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Nike Swooshes Its Old Ad Agency for Fresh Start

Sporting goods giant Nike has switched its ad agency in China to Wieden+Kennedy from WPP Group Plc's JWT unit, which held the account for eight years, a source familiar with the situation said yesterday.

In a pitch held by Nike earlier this month, W+K beat JWT, Publicis and other five contenders to snatch the deal from JWT, the source said.

Nike has spent some US$20 million in advertising in China this year and is set to pour in even more ahead of the 2008 Beijing Olympics.

Nike said yesterday it is still working on the evaluation process and would not comment further at this stage.

"We want to select a strong communications partner who can produce the work that captures the spirit of the Nike brand and deliver it in a way that is connected with Chinese consumers over the long term," the company said in an e-mail to Shanghai Daily.

But JWT, which produced the first commercial for Nike in 1997 when the sports gear giant entered the Chinese market, confirmed Nike's decision in an e-mail reply.

JWT said the change will not have a significant effect on its China business.

The merger of Adidas-Salomon AG and Reebok International Ltd will push Nike, No. 1 in the China market at present, to gear up with more aggressive marketing and advertising, industry insiders said.

Nike is estimated to hold a leading 30 percent market share in China, well above Adidas' 19 percent and Reebok's 8 percent. China is Nike's fastest-growing market in Asia and the second biggest in the region after Japan.

Adidas and Reebok are in a strong position to challenge Nike, however, through the cost efficiencies and marketing synergies brought by the merger, said Li Xin, an analyst with Beijing-based All-Star Sports International, a market research company specializing in the sports industry.

The US$3.8 billion acquisition gives Adidas endorsement contracts for a host of the sporting world's top stars, including the 2.28-meter Shanghai native Yao Ming, a super idol among millions of Chinese sports fans.

Adidas, the world's second-biggest athletic-shoes and apparel maker, said it plans to open 40 shops a month in China, a move that is expected to help the company more than double its sales locations to 4,000 by 2008.

(Shanghai Daily November 25, 2005)

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