Word: nike
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...Foreign-made refrigerators are displacing Haier as the favorite in China's kitchens. Chinese dress in their baggiest jeans to sit at Starbucks, which has opened 100 outlets and plans hundreds more. China's biggest seller of athletic shoes, Li Ning, recently surrendered its top position to Nike, even though Nike's shoes--upwards of $100 a pair--cost twice as much. The new middle class "seeks Western culture," says Zhang Wanli, a social scientist at the Chinese Academy of Social Sciences. "Nike was smart because it didn't enter China selling usefulness, but selling status...
Zhang hadn't yet been born when Nike founder Phil Knight first traveled to China in 1980, before Beijing could even ship to U.S. ports; the country was just emerging from the turmoil of the Cultural Revolution. By the mid-'80s, Knight had moved much of his production to China from South Korea and Taiwan. But he saw China as more than a workshop. "There are 2 billion feet out there," former Nike executives recall his saying. "Go get them...
Phase 1, getting the Swoosh recognized, proved relatively easy. Nike outfitted top Chinese athletes and sponsored all the teams in China's new pro basketball league in 1995. But the company had its share of horror stories too, struggling with production problems (gray sneakers instead of white), rampant knock-offs, then criticism that it was exploiting Chinese labor. Cracking the market in a big way seemed impossible. Why would the Chinese consumer spend so much--twice the average monthly salary back in the late 1990s--on a pair of sneakers...
Sports simply wasn't a factor in a country where, since the days of Confucius, education levels and test scores dictated success. So Nike executives set themselves a potentially quixotic challenge: to change China's culture. Recalls Terry Rhoads, then director of sports marketing for Nike in China: "We thought, 'We won't get anything if they don't play sports.'" A Chinese speaker, Rhoads saw basketball as Nike's ticket. He donated equipment to Shanghai's high schools and paid them to open their basketball courts to the public after hours. He put together three-on-three tournaments...
...those sneakers brought with them a lot more than just basketball. Nike gambled that the new middle class, now some 40 million people who make an average of $8,500 a year for a family of three, was developing a whole new set of values, centered on individualism. Nike unabashedly made American culture its selling point, with ads that challenge China's traditional, group-oriented ethos. This year the company released Internet teaser clips showing a faceless but Asian-looking high school basketball player shaking-and-baking his way through a defense. It was timed to coincide with Nike tournaments...