Nike pulls Houston Rockets merch from its stores in China: Friday Wake-Up Call
Nike's move in China
Nike just got caught up in the NBA’s China troubles, with its stores reportedly pulling Houston Rockets clothing from their shelves. Reuters reports that it visited five Nike shops in Beijing and Shanghai, where store managers said “they had been told in recent days via a memo from management that all Rockets merchandise had to be removed.” The National Basketball Association has been embroiled in crisis in China since the Rockets’ general manager, Daryl Morey, tweeted a message of support for Hong Kong’s pro-democracy protesters. Morey deleted the tweet, but that didn't ease tensions.
For Nike, China is the company’s “top source of revenue growth as other regions slow,” Reuters writes. Nike is likely worried about ruffling China’s powers-that-be at a sensitive moment. But some see this as a hypocritical move for a company that ran a celebrated ad with the tagline, “Believe in something, even if it means sacrificing everything.” One Twitter user altered Nike’s ad starring former NFL quarterback Colin Kaepernick, crossing out the line about sacrifice. The altered copy reads: “Believe in something. Unless it pisses China off.”
Apple, Google and China
“Apple Inc. and Google both removed apps associated with Hong Kong’s antigovernment protests from their digital stores in recent days, thrusting the two Silicon Valley giants into a controversy engulfing other U.S. companies,” The Wall Street Journal reports. The Google Play store pulled a game that let people play the role of Hong Kong protesters, while the Apple app, HKmap.live, could be used to see the location of police in the city amid demonstrations. Apple said it removed the app after receiving information that it was endangering police and others. But the optics weren’t great, since Apple made its move after coming in for harsh criticism from state media in China, a huge market for the iPhones. As Bloomberg News reports, Apple CEO Cook wrote a memo defending the move and adding: “National and international debates will outlive us all, and, while important, they do not govern the facts.” It's a curious statement—both cosmic and evasive—and unlikely to convince anyone who thinks Apple made the wrong call here.
Disappointing results from Publicis Groupe
Ad giant Publicis Groupe, which owns agencies including Saatchi & Saatchi, Leo Burnett, BBH and Publicis Media, just cut its forecast for organic growth in 2019, saying it would come in at -2.5 percent. Publicis had most recently predicted “broadly stable” organic growth. (Organic growth strips out acquisitions, divestitures and the effects of exchange rates.) The company logged a 2.7 percent decrease in organic growth in the third quarter, blaming cutbacks from clients in the traditional advertising business in the U.S. CEO Arthur Sadoun said the company is going through a rough patch in its transition to a new model; the company is trying to future-proof itself by putting more emphasis on data and tech. “We could have chosen the easy route and taken advantage of the status quo to find small pockets of immediate growth,” he wrote in a statement. “Instead, we are accepting this painful situation in the short-term, to be better prepared for the future.” Publicis had also cut its 2019 forecast in July after disappointing second-quarter results.
Moves: Walmart U.S. CEO Greg Foran is leaving to run an airline in his native New Zealand. His replacement is John Furner, 45, who “started working at Walmart as an hourly associate in 1993 and rose to lead Sam’s Club in 2017,” Bloomberg News reports.
Recession?: Ad Age’s video recap from the Association of National Advertisers’ Masters of Marketing conference includes leaders from Clorox, Fiat Chrysler and Bank of America talking about how a recession might affect business decisions.
Ad of the day: California Pizza Kitchen is promoting its cauliflower crust with images that show people’s minds being blown, literally. The striking imagery from agency Made shows people with mushroom clouds coming out of their heads, except they’re actually cauliflower clouds. To get it, you really need to see the pictures, so click here and read more from Ad Age’s Ann-Christine Diaz.
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