美国品牌在华业务萎缩，耐克Gap等加速本土化调整

American brands are losing relevance in China. China was once one of the most lucrative markets for US companies, with over 1.4 billion consumers to reach and massive opportunities for growth. But over the past few years, more companies are seeing slower sales. Nike's China business, for example, has shrunk more than 30% since 2021, and this year its annual revenue reached its lowest level in eight years. The difference in the China market versus the United States, as an example, is that it's a direct it's a mono brand store.

Physical retail is Nike only. And that I think we went to sportswear oriented and not sport enough. And so now we're reevaluating the concepts that we have in China. Experts say this trend is caused by a combination of factors. The first is just frankly sort of price for quality, right? Like you're paying a price premium generally for the US brand versus their Chinese counterpart. And are they worth that difference? Second is innovation cycles, like Chinese brands often have a very fast innovation cycle, in part because they're the suppliers to a lot, even of the US brands or the other brands.

Third is obviously just distribution. The fourth, I think is sort of cultural relevance, right? Like there's probably a little less looking to New York, LA, Paris, Rome necessarily for trends and I think more willingness to follow local trend. Geopolitical tensions haven't helped either. China and the US have been embroiled in a tariff war under President Donald Trump. And a rise in nationalism has made consumers want to buy more domestic products.

To counter that slowdown, some American retailers have tried to offload their China businesses to local partners. Gap sold its business in 2022 and broke even for the first time earlier this year. Abercrombie and Fitch is reportedly looking into this as well, but it's not just retailers. While Elon Musk denied the claim, there's been some reporting that Tesla is considering a spin off of its China segment. General Motors, Ford and Chrysler parent Stellantis have collectively lost more than 25% of their global market share over the past few years.

That's partly due to the loss of their business in China. A lot of times people haven't won because they haven't adjusted carefully to the local market. Amazon was was early in China, and they don't exist in China really in a meaningful way anymore. Local brands have disrupted the market. Starbucks has lost a lot of its traction, mainly due to its domestic competitor, Luckin Coffee. Ceo Brian Niccol created a joint venture with Boyu Capital to operate the company's business in China.

But there are American companies who are successful in China, Lululemon, KFC and Ralph Lauren, to name a few. After 15 slow quarters, Procter and Gamble CEO said on the latest earnings call that the company was finally seeing some growth there. We changed our go to market. We changed our brand building systems and processors and capabilities. We changed the kind of innovation we were doing because we knew we were in a lower growth market that needed us to drive market growth.

Yet overall, American influence is waning. Unless companies can sustain relevance and prove their value proposition. And that can be challenging. If you're going to win. I suspect it's not going to be in the opening price point, low cost stuff. I think you're going to win through quality. You're going to win through innovation, you're going to win through cultural relevance, and you've got to find a way to do that.