Business
Nike and Adidas square off for Brazil World Cup in ongoing brand battle
FRANKFURT – When soccer teams battle for the World Cup in Brazil next year, another fight for global supremacy will be played out on the pitches – between Adidas and Nike.
In the next round of their tussle to be the world’s biggest sports brand there is everything to play for.
Nike currently owns 14.6 percent of the global sporting goods market to Adidas’ 11.4 percent, and is whittling away at the German brand’s No. 1 position in Europe. Adidas held 13.2 percent of the western European sporting goods market in 2012 to Nike’s 12.4 percent, according to Euromonitor data.
“It’s not easy to evaluate (next year’s) collections. Adidas is definitely putting a lot of effort into winning lost ground, but a company like Nike won’t rest on its laurels,” said Hans Allmendinger, head of marketing for German sporting goods retailer Sport2000.
Adidas (ADSGn.DE) has for more than 40 years decorated soccer kit and shoes with its distinctive parallel lines logo. It has strong partnerships setting it up well for the coming challenge: a close relationship with German club Bayern Munich, of which it owns 9 percent, and with FIFA, soccer’s world governing body, for whom it designs official World Cup kit.
Adidas has forecast record 2014 soccer sales of over 2 billion euros and aims to boost group sales to 17 billion euros ($23 billion) in 2015.
U.S. Nike (NKE.N), meanwhile, only entered the soccer market in 1994. But already it has several major partnerships with clubs, including English champions Manchester United.
The owner of the distinctive ‘swoosh’ or tick logo, does not give forecasts for individual sport categories, but it is predicting group sales of up to $30 billion by 2015 – suggesting it thinks it can put in a sufficiently strong performance during the World Cup to stretch its global lead over the German company – and maybe beat it at home too.
In Nike’s first fiscal quarter of 2013, ended August31, it posted an 8 percent jump in sales in Europe. Over the same period, Adidas’ European sales fell 7 percent.
AMBUSH MARKETING
Adidas is pulling out all the stops to make its presence felt in Brazil, where Nike sponsors the national team.
Brazil have won the World Cup a record five times and the country is a byword for stylish soccer, meaning there is a huge buzz around the tournament – and Nike’s designs.
Adidas is aiming to make its presence felt with players like Lionel Messi and Mesut Ozil, who play for Adidas-sponsored national teams Argentina and Germany – and the launch of the official match ball, the “Brazuca” – on sale for $160 but free to Brazilians born on its launch day.
Given the scale of the battle however it will also be using what is politely known as “ambush marketing.” Soccer watchers cite as an early example in this year’s World Cup campaigns the launch of a new soccer top for the Palmeiras club in the yellow, green and blue worn by the Brazil national team.
“That will be ruffling a few feathers,” said Berenberg Bank analyst John Guy. “They’ve certainly got a few tactical moves up their sleeves to consolidate their position against Nike and that’s good to see.”
Klaus Jost, president of the world’s largest sportswear retailer Intersport, said Nike’s roster of top soccer players like Frenchman Franck Ribery and Portugal’s Cristiano Ronaldo was one of the reasons for Nike’s increasing sales in Europe.
“It’s much more about creating the right image,” he told Reuters. “Stars like Ribery, Ronaldo and (Zlatan) Ibrahimovic have such an attraction that many kids want to copy them.”
BIG STARS
Big name endorsements are also responsible for Nike’s broader success.
Retailers say the U.S. brand has gained market share this year thanks to well designed, comfortable products such as the top-selling Nike Free sneaker – and getting its performance-enhancing shoes on the feet of the biggest sports stars.
Nike’s impressive roster of sponsorship deals includes current names like soccer star Ronaldo, tennis player Roger Federer, golfers Tiger Woods and Rory McIlroy and legendary track and field athletes like Carl Lewis and Michael Johnson.
“Nike has done a really good job of presenting themselves as the true brand for performance,” Tammy Smulder, managing director at marketing consultancy SCB Partners, told Reuters.
“Nike says, ‘We will be associated with the top athletes, whatever the sport’. You can’t dispute that,” she added.
Adidas chief executive Herbert Hainer said this week the group had made some mistakes, but added: “We believe we can grow the business by launching a lot of new innovative products. Our pipeline of new products is full.”
One of the ways Adidas is hoping to grow sales is by using the cushioning technology in its Boost running shoes for other categories such as basketball. That could enable it to increase sales of Boost shoes to 15 million pairs in 2015, after having only introduced the line earlier this year.
It has signed big names in sports other than soccer in a bid to gain market share from Nike. But its partnership with U.S. basketball star Derrick Rose has run into difficulties as a result of Rose suffering several injuries that have kept him off the court for months.
HOW TO MEASURE COOL?
The biggest challenge in the battle of the brands is to win the crown of cool – something far more difficult than simply designing a new product.
At the moment, say market watchers and consultants, Nike seems to be stealing a march on Adidas thanks to early adoption of new technologies which it is then harnessing to a bigger social media presence.
“They have a good hunch for the next wave that will define a generation,” Lea Simpson, strategy director at digital strategy agency TH_NK, told Reuters.
“In the 1980s, it was fitness, now it’s tech and sustainability.”
Nike has almost 2.5 million Twitter followers to just over 570,000 for Adidas. It also has higher Facebook engagement rates, showing its fans interact better than Adidas fans with posted content.
Its Nike+ Fuelband and other apps track training and can then post results on social media sites – a far more powerful demonstration of brand involvement than a Facebook ‘like’, Simpson said.
Adidas CEO Hainer said this week that the company would shift “much more money” into digital and social media.
Garth Farrar, global head of digital at Repucom, noted Adidas had already been producing more Vine clips, Facebook posts and tweets over the last months.
He said Adidas’ social media campaign looked geared to “give the brand more cultural relevance beyond Europe .. and help protect the brand from any ambush stunts from Nike around the World Cup.”
– REUTERS
The need for stronger regional collaboration, government-private sector synergy, and innovative market solutions to unlock Africa’s economic potential has been brought to the fore.
Group CEO of the Nigerian Exchange Group Plc (NGX Group), Temi Popoola, shed light on the transformative potential of Africa’s capital markets at the launch of the Ethiopian Securities Exchange (ESX).
The NGX Group’s strategic investment in ESX underscores its leadership in advancing Africa’s capital market infrastructure. “The launch of ESX represents a pivotal moment for Ethiopia and the broader African financial landscape,” Popoola stated. “ESX will serve as a crucial mechanism for capital formation and market liquidity, driving sustainable economic growth.”
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Expounding on NGX Group’s investment rationale, Popoola highlighted Ethiopia’s immense market potential and the shared vision of fostering economic growth through innovation. “Our partnership transcends traditional investment parameters,” he explained. “It is about ensuring that ESX evolves into a key player in Africa’s financial ecosystem, enabling cross-border investments and setting benchmarks for market development.”
Popoola also drew parallels with global success stories like India, which has leveraged its capital markets to achieve significant economic transformation. He emphasized the importance of responsible market opening to attract local and continental capital. “By following this path, Ethiopia can become a financial hub in Africa,” he remarked.
Prime Minister Abiy Ahmed lauded the launch of ESX as a transformative milestone in the country’s journey toward economic modernization. “Today, we have officially rung the bell to launch the Ethiopian Securities Exchange, our nation’s first stock exchange,” the Prime Minister announced on X. “This is a call to global investors: Ethiopia offers immense potential, a fast-growing economy, and a clear trajectory toward shared prosperity.”
CEO of the Ethiopian Securities Exchange, Tilahun Esmael Kassahun, expressed confidence in the partnership with NGX Group. “We are pleased to welcome NGX Group as a strategic partner, building upon the existing support we continue to receive from them,” he said. Kassahun also emphasized the value of NGX Group’s expertise in shaping ESX’s growth and success.
Drawing from NGX Group’s six decades of experience, Popoola shared insights on diversifying financial instruments and expanding access to investment opportunities. “With the right mix of innovation, policy support, and regional collaboration, Ethiopia’s capital market can play a transformative role in driving economic development and establish itself as a leader in Africa’s financial ecosystem,” he concluded.
With the ESX poised to redefine Ethiopia’s financial landscape, NGX Group’s involvement highlights the critical role of partnerships and shared expertise in advancing Africa’s economic narrative.
The Office of the Auditor-General of the Federation has uncovered financial irregularities amounting to ₦514 billion in the 2021 operations of the Nigerian National Petroleum Company Limited (NNPC Ltd).
The revelations were contained in a comprehensive audit report highlighting non-compliance and internal control weaknesses within Ministries, Departments, and Agencies (MDAs) during the 2021 financial year.
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Breakdown of Infractions
The audit detailed four major financial discrepancies within NNPCL:
“Irregular Deductions: A total of ₦343.64 billion was deducted from domestic crude oil sales at source without proper documentation.
“Sinking Fund Deposits: ₦83.66 billion, categorized as miscellaneous income, was retained in a sinking fund account.
“Unauthorised Refinery Deductions: ₦82.95 billion was deducted from federation revenue purportedly for refinery rehabilitation.
“Unsubstantiated Payments: ₦3.75 billion was flagged for transactions related to petrol sales that lacked proper verification.
The Auditor-General’s report stated that these financial activities violated the 1999 Constitution and the Financial Regulations Act of 2009, underscoring significant lapses in compliance with statutory guidelines.
According to the report, NNPCL generated ₦484.73 billion from domestic crude oil sales in March and May 2021.
However, ₦343.64 billion was deducted for various purposes, including “Value Shortfall,” “Strategic Stock Holding Cost,” and “Pipeline Maintenance.”
The deductions were made unilaterally by NNPCL without adequate documentation or justification.
Additionally, the report flagged ₦50 billion of the net payable amount for May 2021 as unaccounted for, creating a significant gap in the federation’s revenue.
“Audit observed from the review of NNPC SAP payment record for March and May 2021 payments that the sum of ₦484.73bn was the gross amount generated for the sale of domestic crude for the months of March and May 2021.
“The sum of ₦343.64bn from the gross amount was unilaterally deducted from the gross domestic crude sales as NNPC Value shortfall, Strategic Stock Holding Cost, Crude Oil and Products Pipeline Losses, as well as the pipelines maintenance and management costs.
“The details of each of the cost components deducted were not provided for audit review. Hence, the reasons for the deductions could not be justified by the management.”
On the unremitted ₦50 billion from May 2021, the report noted: “In the month of May, the net payable that could have been remitted ought to have been ₦127.075bn, but only the sum of ₦77.075bn was remitted, leaving an unremitted balance of N50bn to the Federation Account, which has remained unaccounted for.”
The report attributed these anomalies to weaknesses in NNPCL’s internal control systems, warning of the risks they pose to public funds.
It read, “The above anomalies could be attributed to weaknesses in the internal control system at NNPC, now NNPC Ltd. This is a potential loss of Federation revenue, diversion of public funds, or misapplication or misappropriation of funds.”
The success of the maiden edition of the Lagos Shopping Festival (LSF), Africa’s first 72-hour non-stop commerce and entertainment event has been credited to the Governor of Lagos State, Babajide Sanwo-Olu.
This is the view of Managing Director/Chief Strategist of Chain Reactions Africa Ltd, Israel Jaiye Opayemi, one of the main organisers of the event.
According to Opayemi, though Chain Reactions Africa conceptualised the event, the festival could be rightly described as the Governor’s baby and owes its success to his leadership. “Firstly, the Lagos Shopping Festival could not have come to fruition if the Governor did not buy into our audacious plan when we first presented the idea to him during the Covid-19 pandemic in 2020. Secondly, it was the Governor’s exemplary leadership of the project as its Chief Marketing Officer which attracted the buy-in of key sponsors like Zenith Bank, Tolaram Group, First Bank Plc, and Guinness Nigeria Plc,” Opayemi revealed.
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While the duo of Zenith Bank and First Bank provided their bank on wheel platforms for buyers at the Lagos Shopping Festival, they also supported the Vendors with special Point of Sale Machines with which to process payments from buyers. The banks were also seen marketing their diverse banking products to guests within the shopping arena.
For Tolaram, it was a time to support the citizens and give back to society. Guests at the Lagos Shopping Festival were freely given some of the products of the group such as PowerOil, Indomie and Kellogg’s packaged into goodie bags and given out to prospective buyers at the shopping arena. The Children’s Arena was however activated by Indomie with the children entertained by Santa Claus within a well-equipped arena manned by the Indomie Brands team and the Lagos State Safety Marshalls. The children were daily treated to free Indomie meals daily and given various gifts to go home with.
On its part, Guinness Nigeria came through as the real life of the Nigerian party by organizing product sampling activation for the teeming guests at the festival using brands such as Singleton, Johnnie Walker, Ciroc, Don Royale and Captain Morgan to deliver pleasant experiences to guests aside from Guinness and Malta Guinness.
While unveiling the identity of the festival last month, Governor Babajide Sanwo-Olu had thanked the management of Zenith Bank Plc, Tolaram Africa Group, Guinness Nigeria Plc and First Bank of Nigeria for supporting the idea of a Lagos Shopping Festival, describing it as a value addition on the state’s tourism calendar and the overall efforts to grow the State’s GDP. The Governor further said, “I must specially acknowledge your pioneering sponsorship role. It is easy for a corporate sponsor to jump on the sponsorship band wagon of an already established festival and fund it. But you are supporting the maiden edition of this Lagos Shopping Festival with us. The competition is watching you now. Do not build this brand with us and yield the space for the competition to take over. I do hope you would all commit long term to this brilliant initiative.”
On his part, Girish Sharma, CEO Guinness Nigeria Plc, expressed enthusiasm for the initiative. “Lagos is the commercial heartbeat of Nigeria and Africa’s entertainment capital, and the Lagos Shopping Festival captures its essence. We see opportunities in this initiative because it is a creative fusion of commerce and entertainment. This partnership reflects our dedication to fostering economic opportunities and support the nation’s vibrant entertainment industry.”
A first-of-its-kind, the festival was a convergence of commerce and entertainment, bringing together buyers and sellers in the MSME ecosystem, and hordes of fun-seekers who were entertained with thrilling performances by A-list entertainers, including Adekunle Gold, Wande Coal, Teni, Young Jonn, BNXN, Ayo Maff, SB Live and EmmaOMG. The list also included some of Nigeria’s most sought after DJs such as DJ Neptune, DJ YK Mule, DJ Baddo while Gbenga Adeyinka the 1st and Larry J dished out rib-cracking comedy performances.
Held from 23rd to 25th Day of December 2024, at the iconic Mobolaji Johnson Arena, Onikan Stadium, Lagos, the Lagos Shopping Festival saw thousands of fans throng the main venue and select Lagos malls during the three-day period to bag the latest bargains from local and top global brands.
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