If you are an adventurer, a good pair of sneakers is a must for you in your life. The best part is it can be worn with any kind of clothes that you decide to deck up with. You can never go wrong with sneakers as they are comfortable and stylish enough to lift your style quotient. Sneakers can be worn with almost anything, they are extremely versatile and the comfort that they provide is matchless.
When we talk about sneakers, sports shoes, apparel, or sportswear there are two prominent brand names that ring almost together. They are none other than Nike and Adidas. These two renowned multinational corporations from two different continents - USA and Europe, have been hot favorites in the category of sneakers and sportswear since forever. Almost everyone has an idea or has at least heard of these two brands. Furthermore, growing in the same niche, Nike and Adidas have always been obvious competitors/rivals in their space. Both of them focus on sportswear and the shoes are what they are specialized in.
Every household has at some point had an argument over which shoe apparel company is the best and which dominates the other. However, over the years, both the US and German sports labels have maintained two recognizable brands around the world. Yes, financially Nike is known to be much larger than Adidas, but the latter’s performance has been better over recent years. The article below will explain to you what has been different between the two companies so far, what is in store for them in the future, and will help you choose your pick.
Comparison between Nike and Adidas:
- Nike vs Adidas: History and Growth
- Nike vs Adidas: Technology Difference
- Nike vs Adidas: Business Model
- Nike vs Adidas: Marketing/Branding Strategies
- Nike vs Adidas: Financial Snapshot
- Nike vs Adidas: Production and Suppliers
- Nike vs Adidas: The Cool Factor
- Nike vs Adidas: Sports Sponsorship
- Nike vs Adidas: Future Plans
- Nike Vs Adidas: The Real Battle
History & Growth of Nike and Adidas
Adidas is the largest sportswear manufacturer in Europe and the second-largest in the world after Nike. Formerly known as “The Dassler Brothers Shoe Factory”, the company was founded by Adolf Dassler and Rudolf Dassler in 1924. The founders being sports enthusiasts began to make sport-oriented shoes that could improve the performance of the athletes in any sport.
Later in 1949, the two brothers broke their relationship which led to the creation of Adidas by Adolf Dassler and Puma by Rudolf making them the biggest business rival at that time. Adidas was named after the initials of Adolf Dassler's while the logo of three stripes was taken on as a shoe design on the company’s shoes for better comfort. With their logo “Impossible is nothing.” Adidas is currently valued at $14.3 bn, as of 2021.
In 2017, Adidas made an annual revenue of 21 billion euros and has a brand value of 7 billion US dollars. In the same year, Adidas employed 5,888 people worldwide and generated 50% of its sales in the footwear category. Adidas is much smaller than Nike in the terms of what its customers are looking for and trying to find a bigger audience in North America. Adidas' total global revenues of 2021 were reported to be $11.61 bn, as of December 2021.
Nike is an American multinational company that is the world’s largest athletic shoes and apparel manufacturer and supplier. Originally known as “Blue Ribbon Sports” it was founded by Bill Bowerman and Phill Knight who was a track athlete in 1964 before becoming Nike in 1971. The name was taken from Nike, the Greek goddess of victory. The company was first made as a distributor for a Japanese shoemaker Onitsuka Tiger. Bowerman then made his first shoe for Otis Davis who later went on to win two Olympic gold medals in 1960.
Blue Ribbons Sports sold 1300 pairs of Japanese running shoes with a gross of $8000. While its first advertisement gave its tag name as “There is no finish line” which was changed to “Just do it” in 1988. As per the statistical records of 2021, Nike is valued at $30.44 billion and leads the world as the number one brand in the sports business.
When it comes to Nike, it is the most valuable sports brand in the world and especially in North America. Unlike Adidas, Nike's first target audience is the people of North America and they also have strong marketing and sponsorship agreements to back it. Making it the reason behind Nike getting 30.57 billion euros in revenue in 2017. In 2006, however, Nike was still the leading with 13.44 billion euros while Adidas made 10.08 billion euros. In 2015, Nike also won the bet against Adidas and became the next exclusive provider of uniforms to the NBA. Nike's total global revenues of 2021 were reported to be $44.54 bn, as of December 2021.
Technological Difference between Nike & Adidas
Nike uses lighter materials to make its shoe lightweight and is made of polyester, rubber, and cotton. With that, it uses ZoomX technology, so that consumers can experience good speed during running. Nike shoes have holes in their toe cap which makes them breathable and is hygienic for feet as well. Nike shoes provide amazing designs. Nike does make more business than Adidas but the customer reviews have deteriorated and there has been no innovation that has been as big as Yeezy's which is under Adidas.
Adidas always believes in putting quality over quantity and gives more importance to customer satisfaction. Adidas talks to many athletes about their preference and comfort to then implement it into their design. This was the reason for them to innovate Boost technology which is an innovative cushion technology that includes a TPU (Thermoplastic Polyurethane) that compresses under pressure.
Adidas Ultra Boost shoes weighed a little more than Nike shoes. The shoes consist of a full-length midsole and made it feel like a cushion-type material is present while wearing it. It focuses more on comfort and gives out more energy on every single stride. It also provides run toe padding for its shoe models for comfort. This instantly bounces back to its original form and in shock prevention which helps the athlete in a more consistent run. Some of the famous shoes made by Adidas are the Y-3 collection, Ultra boost, Gazelle, Supernova, etc.
In 2013, Kanye left Nike and joined Adidas to then go on to create the Yeezy's which despite being expensive sold out as soon as it hit the markets. This makes us think of whether Nike is going to up with something new or if tables will turn in favor of Adidas.
Nike vs Adidas: Business Model
Nike Business Model
Nike is a leading sports apparel manufacturer ruling the industry for some decades now. The main focus of Nike has been an aggressive approach towards building strong and promising networks and partnerships with celebrity athletes. To quote an example is to mention the exclusive contract that the company bagged with Michael Jordan when the latter signed it in 1984. This grew to be one of the most iconic partnerships in the sportswear industry and has benefitted both of them. On one hand, Michael Jordan witnessed tremendous growth in his net worth, and on the other hand, it gave Nike a lead and a total monopoly in the basketball sneaker business. Besides, it also helped increase the overall demand for common stock ownerships.
The American sportswear brand has already shifted from traditional media advertising and hugely focus on social media advertisements and campaigns. Nike concentrates on the athletes who display a high ROI going by their social media profiles. Furthermore, the company chooses the teams that are the most talked about and display the most engagement going by the core fans on their social media accounts.
Nike has largely focused on digitalization ever since it saw all the opportunities of growth it can enjoy there. It has revamped its marketing and products as well to embrace the age’s demands. For example, it rolled out the FuelBand, a $150 electronic bracelet, designed to measure a person’s movements throughout the day whether he/she is engaged in sports, swimming, jogging, or walking. This is a clear nod towards developing a digital force that Nike is aiming for now. One other thing that the company is eyeing is to reduce the production costs and make its products environment-friendly. Flyknit Racer is an exemplary product from Nike in this line.
Adidas Business Model
Adidas’s business is inclined towards creating innovative products that are crafted to suit the needs and increasing demands of the consumers. Adidas doesn’t believe in forming partnerships and invests less in its product endorsements, instead, the company is more focused on creating value by building products that are high in performance and are created with an eye on the specific needs of commoners and athletes. Furthermore, it also concentrates on its production rate, the available infrastructures, and the latest technologies that it can adapt, which Adidas constantly re-evaluates and expands. Moreover, the brand also puts efforts in reducing the complexity on a group level by streamlining the global product range. Consolidating the base of the warehouse harmonizing above market-service are some other things that Adidas is often involved in.
Adidas aims to deliver the best-branded shopping experiences at all consumer touchpoints. The company has also brought in innovative speed models in the supply chain, which helps it respond quickly to consumer needs. These are some of the Adidas strategies that have motivated investors from all around the world to purchase Adidas common stock. Besides, the company has also shown promising growth here for many years now.
Marketing/Branding Strategies of Nike and Adidas
Marketing/Branding Strategies of Nike
On diving into the marketing strategies of Nike the first thing that will pop up in your mind is the dominant hold of the market that Nike exercises. The brand believes in maintaining a strong brand image, where it is prominently remembered as a sportswear brand. Nike is capable of pulling it off with the help of numerous smart marketing strategies that the brand implements. Here’s a quick look at all the key strategies of the brand:
- Positioning of Products - Throughout history, Nike has positioned its products with utmost care. For example, it sells “athletic shoes” for the sportsperson, which helps it capture the niche market easily. Going by the market segmentation of Nike, the company targets athletes, sportspersons, and others who are eager to join the sporty or healthy lifestyle.
- Creative Ability of Storytelling - Nike has heavily relied on its storytelling abilities. The brand, as it was founded by athletes, also has an authentic background or a credible story that backs it up. Yes, Nike founder Bill Bowerman is the person who has first implemented this incredible idea of telling real stories. Back then he was a track and field coach during Nike’s initial days when Bill wrote stories for his own products that helped the company connect with its audiences.
- A Focus on Social Media Marketing - As soon as Nike discovered that most of its audiences are there on social media platforms, the brand decided to target various social media platforms. This helped Nike witness rapid growth over social media platforms and in revenues. Here are some key highlights of the social media strategies: It focuses on user-generated content, Nike works out collaborations with celebrities, The company often engages with the users on social media, Nike attracts influencers and allows them to promote the brand.
- Makes for Easy and Hassle-free Purchasing via its Website - Nike has decided to build an easy and effective website that categorizes all the products neatly in an easy-to-use interface. The website of Nike brings out the bold and fearless attitude of Nike users, which Nike boasts of. Nike also has smart product recommendations on its website, which makes it easy for the purchasers to make their decisions.
- Loyalty Program - Nike has a loyal group of over 100 million members who have been recorded to have spent 3X more time on their website than the guest buyers. Nike used this data to stress their loyalty programs and have magnified their loyalty programs.
Marketing/Branding Strategies of Adidas
Adidas has rapidly progressed in the past few years by leveraging smart marketing strategies. The brand has notably grown at a rate of 17.6%, thereby adding nearly $5.8 bn since 2015 when compared to Nike’s addition of $4.3 billion at an average rate of 6.8%. Here’s a list of all that Adidas leverages, which helps keep the brand ahead of its peers:
- Digital Marketing Strategy and Technical Advancements - Adidas’ straightforward digital marketing strategy and its laudable implementation is the power behind its success. A fast-growing e-commerce channel, digital production processes, and the quick adaption of technological advancements help the company gain a considerable amount of revenue along with helping it engage with its consumers.
- The pace of Production - Adidas boasts of its speed of production, which is completely digitalized and empowered with the latest technology of 3d printing and robotics at Speedfactory in Ansbach.
- Relationship with the customers - Adidas’ customer relationship is unparalleled. The company is there on the leading social media channels and keeps a constant engagement alive with its customers.
- Commendable collaborations and partnerships - Adidas calls in creativity. The company opens its doors and lets out an open call for all the sportsmen and other consumers from all around the world who have a creative bent to collaborate with the brand. The “Calling All Creators” campaign is one illustrious example of such initiatives of the brand. Furthermore, Adidas also collaborates with renowned football players, singers, and athletes to inspire its consumers and target customers.
- Strategic cities of operation - The cities that Adidas has decided to run its operations include London, Los Angeles, New York, Paris, Shanghai, and Tokyo, which have been strategically important for its growth.
Revenue of Nike and Adidas
Nike has bagged in revenues close to $37.4 billion in FY20. Nike has recruited and has over 75,400 employees working for them as of 2021. It is clear that Nike is the biggest sportswear brand and is a market leader to whom most of the other brands operating in the segment lookup. Nike has recruited and has over 73,300 employees working for them as of 2021. It is clear that Nike is quite big and is a really strong competitor of brands that deal with sportswear.
The revenues of Adidas have been reported at $11.15 bn in FY20. Adidas has an employee strength of 22,037+ employees when last reported in 2020. Adidas is one of the largest players operating in the sportswear segment that gives a strong competition to Nike. The company’s revenue has been reported to be around $6.78 billion in the quarter that ended in September 2021. Adidas has an employee strength of over 62285 people.
Production and Suppliers of Nike and Adidas
Although Nike is an American company just like its competitor, the shoes are not made in their own country. It has over 523 factories spread in over 40 countries and shoes and made in mostly China and Vietnam. Chinese manufacturers supply 23% of all Nikes production while Vietnam contributes 16% of Nikes total production which mostly constitutes creating apparel and footwear.
All the shoes from the brand Adidas are specially made in China, India, Atlanta, Indonesia, Thailand, Vietnam, Turkey, Germany, and Atlanta US. Adidas has over 500 factories in over 55 countries. The majority of shoes are made in the countries situated in Asia, like Vietnam, Indonesia, and China. Vietnam produces 44% of all Adidas footwear, followed by Indonesia at 25% and China at 19%.
Cool Factor of Nike and Adidas
The cool factor here refers to the collaboration with music and celebrities or other influencers. Adidas seems to be winning in this category as its athleisure collaborations with Kanye West and Beyoncé as compared to Nike more sports-focused approach with sponsoring some of the biggest names in the sports category like Serena Williams, Roger Federer, Tiger Woods, Kobe Bryant, and Lebron James, it has created some noise.
With athleisure becoming a new trend Adidas is trying to win the market by this approach. Kanye West is the best example of this because with the help of Adidas he has now built a billion-dollar Fashion Empire through his sneaker brand Yeezy.
Whereas Nike's main collaboration till now has been with the basketball veteran Michael Jordan whose Air Jordan line of trainers for it holds the top spot for celerity sneaker brands generating more than $3 billion in sales every year. But the first Jordans were launched in 1985 which is why it has lost its cool factor. The Celebrities that support Adidas are David Beckham, Pharell, Novak Djokovic while Nike's supporters are Drake, Roger Federer, Cristiano Ronaldo, etc.
Nike vs Adidas: Sports Sponsorship
Sports sponsorship has been the main activity of both the companies and has a history of being a part of numerous famous sports events. Nike is known to be the main provider of apparel, footwear, and uniforms of the NBA league most of the time.
In 2018 however, Adidas sponsored way more than Nike in the Football world cup. Where 12 teams wore the brand Adidas, 10 teams signed up for Nike. Adidas boasts the current World Cup holders Germany, along with Argentina, Spain, Belgium, Colombia, Egypt, Iran, Japan, Mexico, Morocco, Russia, and Sweden.
Both Companies have always competed on who will get to sponsor more teams especially in events like the FIFA World Cup, Olympics, and NBA basketball games.
Future Plans of Nike and Adidas
Nike is now looking to raise its revenues to cross the $50 billion mark, as per the statements of the Nike CFO Matt Friend. As with previous years, Nike is pivoting on its digital and DTC segments. The company is currently hoping to make 50% of its operations digital-driven by 2025. On the other hand, climate neutrality is one of the primary things that Adidas is currently aiming at. The brand is presently looking to achieve climate neutrality in its own operations by 2025 and bring in climate neutrality on a global scale by 2050.
Nike Vs Adidas: The Real Battle
To be specific there is this timeless battle going on between the best sneaker brands of the world. The battle started in 1976 when Nike hired John Brown and Partners as their advertising agency. Nike emerged itself into aggressive marketing and took 60% of the athletic shoe market in its grasp. When in 1988 Nike started the 'Just do it' campaign, it become one of the best ad slogans of the 20th century.
In recent times, more specifically in 2014, Adidas partnered with Ye formerly known as Kanye West, who claimed that his Yeezy Boost shoes are way better than Jordan Sneakers. This thing escalate the rivalry as people started leaning towards Yeezy's.
The sponsorship battle between the two is another issue. With Nike sponsoring some of the biggest names in the sports category like Serena Williams, Roger Federer, Tiger Woods, Kobe Bryant, and Lebron James, it has created some noise.
On the other hand, Adidas also showed that it is not less than anyone by sponsoring some of the biggest names from the sports and music industry. David Beckham, Novak Djokovic, Lionel Messi, Beyoncé and Ye. Reports claimed that Nike pays more to their sponsors than Adidas though.
The fight between the two sneaker giants didn't stop even in The Covid when Nike started creating face masks while Adidas created face shields.
Which is better Nike or Adidas?
Nike and Adidas are the two heavyweights when it comes to footwear and sports accessories. Regardless of where we belong from most of us are attracted to these brands when it comes to sports accessories including footwear and more.
Nike has certainly an edge over its archrival Adidas. The former has owns 50% of the market share when it comes to sportswear. The advertisements and powerful celebrity endorsements including that with Michael Jordan help Nike steer past its German counterpart, Adidas in terms of the market share, revenues, and profits. The latter, though owning a lot less of the market share than Nike, is well-revered among the world of its users for its quality and longevity. Founded in 1949, the German brand is one of the oldest operating players in the sportswear industry. However, it is the split between the brothers, Rudolf and Adolf Dassler, of the Dassler Brothers Shoe Factory that resulted in the making of two different brands - Adidas and Puma. This not only divided the brothers and their business for the rest of their lives but also divided the revenues they collected. However, it is also this split of the brothers that gave the world two of the leading brands in the footwear and sportswear industry for the users.
Why is Nike better than Adidas?
Adidas has always managed to keep its audience in consideration to design its products undoubtedly, but Nike has always had an upper hand in innovation and design when it comes to the sports market.
How is Nike different from Adidas?
Adidas because they tend to keep the customers on the top. Adidas creates products according to their customers' needs. Undoubtedly, Nike is comfortable but they design the product keeping innovation in mind.
Who makes more money Nike or Adidas?
Looking at the revenue as of 2020, Nike is leading. Adidas, Nike both go head to head and the former has given the latter a tough competition when it comes to fashion as well as the sports market.
What is the Nike brand value?
The Nike brand value was last estimated to be around $30.44 bn, when reported in 2021. The value of Nike decreased by $4 bn from what it was in 2020.
Is Nike an American company?
Yes, Nike is an American multinational conglomerate that was founded in Eugene, Oregon, US, on January 25, 1964.
What does Adidas stand for?
The name "Adidas" stands for the abbreviation of the name of Adolf Dassler, the founder of Adidas.
What is the Nike market share?
Speaking of Nike's market share, the US sports apparel and shoe manufacturing company presently dominates the sportswear with approximately around 50% of the market share.