TAICANG, Jiangsu - Nike Inc unveiled its biggest logistics center in Asia in Jiangsu province on Tuesday, as the US sportswear and equipment maker envisages rapid growth in its second-biggest market worldwide.
The 200,000 square-meter logistics center in the city of Taicang, Jiangsu province, is the company's first such facility in China and the sixth worldwide, after centers in Belgium, Canada, Japan, South Korea and the United States. It will handle all inbound and outbound products, including clothing, shoes and sports equipment, for China.
Benefiting from the company's international supply chain experience, the center will reduce distribution time and optimize the overall logistics process, ensuring faster delivery of products to consumers in China, said Hans van Alebeek, vice-president of global operations and technology for Nike.
The opening of the facility fits in with the company's plans to expand its revenues in China.
"I am delighted to add the China logistics center to our global distribution network with the opportunity and commitment to stay closer to our Chinese consumers," said Craig Cheek, Nike's vice-president and general manager in China.
"The new center represents Nike's commitment to doing business in China. We continue to drive towards our goal of doubling our revenue in the country by 2015."
In the financial quarter that ended on Nov 30, Nike's operating income reached $482 million, up 20 percent from a year earlier, netting $174 million before tax, the company said in December.
Nike has said it plans to broaden distribution of its lower-priced products in a move to target consumers in China's smaller cities to boost market share and revenue as competition in big cities intensifies.
Charlie Denson, Nike's brand president, said in December that there is still plenty of room for growth in China, given consumers' strong demand for Nike's soccer and basketball products, and the company will "continue to look at third- and fourth-tier cities in China for sustained growth".
However, to succeed in smaller cities where consumers have less purchasing power, compared with those in Beijing and Shanghai, Nike may have to lower its prices.
Most Nike sports shoes cost between 500 yuan ($76) and 1,500 yuan in China. But UBS Securities said in a report in June that the top-selling sports shoes in the nation's second- and third-tier cities are priced between 170 and 250 yuan.
