Why Nike Dares To Increase The Price

Recently, affected by the pressure of rising costs, Nike announced that it would clothes 5% to 10%. However, also affected by labor and raw material costs, Nike is the only one that dares to announce price increases. Many domestic brands, such as Li Ning, Anta, Tebu, 361 degrees, are busy offering discounts to clear inventory. The rise and fall reflects the helplessness of China's manufacturing industry.

　　 Nike Why dare to raise the price? The reason is simple. It has a strong brand appeal and a strong control over product prices. In fact, Nike itself does not produce any products, it is just design and publicity. All products are agent production, which is a typical asset light company. Selling creativity and design is the key to its survival. But it is such a company that dares to raise prices decisively when costs rise, while domestic companies across the industry chain dare not raise prices at any time. It is Nike that has already got rid of the competition of sports brand Red Sea, so it can raise the price. Even if it does, it also has a large number of Nike controllers.

In fact, Nike is not the only one with such ability, Apple The same is true of all products. As soon as they are designed and produced, they will be priced at whatever price they are. They will never lower the price before new products come out, and money may not buy them. In contrast, which domestic brand has such appeal? ZTE is the leader of domestic mobile phones. The shipment of smart phones has entered the top four in the world. It sounds very powerful, but how about the benefits? According to the China News just released, ZTE's gross margin of telecom terminal products is only 16%, and the profitability of the whole company is even worse, with sales revenue of 42.6 billion yuan, net profit of less than 250 million yuan, and net profit margin of only 0.5%. Ask: How can such profit rate control the price? How interesting is it to work for banks and tax bureaus in the end just because of quantity?

Without core product competitiveness, there would be no product pricing power, and it was doomed to be a simple intermediate processing link. What China's manufacturing industry has learned after so many years of development is indeed worth rethinking. Why is there a debt crisis in a financial crisis thousands of miles away, when people are not doing anything at home, but a large number of Chinese enterprises go bankrupt? An empty shell manufacturing country can only be big but not strong, or even big and weak!