On August 4, Nike suddenly announced that it would withdraw from the golf equipment market and stop producing golf balls, clubs and bags, but will continue to retain and strengthen its golf apparel and footwear business.
The struggle of Nike golf business has long been an indisputable fact. The newly disclosed annual report shows that the proportion of golf products has dropped from 3% to 2.6%; sales volume has declined for the third consecutive year and the rate of decline has reached 6%. In contrast, all other nine categories of the company achieved growth, with an overall growth rate of 12% (Note: removal of exchange rate effects).
Golf has become almost the only burden on Nike.
As Tiger Woods slipped and suffered from injuries, Nike could not find the next golf idol to dominate the game. Roy McIlroy, who was highly hopeful, has not won one of the PGA Tour or European Tour Championships this year. On the other hand, the younger Jordan Spieth under Under Armour was a thunderous champion and repeatedly won the championship. This contrasting situation sounds like a sad story.
Stripped of stagnant business, focusing on the development of core categories, this routine is not new to the sports manufacturers in these two years.
Three months ago, Adidas announced that it will sell its three brands, Taylormade, Adams and Ashworth, which are based on golf balls, while retaining Adidas Golf, which is dominated by its core brand. Even new players like Under Armour have been cautiously stuck in the field of familiar footwear and clothing, and have not yet been involved in the game of football. The strategy of several big sports brands in their golf business is the same, and people can not help but begin to doubt the profitability of this segment of the market.
One possible reason is that the ability of several sports giants to excel at marketing is not available in this particular market. On the one hand, there is a relatively low degree of overlap between golf players and the consumer groups of popular sports such as football, basketball, and running. On the other hand, even if there is money, most consumers will only buy one set of golf equipment in their lifetime. The low frequency of consumption, along with the participation of fewer and fewer young people, has led to a lack of growth momentum. At the same time, the R&D expenses of the equipment and the core shoes and clothing service are difficult to form scale effects, and the high unit price of the golf club bag does not necessarily bring high profits to the sports manufacturers.
Returning to the Olympic Games and admitting female members, golf seems to be trying to change at this point. However, the road ahead is long and distant, but it is not known yet. Look down and you may be able to walk more steadily.
Source: Curiosity Daily
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