Sneakernomics Revisited

Dez Morgan, we meet again so soon. How’s it going? Not bad at all, Skip. I have to say that the weather here in Changsha is certainly warmer than it was in Scotland on my recent visit there. Well, that’s good to hear. Japan is warming up too, which I am very happy about. Weather can be such a limiting factor in a person’s life, especially when it comes to getting out of the house and doing things outside. True enough.

And as I told you the last time we met, I want to start leading a healthier life and get a bit fitter. So, I’m getting outdoors and enjoying the warmer weather. I take it you’ve been taking walks or going for rides on that bike of yours. I have been out cycling several times, but before I can really go walking I need to get myself a new pair of trainers. Trainers? Otherwise called ‘sneakers’ in American English.

Well, whatever you call them — ‘sneakers’, ‘trainers’ — I really need to get a new pair for the extended walks I’m planning on taking. You know, here in Tokyo, ‘sneakers’ have become regular, everyday business wear. Is that right? Yes. It’s quite common for people to wear them in the office. In fact, I think for a lot of people, sneakers have become very much a fashion statement. Well call me old school, but I will be wearing mine for walking. Yeah, that doesn’t surprise me.

But I know what you mean about people wearing sneakers for all sorts of occasions, not just for running or sports. The market is huge. Even in China? I’m glad you asked. Oh, why’s that? Well, with me in the market for a new pair of trainers, I had the sportswear market on my mind. I thought it would be a good business sector to report on today. Haven’t we reported on this topic before? Yes, we have. But that was way back in February 2019 — D2B 154: Sneakernomics. Over six years ago.

Yeah, I suppose the landscape has changed quite a bit since then. It makes sense to revisit this topic. I agree. So let’s do it, let’s get D2B … Down to Business with Sneakernomics revisited. It might be a good idea to give us a bit of background. For example, who are the biggest players in the sportswear market? That’s a good place to start. Nike still leads the global sportswear market with 18.7% market share, but that is down from 20.1 in 2024.

Adidas holds 11.3% of the market, slightly up from 2024. After that comes the Chinese brand Anta Sports Group with 11.1, followed by a relatively new player, Lululemon with 8.1% market share, and then Puma with 5.3%. Hmm, well that’s an extensive rundown. So the two biggest brands are still on top, but they do seem to be under some pressure. Yes. They remain the dominant players, but they do not look quite as secure as they once did. Nike in particular seems to be facing headwinds.

That does seem to be true. That’s surprising. What is behind that? One argument comes from Mike Sykes, editor of the sneaker newsletter The Kicks You Wear. He argues that Nike was at its most innovative between 2000 and 2015, but since then it’s lost some of its edge. Lost some of its edge? What’s the reason for that? Well, one view is that Nike moved too far towards celebrity and fashion culture, and a bit too far away from pure sports performance.

Collaborations with figures like American rapper and consumer influencer Travis Scott and late designer Virgil Abloh kept the brand culturally relevant of course, but they may also have pulled Nike away from the core identity that made it so strong in the first place. So what you are really saying is that Nike may have lost its way a little — that at its heart it's a sportswear company, not a fashion label. That is very well put.

Nike may have become a little too focused on being fashionable, and not focused enough on being innovative in the sportswear sense. And if memory serves me, basketball player LeBron James was also at his height during that earlier period. He was. He signed a lifetime sponsorship deal with Nike in 2015, and although he’s still playing, he’s now much closer to the end of his career than he is at the beginning. So in a way, he also represents that earlier era when Nike felt especially dominant.

And Adidas went down a similar road, didn’t they? They had that partnership with Kanye West — or Ye, as he is now known. Yes, they did. Adidas partnered with him in 2013, expanded their relationship in 2015, but then dissolved it by 2022. So both Nike and Adidas, in different ways, became closely tied to celebrity culture and fashion trends. Would you say Nike’s sales have fallen simply because it lost focus?

I’d say yes and no. That may be part of the story, but it’s definitely not the whole story. Go on. While Nike has maintained slight growth in North America, Europe, and Africa, their sales have fallen 17% in one key market. And I’m guessing that would be Mainland China. And you would be correct. China is a very important part of this story.

Of course, there is the cyclical issue that China is in a bit of a slump right now, with falling real estate prices, high youth unemployment, and weak consumer spending. But I think it may go a bit deeper than that. Mm, what do you mean? It’s not just that people have less money to spend — it’s that they have become much more intentional about which brands get their remaining hard earned yuan. They’re looking for more than just a logo, they’re looking for cultural resonance.

So, it’s a shift in loyalty. Are you talking about rising nationalism and a growing ‘buy local’ sentiment? There’s a specific name for it — Guochao, or the ‘National Trend’. It’s this massive movement where younger Chinese consumers are prioritizing products that blend modern tech with traditional Chinese design. It has turned ‘Made in China’ from a budget label into a badge of pride. Hm. And I assume that’s showing up in sales numbers? It really is.

Looking at the two domestic leaders, Anta Sports and Li-Ning, the story is quite interesting. On one hand Anta’s revenue surged by over 13% in 2025, hitting a record CN¥ 80 billion. While on the other hand, Li-Ning has been a bit more flat as it struggles to keep up with that momentum. That tells me there is more to it than just being a Chinese brand. Yeah, it’s not so cut and dry. Regardless, there does seem to be a trend towards buying domestic products.

Clearly. Does that mean this Guochao, this ‘National Trend’ is hurting the American giants? You took the words right out of my mouth. There’s indeed a sense that anti-American feelings are pushing Chinese consumers away from brands like Nike, whose market share in the country has slipped to around 18%. A result of consumers buying Anta Sports. And if you want more evidence — sales of iPhones and Tesla have been facing headwinds in China as well.

While Adidas — a German company — actually saw its sales in China grow by 13% last year. So, foreign brands are not being rejected equally. Precisely. The data suggests that sentiment is more anti-American than it is anti-foreign. Interesting. But putting the Chinese market aside, big names like Nike are not exactly enjoying smooth sailing in the rest of the world either, are they?

No, they aren’t — and that brings us to another important part of the story. While established giants have been struggling to maintain momentum, newer brands like Hoka and On have been taking market share from the bigger players. Hoka? On? I have to admit, I have not heard of either of those brands. Hoka is a California-based company, while On is Swiss. On has none other than Roger Federer as an investor and brand ambassador. So what is so special about these two companies?

They both seem to have established very clear identities and more importantly stuck with them. Rather than chasing every new trend, they have developed their own look and their own performance story, and then waited for the market to come to them. Hm. In contrast to Nike and Adidas, who may have focused too much on being trendy. Exactly. Hoka, for example, began with the mindset of making shoes for runners. Their products were performance-driven, but also extremely comfortable.

That combination of quality and comfort helped Hoka move from the running world into the mainstream. And On followed a similar path? From what I can see, yes. They also built a strong identity around a distinct design. Their shoes were chunkier and less sleek than the look Nike had popularized, but they stuck with it. And then, over time, what once looked uncool started to look cool. So, in other words, a victory for the so-called ‘Dad sneaker’. The Dad sneaker? What is a Dad sneaker?

Er, you know, it’s that kind of chunky-soled shoe that younger people once mocked as unfashionable and associated with middle-aged men. But now they’re quite popular. I did not know that they were called that. Okay, taking a step back, what we’re really seeing is a more fragmented market. The big players are still big, but they’re no longer controlling the conversation in quite the same way. That’s right.

And when markets become more competitive and fragmented, companies don’t just respond with new products. They also look to deals and partnerships. Which brings us to the Anta Sports Group story. The Chinese sportswear company you mentioned earlier. Yes. Anta is set to acquire a 29% stake in Puma for €1.5 billion. Just below the 30% threshold that would have forced Anta to announce a full takeover. Why would they want to avoid having to do that?

At 29%, Anta will become Puma’s largest single shareholder and have a strong voice on the board, while avoiding the scrutiny that can come with antitrust and foreign-investment reviews. Of course. A large minority stake is much easier to get approved than a full takeover. That’s right. And this could prove to be a very useful partnership for both sides. Meaning Anta’s experience in the Chinese market could help Puma become more successful there. That is one of the hoped-for outcomes.

And of course, the reverse is true. Anta is looking to gain greater exposure to markets outside of China through its connection with Puma. The deal would also give Anta more exposure to football and motorsports, two areas where Puma has a much stronger presence. I suppose not everyone is convinced though. No. There are skeptics.

Puma’s sales were down 10.5% in 2025, and some experts see this as a sign of poor management and think Anta is taking a big financial risk that Puma can turn things around. Well, that is a legitimate concern. Time will tell. It always does. In any case, it’s clear that the sportswear landscape is changing.

Legacy giants like Nike and Adidas are facing more pressure from challenger brands like Hoka and On, and Chinese firms like Anta are becoming more influential not just at home, but globally as well. In other words, this is no longer a market shaped by just one or two dominant names. Exactly. It’s a far more competitive and complicated landscape than it was when we first covered this topic way back in 2019.

And on that note, I think it is time for us to get D2V … Down to Vocabulary. The first item on our D2V list is the adjective ‘old school’. When we call someone or something ‘old school, we mean they have a more traditional way of thinking or doing things. And depending on the context, it can be either positive or negative. Something being ‘old school’ suggests something a bit outdated. But other times it suggests that someone values the more classic or traditional way of doing things.

Dez used this expression in the introduction of today’s episode when we were talking about how sneakers — or trainers, if you prefer, were being worn in business and social situations. He said that he might be old school, but would only be wearing his trainers for walking. In other words, I was saying that I think of sneakers in the more traditional way — something you use for exercising or walking, rather than as a fashion item or everyday office wear.

And that made perfect sense in the context of our conversation. How could ‘old-school’ be used in a business context, Dez? Er, in a business context, you might hear something like this in a meeting: “Our sales director is a bit old school — he still prefers face-to-face client meetings over video calls and automated outreach”. A very realistic example. I know several people who are old school in that way. Moving on, next on our D2V list is the verb phrase ‘to face headwinds’.

When a company or industry, or market faces headwinds, it means it’s dealing with problems or pressures that make progress difficult. You hear this expression all the time in business settings. The image comes from sailing, or flying into a strong wind. When you are moving into a headwind, it takes more effort and more energy to keep moving forward.

In today’s episode, when we were talking about Nike’s position in the global sportswear market, Skip commented that Nike in particular seemed to be facing headwinds. In other words, he was saying that Nike was dealing with business conditions that were making growth more difficult. And later in the report, Dez used the same expression again when he said that sales of iPhones and Tesla had also faced headwinds in China.

In both cases, we were talking about companies experiencing difficulties in the market. The idea is not that these companies were failing, but that conditions had become more difficult and were pushing against them. Much like sailing into the wind. How might we use this in a B2B context, Skip?

You might hear a salesperson say something like this when explaining why his department didn’t meet the quarterly sales target: “We faced headwinds in Southeast Asia because two major clients delayed their capital investment”. Oh, that’s a strong example. It shows how the expression is often used when external conditions, or conditions outside your control, are making business more difficult. And that is why ‘face headwinds’ is such a useful expression in business English. What's our next word?

Let’s look at the noun ‘momentum’. In general, momentum means the force or energy that keeps something moving forward. In a business context, momentum refers to progress or success that builds up over time and helps a company, a project, or a trend keep moving in a positive direction. It’s common to hear phrases like ‘gain momentum’, ‘build momentum’, and ‘lose momentum’. If a company gains or builds momentum, it’s starting to move forward strongly.

If it loses momentum, then progress begins to slow down. In today’s episode, Dez used this word when he was comparing Anta Sports with Li-Ning. He said that Anta’s revenue had surged in 2025, while Li-Ning struggled to keep up with that momentum. In other words, Anta was making strong progress in the market, while Li-Ning was finding it difficult to match that same growth and forward momentum. Here, ‘momentum’ referred to Anta’s strong business performance and its continuing forward progress.

How might we use ‘momentum’ in a professional context, Skip? You might hear this in a sales meeting: "We have built strong momentum in Japan over the last 18 months or so, so right now is the time to open a second office in Osaka". Great example. It shows how ‘momentum’ is often used when a company has had some success and wants to build on it. Exactly. But once a business has gained momentum, the challenge is to maintain it. What’s next on the list?

The final item on our D2V list is the adjective ‘fragmented’. If something is fragmented, it is broken into many smaller parts rather than being a whole or in one piece. In business, we often use this word to describe a market or an industry. Right. A fragmented market is one where there are many competitors, and no single company has complete control. And that is exactly how this word was used in today’s episode.

At one point, Skip said that what we were seeing is a more fragmented sportswear market. He was saying that the big sportswear brands are still important, but they are not the only players in the market. In other words, the market has become more divided among a larger number of brands. Market share is spread more widely now, instead of being concentrated in just a few dominant companies. Can you give us another example, Dez?

Sure. The market for language-learning apps is highly fragmented, so it’s difficult for any one company to build a dominant position. Duolingo, Babbel, Rosetta Stone, iTalki, and the list just goes on and on. Tell me about it. Call me old school, but if I were learning a new language I would simply go with an Anki flashcard system and podcasts.

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I’m still not convinced I’m ready to start wearing sneakers to a business meeting, but I have to admit, the market is a lot more interesting than I realized. Well, whether you wear trainers for fashion or just for walking, there's clearly a lot more going on in this industry than most people think. There certainly is. D2B Members and Apple Podcasts subscribers — the Bonus Down to Vocabulary episode for today’s report will be released within the next few days or so.

In that bonus episode, we will break down five more useful words and expressions from today’s report: landscape, go down the same road, to be cut and dry, to mock, and the noun scrutiny. A very useful set of terms for talking about competition, market trends, and business strategy. If you are a D2B Member, make sure you have copied your members-only podcast feed URL from your account page on the D2B website and pasted it into the podcast app of your choice.

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