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If I'm buying shoes that were made in the third world for minimal cost then branding is not a guarantee of quality that it once was. This has been the case for at least the past ten years but it goes to show that if you have a well-known brand you can keep milking it for a long time before the market turns against you.
In the fresh Portuguese democracy from 70's and early 80's many of us, my family included, could mostly afford the pirated stuff from street bazars.

Being able to save money and be able to buy a proper brand at a regular shop, even if on sales, it was a big deal, and many times reserved for special occasions like a birthday, Christmas, some achievement at school.

Nowadays I would not think twice of just ordering whatever from Temu and friends, other than if they actually would fit my size.

The west has done this to ourselves, devaluing any kind of product in the search of the cheapest manufacturing possible, while keeping the push for exponential profit margins.

That being the case, why not buy directly to the same factories.

While a brand isn't a guarantee of quality, brands can work with their manufacture to hit the level of material and assembly quality they need for their products. The same manufacture will likely produce different products with very different results and costs.
If you're talking about streetware then sure, quality doesn't matter. The shoes only have to last until the fashion trends change in a few months. And fashion conscious consumers will tolerate uncomfortable shoes in order to look good.

But the performance athletic shoe market is completely different. Real athletes still buy a lot of expensive shoes and they'll absolutely switch brands the moment they notice a drop in quality. I've seen this happen among my friends. No shoe company can ride on brand equity for long in that market.

Somewhat related, in a lot of those developing countries, fakes are so prolific that they become meaningless.

When you go to the market to buy socks, it's a little difficult not to find socks without logos like nike, addidas, gucci, prada, etc.

If you wear the real deal, everyone will think it's fake, or perhaps "worse", they will think nothing of it.

You can buy high quality fakes, or low quality. Or even the real deal, straight from the factory, just without the final stamp of approval.

> it goes to show that if you have a well-known brand you can keep milking it for a long time before the market turns against you

Which means it is always more profitable in the short term to cut costs by reducing quality but keeping the high prices.

It also means it is often more profitable even taking the long term into account because you are better off getting the money sooner (and being able to reinvest it elsewhere) - "the time value of money".

I'm really excited about Nike's self driving shoes though
Except that the case made in the link is not that the quality declined.

Are the other brands that took some Nike's market share not "made in the third world with minimal cost"?

That might be all true, but is also true, 10 years ago people wore sport shirts everywhere. Today not anymore. More the opposite, if there is a big logo, people don't want it. Luxury brands have a kind the same problem at moment. Also all, special young people, can spend money just once. An expensive phone, best mobile abo, Netflix, ..., for girls daily MakeUp .., also people tend do sport just for themself. All kind Superstars are gone, in film, in sport, in music. Everyone knew people like Federer, Nadal, Bolt, Lance Armstrong. Today even the top athletes are just a kind of faceless winners.
Anecdotally I also noticed a shift in shoe buying among my peer group (25-39 year olds) in that they take foot health and comfort more seriously and do more research on that front.

My podiatrist has seen a huge uptick in younger patients since 2022. Generally he’s surprised at the age influx is mostly younger.

He only sells 3 brands of shoe depending on fit, need, size etc. Brooks, Hoka, and New Balance. These were traditionally seen as “older persons” shoe brands, especially Brooks.

Now they’re everywhere

I see a lot of kids just wearing throw away Temu shirts with weird slogans or funny graphics. They get them for a few bucks and wear them through their paces because they will last as long as Teens need them to last, which is one school year.
In the past shared media like TV and radio had kind of a forced shared social reality that covered large areas, but typically up to the size of nation states and maybe their allies.

The internet eventually broke that. Social media allows people that don't like sports, for example, to cut their exposure to sports dramatically. At the same time it increases exposure to more random things. There is still big name advertising, but it's not the same as my youth where a stadium would be covered in the same 4 ads.

Roger Federer didn’t leave Nike because On was making better running shoes (Federer is a tennis player after all). Nike was trying to lowball him and he walked away.
Not a single mention of the word fashion. Here in the UK, Adidas Sambas (and similar models like Gazelles and Spezials) have been everywhere for the last couple of years, particularly amongst women and girls, who often have two or more pairs, making the most of the huge number of colours - sorry, “colourways” - available. This is purely for daily wear, btw, rather than athletic/gym use.
those are trends. prior to that, it was nike airforces. A business like Nike can't build their business solely on trends. Trends are cyclical, they can bring you massive windfalls, or bankrupt you.

Nike was a sports shoe company that forgot it was a sports company and started acting like it was a pure consumer goods company, leaving itself at the whims of fashion trends.

You're right, fashion cycles deserve more attention. I deliberately focused on Nike's structural problems, but you can't ignore that Adidas caught a wave with the Samba revival. The difference is Nike used to be good at riding those cycles too. Air Force 1s, Dunks, Jordans. What's changed is their ability to manufacture and sustain cultural relevance alongside performance credibility. Adidas found a moment; Nike lost the machinery that used to generate those moments reliably.
> The real problem isn’t that athlete deals are more expensive today. It’s that Nike lost athletes because it was no longer the clear leader in product development. Federer left because On was developing better running shoes.

This feels like a really bald assertion.

Ya this isn't true by any objective measure.

Two pair of shoes on the top rankings: https://runrepeat.com/catalog/running-shoes

The top 10 men's at the Boston Marathon were wearing Adidas, Nike and Asics and Puma.

On shoes rose up because they went grassroots and built "technology" that seemingly performed better and didn't make massive swings in design changes year over year (which is what Nike, Saucony, etc. do and its really annoying for most runners who get comfortable in a shoe). This is like saying Warby Parker made "technically" better glasses - they just made the experience of buying the item better (which is valuable btw).

Federer isn't a runner. There's a huge difference between tennis and running shoes.
Federer has a 3% ownership stake. That puts his skin in the game. He honestly got too little of a stake for his brand.

If anything, once athletes wake up to the value prop, I'd expect for more brands emerging in the future with athletes taking more control or even owning the brands outright.

It works like gang busters for celebrities launching fashion and cosmetics companies. It's turned dozens of them into billionaires in the last decade - more value creation than their acting or music careers:

Skims (Kim Kardashian), Fenty (Rihanna), Rare Beauty (Selena Gomez), etc. etc.

These companies have $500M ARR+ and aren't even a decade old.

Celebrities are the ideal launching platform for new consumer brands. When your customer spends 30% of their day thinking about celebrities, you've already won them from a marketing perspective.

My wife pays attention to the Kardashians, Hailey Bieber, Millie Bobby Brown, and the like. She knows instantly the moment there's some pop up for one of these brands. A large percentage of women her age do. It's practically the function of Instagram and TikTok to get the message out.

This is huge. Brands anchored by influencers and celebrities capture public attention and consumers have an in-built desire to purchase and support those products.

Celebs constantly show up on social feeds. It's not just free advertising. It's almost like a miasma where consumers live in the personality and the brand. People that follow celebs know about this stuff as much as you or I know about Nvidia or chip shortages. They're as loyal as Nintendo or Valve fans.

Nike has no way to get exposure to this. They have no equity left to give. They could make rev split deals like the Nike Jordan line, but that doesn't come with true ownership or control. The celeb doesn't sit on the board and control the company directly. And celebrities are all about image and control.

I expect more and more celebs and athletes to launch their own brands. It's a free billion dollar opportunity for them. It's the best way for them to capitalize on their status and turn it into a durable platform for their likeness beyond their career's peak.

I think, nowadays, when you order something you get the most cheaply sourced near equivalent the seller thinks they can get away with.

I wore a certain model of Adidas for decades. When I order it online, what I get is hit or miss. Sometimes they are too big, sometimes they are too small. Comparing the old and new ones, they are always similar but also noticeably different.

Where does the diversion happen? Amazon? Adidas? Manufacturer? Probably all of them? Who knows?

On the flip side, Chinese manufacturers seem not care about branding at all. It looks as if they apathetically slap on some carelessly designed logo and brand name just because the west apparently expects it. Otherwise you can get the "same" item under ten different ephemeral brands and every brand ships the aforementioned "near equivalent" as they see fit.

Brands have no meaning in this world anymore.

Same for me and a particular North Face light jacket. I’ve purchased the same model about 5 times, with noticeably lower quality materials in the more recent years. Faster wear, quicker fading colors, thinner.
I think this may be missing the health and comfort angle. Nike, Adidas, etc. haven't adapted to an aging population with more and more podiatry issues, and in fact seems to have made certain models narrower. Hoka and On have just swooped in and taken over the wide feet market.

That said, as someone with wide feet, I've tried them recently and I've been thoroughly disappointed in them. My On shoes (Cloud?) in particular shredded in months. On the other hand, now that Asics has toned down colorways, I've quite enjoyed them again.

New Balance and Brooks make shoes in "wide". I like them very much. Also their normal shoes are wider than Nike or Adidas. In the past, like 10 years ago, I used to wear adidas shoes and they fit. Now, the new ones are way too tight. I think they made them narrower, probably for fashion reasons...
seems Steve Jobs is vindicated again - when the Consulting types take over the result is predictable.

cz these guys were never there when the sauce was made, they think the ingredients matter - not how the ingredients compose together.

nike was an early innovator in athleisure - now leggings / tracksuits etc other brands took over - kids hardly care about sneakers - the shoes quality is down - personally I prefer new balance

> personally I prefer new balance

Great marketing got you.

https://thefreetoaster.substack.com/p/how-new-balances-cmo-t...

> Donahoe accelerated the direct-to-consumer transition, terminating hundreds of wholesale accounts

I'd love to know the reasoning behind this transition. When I want to buy some shoes, I'd like to go to a physical store, and I _usually_ am not going to look for a specific brand, unless I'm a big fan of a sportsperson who endorses Nike and maybe they've started a product line with them. I'm going to see, compare with other shoes and make a decision. D2C is not going to work in such a flow?

If my shoes are not there with other shoes, then I might as well not exist, because I'm not even considered during the comparison phase of shopping.

But this is just me, I don't know how most people shop for shoes and would like to understand more.

Athletes go through shoes pretty quickly. If you had a pair of Nike shoes for your sport and liked them but they're worn out then you'll probably buy the same ones online again.
I’m not a professional athlete, but I run and walk recreationally daily for at least a couple of hours. A pair of shoes lasts me about 9-12 months on average. I used to be very picky about my shoes trying dozens of models in store before finding the one that fit me perfectly. But once I found the match, I’ve started buying the exact same model again online at the discount websites, currently on my 4th pair.
This ”de-specialization” move is something I’ve seen several times from consultants like McKinsey. The guy who did it at Nike was from Bain.

They reorganized my company accordingly, to disastrous effect. Customers used come in and talk to product managers with very deep experience in their market, and it would blow their socks off. After the reorg customers would come in and talk to a random generalist who could talk for 7 minutes about 10 different markets each. Imagine how that felt to customers, that feeling of “I know more about this than my vendor does”.

I stopped buying Nike shoes a long time ago because they fell apart. They seemed to replace quality with an extra 24" of shoelace.
I would say that Hoka and On have probably done a better job at capitalizing on the opportunity than Nike has done at creating it. While the opportunity did present itself, I have been really impressed with their ability to really attack and market their products in a way that reached their core demographic at a pace I didn’t think was really feasible. Respect
I have never bought Nike anything because I assume a higher proportion of the price would be for marketing rather than quality.
The lesson is: if you focus on profits instead of building great products, you will fail (unless you have vendor lock-in like defense industry and the DOD, or Microsoft and enterprise). Nike brought in a bean-counter to run the company and he severely damaged it.

I know from close friends at Nike that they are relieved Donahoe is gone and they can get back to being a "high performance sports footwear company", but they have a big hole to dig out of. On and Hoka have been eating their lunch. Nike has always had smaller specialized brands to contend with: Brooks, Asics, Saucony, Salomon (trail running, which Nike dropped but is now getting back into), etc., but none of them exploded the way that On and Hoka did when Nike pulled back from retail.

One caveat not yet discussed is that both Nike and Adidas left open the "maximalist cushioning" market that Hoka pounced on for everyone enjoying plush running shoes for walking. And Nike has responded to that faster than Adidas, the Vomero 18 has been out for 7 months.

All in all, the Hoka / ON competition is a matter of marketing, trendiness, and poor options for wide feet. Nike has superior materials science tech and product across the running line (Hoka durability is bad and neither are competitive in the top running performance that's Nike/Adidas/Asics)

I'd bet on long term technical fundamentals than a market trend they temporarily missed.

I don't doubt the trends cited in this article; it seems well-researched. However I will say that anecdotally, as the parent of two boys in the US, Nike's brand is still very strong. I have a 3rd grader who refused to let us buy him any sneaker brand other than Nike. When my older one was the same age it was the same thing -- all the cool kids were wearing fancy Nikes and we had to pony up. That seems to have faded for the older one in middle/high school though.
The decline of Nike for the stated reasons make 100% sense. When ATMs came out, the bank I worked for in Canada, started losing market share as they replace physical banking locations with self-service ATMs. After 15 years of slow decline, they started to aggressively rebuild physical locations. They now believe you have to have BOTH - a clearly identifiable brick and mortar presence and ATMs.
Related:

Project Amplify: Powered footwear for running and walking

https://news.ycombinator.com/item?id=45706765

and this article:

Nike's plans to put the swoosh back into its sales

https://www.theguardian.com/sport/2025/oct/23/just-redo-it-i...

Out of sight. Out of mind.

Leaving retail to go direct to consumer was crazy. On and Hoka took over those empty shelves. They lost mind share.

Take a shoe like the Nike Free. The first shoes looked so slim and like EVERYBODY whore these all the time. Look at todays model. Never in 1000 years would my mom wear these shoes again. It might be, the new model is performing better. But most people don't used the early models for performance.
It does seem like they are getting some renewed brand interest from the Maduro rendition photos though.
Nike should buy Brooks and to jumpstart their product dev and push their cushioning and stability tech into the Nike shoe line, then build a branding campaign around that, and also go after some new athletes.
A ~10% drop in revenue but an outsized ~40% drop in profits probably indicates more than a 'brand decay' problem?
the puzzling thing to me is Tim Cook was in the board meetings. Apple and Nike play similae games to stay ahead and keep margins high. i am sure he is on the board to glean insights from the older brother Nike. And yet…
Honesty, been using products for 3 decades now. I feel like they have become more expensive and less durable over time.

Very smart writeup nevertheless. Subscribed to the Newsletter. Appreciate how you built everything yourself