The Chinese imitation of Air Jordan has become a headache for Nike
The Chinese company Qiaodan, featuring a logo and name strikingly similar to Michael Jordan's brand, continues to pose a significant challenge to Nike in China. Nike's sales in the country plummeted by 17% in the last quarter.
Above the entrance to the sprawling corporate headquarters of Qiaodan in the city of Xiamen in China hangs the company's red logo, featuring the silhouette of an athlete — a logo that certainly reminds one of something familiar. The bent legs represent a dribbling motion, while his left hand is extended to the side, holding what looks like a basketball. Moreover, the name of the company behind the logo — Qiaodan — is a phonetic copy in Chinese of one of the most well-known brands in the sports world: Air Jordan.
The company was founded 26 years ago, and a significant portion of the time that has passed since has been dedicated to a legal battle with Michael Jordan, the basketball legend who served as the inspiration behind the Chinese company's branding. In 2020, it won a victory when the court ruled that it had violated only one component of Jordan's rights to his name. The sportswear company is now a full-fledged nationwide retail chain with more than 6,000 branches across the country. At a branch in the city of Yueyang, high-top sneakers in the style of Air Jordan are sold for 339 yuan (50 dollars).
In 2020, Qiaodan acquired the rights in China to the veteran football brand Umbro, which was previously owned by Nike, for 62.5 million dollars. Since then, it has begun exploring expansion opportunities outside the country, including by opening a store in Vietnam. Qiaodan is part of a group of increasingly sophisticated brands based in Xiamen that are increasing the pressure on Nike in its most important international market. Other competitors include Anta Sports, 361 Degrees, and XTEP.
"Each of these companies is sharpening its knife more every day," said Joshua Perlman, Greater China managing director at Authentic Brands. "It adds to the fierce competition that Nike has in all areas." So far, it seems that Nike does not have too many solutions for this crowded competition. Its sales in China plummeted by 17% in the last quarter that ended in June, marking the eighth consecutive quarter of declining sales.
The rise of Chinese sports brands reflects a trend seen in many other industries, such as electric vehicles, where local manufacturers like BYD have established a dominant position. Wei Kan, a former Nike employee in China and founder of the consulting firm Conduit Asia, describes the strengthening of Qiaodan as a "constant change" in the market. The company's revenues in 2021 stood at 5.8 billion yuan (850 million dollars).
On the Chinese online trading platform Tmall, Qiaodan's annual sales stand at 500 million yuan, while Nike's revenues on the platform stand at 3.4 billion dollars. The company continues to expand its manufacturing footprint, opening new sites in Henan and Chongqing.
Legal disputes between Jordan and Qiaodan began at the latest in 2012. Even while lawsuits were filed against it, Qiaodan took legal steps to protect its brand rights. In 2020, the company unsuccessfully sued Amazon for using the Chinese name Qiaodan on pages that sold Air Jordan products. Meanwhile, Nike itself is facing a difficult period, reporting a 16% drop in global sales of the Jordan brand in the last quarter.
Qiaodan has tried several times unsuccessfully to go public in China. Wei Kan estimates that the legal disputes with Jordan damaged the IPO chances. According to him, Chinese consumers today "value authenticity," and local companies "know how to build the brand, they know how to manage the product portfolio and the cycles, and they have strong ties with the local community."
