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Discretionary consumer, what’s your brand of choice? Upmarket Louis Vuitton or bargain basement Best and Less? Coke or Pepsi, Ford or Holden? When it comes to runners, or sneakers as Americans like to say, the choice for very many people in the world comes down to simply one or other of the big two – Adidas or Nike? Staunch rivals when it comes to the single-minded pursuit of an ever greater share of the world market in casual sportswear, the two companies have distinctly different origin stories. Adidas came into existence first, starting up in tiny Hezogenaurach, West Germany, in 1949, the business was the brainchild of sports enthusiast Adolf Dassler. Earlier Dassler had gifted American track and field star Jesse Owens with a pair of his pre-Adidas shoes at the 1936 Berlin Olympics. Later, he kitted out the winning West German football team at the 1954 World Cup with Addidas gear.
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| The sneaker wars |
Nike on the other hand has its roots in North America, founded in Beaverton, Oregon, in 1964 by college track athlete–cum–accountant Phil Knight and his running coach at Oregon University Bill Bowerman. Originally, Nike distributed runners in the US for another company from Japan (which eventually became ASICS), but the launch of the Nike Cortez (designed by Bowerman) gave the company its first best-selling sneaker in 1971 (the Cortez’s big leap-ahead for the industry was in providing American distance runners with “a level of cushion previously unknown, “ ‘The history of the Cortez’, 29th May 2024, www.nike.com).
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| The Cortez |
Nomenclature: The name “Adidas” Dassler concocted by adding an extra “d” on to his own nickname “Adi” and combining it with the first syllable of his family name, “das”. The founders of Nike went for something more classical Greek. Niké in Greek mythology was the goddess of victory who championed triumph in war, art and athletic pursuits…so, quite a positive role model you might say for an organisation aspiring to reach the apex of the business world in its field.
A tale of two logos: Both Adidas (bearing the distinctive triple stripe design) and Nike (identified by the swoosh stroke representing the wing of Niké, a symbol of speed, movement, power and motivation) possess billion dollar logos🅰︎, making them instantly recognisable cultural icons whose omnipresence allows them to transcend the realm of sportswear and casual fashion.
Consumers are certainly divided in their opinions of which runner is best…both brands have their loyal and dedicated followers – theNike tribe v the Adidas tribe (cf. Apple/Samsung in mobile phones). If we go by the criteria of market share, Nike is streets ahead of its rival, in the US and thus worldwide, although Adidas’ base in the European market remains its stronghold🅱︎.
Both manufacturers have a clear GOAT sports shoe – for Adidas it’s probably the Y-3 series with its revolutionary boost technology, whereas with Nike its hard to top the Air Jordan, the shoe’s massive popularity rests with its iconic status, primarily down to the huge impact and influential pulling-power of the super-athlete hired to spruik the sneaker that’s named after him – Michael Jordan. Clever brand marketing strategy has made ownership of the shoe a status symbol, a “lifestyle sneaker” even (cf. the collectibility of an exclusive Burberry or Gucci handbag), driving up the price (and resale value).
With Nike and Adidas in poll position, where does that leave PUMA? In third place actually when the end-of financial-year profits are counted. The PUMA story interestingly brings us back to the name Dassler and Adidas. Prior to founding Adidas Adolf had been in the shoe business with his older brother Rudolf. The two brothers—in a story remarkably reminiscent of those other two German business titans, the two Albrecht brothers who founded supermarket giant Aldi—had a falling-out over strategies and the direction of the business. And so, like Theo and Karl of Aldi fame, Adolf and Rudolf went their separate ways in business. Rudolf Dassler founded PUMA (in 1948, a year earlier than Adidas) in Hezogenaurach, bestowing upon that small German town the bragging rights of having produced two or the three leading sports shoe-makers in the world.
Soiling their copybook: The other side to the phenomenal success of both companies sustained over a very long time in mass-selling a widening range of merchandise and their ability to penetrate the culture of consumers big time, paints a different picture…other areas of the way Adidas and Nike do business fall well short of a pass mark in propriety. Sustainability is one, A and N have talked vocally about being committed to sustainability, reducing their carbon footprints etc but so far, the rhetoric has not been matched by any real meaningful action by them towards those goals. More concerningly, there are glaring ethical issues, the result of Nike and Adidas having outsourced work to Asia to take advantage of cheap labour and laxer working conditions in those countries. Workers in these two organisations’ factories in Bangladesh, Indonesia, Vietnam, the Philippines, Cambodia, China, etc continue to be grossly underpaid (below minimum or living wage), compelled to work 10-hour shifts x 6 days, exposed to unsafe workplaces with appalling conditions. This can be palpably demonstrated by data which shows that worker exploitation by these two massive profit-making sportswear giants is not diminishing. Things are getting worse for Third World employees of Nike and Adidas, the share of production costs of N and A shoes “that end up in a worker’s pocket is now a staggering 30 percent less than in the early 1990s” (according to a Clean Clothes Campaign report, 2018, CCC, www.reuters.com) 🅒.
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| The Asian sweatshop |
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🅰︎ Carolyn Davidson, the trainee graphic designer who devised the logo, as an employee of Nike received just $35 for inventing the iconic swoosh. However later Nike went some way to making amends for this anomaly by giving her 500 shares of the company’s stock, now worth more than $1 million
🅱︎ Adidas took over sportswear competitor Reebok in 2005 at a cost of $3 Bn. This acquisition didn’t help the German company bridge the gap with Nike as Reebok’s subsequent underperformance led Adidas to offload Reebok in 2021 for a considerable loss.
🅒 in the early 2000s Nike refused to investigate the conditions of East Asian sweatshops which it sub-contracted work out to…only after international pressure did the company agree to start auditing them
