Stephen Curry will be Joined by Under Armour Teammates Joel Embiid, Dennis Smith Jr. and Mo Bamba
Source: UA BASKETBALL TO TAKE ON ASIA THIS SUMMER
The trade war has done one thing, in my opinion, to the sneaker market in the U.S. It’s shown that American brands have a better grasp on what they need to improve the bottom line for their companies. The United States may be the largest market, but by my own sales the United States market has reached its peak. For brands to continue moving forward in an attempt to satisfy their shareholders, every brand that operates as a performance company will have to gain a stronger foundation in Asia where basketball is by far the fastest growing sport.
Under Armour in particular has to conquer Asia as they aren’t capable of truly playing in the fashion driven culture around footwear in the U.S. UA is seeing considerable growth in Asia and it’s helping to overcome issues here at home. There is a constant dialogue around basketball shoes not selling anymore or being in fashion. Basketball in the U.S. as a sport hit its peak during the Dream Team and Jordan era. If anyone wondering why basketball sales have slowed since the mid 2000s, you would have to be a person who played or coached to understand the shift in youth sports. Basketball was an aspirational sport. Today due to the corruption and specialization in youth sports, an entire generation of kids are not interested in becoming the next Steph Curry in the U.S. I wrote about that here:
Under Armour in Q1 2019 stated,
- North America revenue decreased 3 percent to $843 million and the international business increased 12 percent to $328 million (up 17 percent currency neutral), representing 27 percent of total revenue. Within the international business, revenue was up 3 percent in EMEA (up 9 percent currency neutral), up 25 percent in Asia-Pacific (up 30 percent currency neutral), and up 6 percent in Latin America (up 10 percent currency neutral).
Those North America numbers aren’t going to improve for UA as the entire market in the U.S. is going to be pushed if the tariffs are implemented. That’s not really the biggest issue facing U.S. brands. The disruption of sneaker retail is under assault by third party platforms and no one understands why this is happening and it isn’t being discussed. When the third party issue is combined with a disinterest in performance products this is an issue that shapes all sneaker companies as performance informs fashion, but more important, third party platforms are pushing price points down meaning that brands capable of creating fashion forward models based on more expensive technical designs will be able to keep the customer interested. Under Armour doesn’t have this option. I hope that’s clear.
If it isn’t clear reach out and I’ll explain it in a much more detailed manner. Under Armour realizes that their growth in the international market, 25% in Asia, is a rallying point. Hence for the first time their Asia tour won’t just be Steph Curry. The brand is taking the time to put together a roster of their best athletes from the NBA.
2019 Under Armour Basketball Asia Tour Dates
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Tokyo, Japan: June 22-23
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Shenzhen, China: June 24-25
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Beijing, China: June 26-27
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Shanghai, China: June 28-29
As entertainment for youth in the U.S. becomes more fractured, brands will have to target countries where professional basketball continues to carry weight. The problem is while international markets respect the game, at home the energy placed into basketball and basketball footwear is up against growing options for kids. In today’s U.S. market kids can get famous by dancing in a video on YouTube. A kid can go viral by creating a skit on Instagram. A kid can earn a million dollars playing video games and livestreaming their gameplay. In an Instagram world you can attract a 100,000 followers and be paid by brands because of your pictures. 10 years ago these things weren’t options. Basketball still was aspirational, but today that isn’t the case. Internationally, however, fans are still fanatics. Under Armour’s decision to increase their effort in Asia is a sign that they understand what they are and in my opinion that’s a good thing.