Marketing the mideast.

(From Arabies Trends)

Byline: Guy Brown

It was a very good year for Nike, the Oregon-based athletic footwear and apparel maker that reported revenues of $10.7 billion in 2003. Germany's Adidas-Salomon, too, had a strong 12 months, recording group sales of over $7.5 billion. During the same period, Puma, another German brand, reported sales in excess of $1.5 billion. It was also a good year for Reebok International, based in Canton, Massachusetts, which saw revenues rise to $843 million and its stock climb by more than 23 percent.

According to the Sporting Goods Manufacturers Association (SGMA), global sneaker sales are estimated to be worth over $15 billion annually. The five dominant categories are running shoes, basketball, cross-training, walking and casual/retro. "Sports shoes are the single most important product category for the profitability of athletic shoe and apparel brands," says John O'Neil, who is in charge of New Balance distributor markets. Most major brands have larger shoe than apparel businesses, mostly because margins are better and inventory lower. Robert J. Corliss, president and CEO of The Athlete's Foot Group, says footwear typically drives the rest of any sports brand.

Ball games. Worldwide, Nike is far and away the leader. In 2002, the last year for which figures are available, Nike held a 34.1 percent share of the international market, more than double second-place Adidas, at 16.5 percent. In the Middle East, however, the situation is essentially reversed, mostly for a very simply reason: Nike is primarily associated with basketball and the NBA, while Adidas's focus is football and stars like France's Zinedine Zidane. In the Middle East, of course, hardly anyone follows the NBA, while almost everyone's a fan of the beautiful game.

Ellen van Meerendonk, at Adidas-Salomon in Dubai, insists that while the German brand is the clear market leader in the region, "the competition in the Middle East does not differ from the competition we face on a global level. We consider Nike and Reebok to be our main competitors in the region."

It's worth noting that the Adidas's emerging markets headquarters - covering a vast region stretching from Russia to Namibia - is in Dubai. By comparison, global leader Nike does not have a corporate presence in any Arab country. And unlike Nike and the rest of the competition, Adidas is working hard to cement its presence in the region.