the point where the idea of
04:19because it's Nike,
04:21you buy it no longer works.
04:22This is what happens when you only trust one brand
04:25and miss out on innovation,
04:29distribution, and localization.
04:31That's all for today's video.
04:33See you in the next video.
