Nike has worked with hundreds of companies in the quest to find the best shoe-manufacturing company. Some of them have stuck around, while others have moved on. Here are three such companies:
Below, you’ll learn a bit more about each company.
Freetrend is a Chinese company founded in 1979. During the 1990s, it expanded to Vietnam. However, most of its production is in Mainland China. Freetrend can also be traced to three other shoe companies: Asics, New Balance, and On Running.
MAS Holdings is a South Asian clothing company with locations in Hong Kong, Indonesia, Vietnam, and Singapore. It also has offices in the United States, Canada, the UK, and Haiti. Three brothers founded the company in 1987. Since then, it's grown into a global powerhouse, making athletic clothing for companies like LuLuLemon, Patagonia, and Gymshark.
Pou Chen Group is a Taiwanese company known for creating both athletic and casual footwear. It started in 1969 as a creator of canvas and rubber footwear. In the 1970s, it grew to become an original design manufacturer (ODM) for major international brands. One of these brands is Nike, but it also includes Adidas, Asics, New Balance, Timberland, and Saloman.
Nike shoes are manufactured in China, Indonesia, Korea, Vietnam, and about 30+ additional countries. Across these countries, you’ll find 500 factories that contribute to Nike products.
It’s natural to wonder why Nike doesn’t rely on fewer factories. After all, a single group might be able to make more shoes with greater efficiency. But this comes with some risk.
By relying on over 500 factories, Nike doesn’t have to wait if there are shipping delays. If a single factory breaks down or has any other interruption, it could halt the supply chain. If Nike can’t sell shoes, it can’t make money. By relying on a larger group of companies and factories, it can more easily switch to another factory and company if there are complications.
If you want to make money from e-commerce, Nike’s first lesson is not to rely on one person for everything. Be ready to create a “plan A” and “plan B” that includes different potential manufacturers. After all, if you rely on one, you’ll be stuck if the manufacturer runs into delays.
If you’re new to e-commerce, you might not have the budget to include multiple manufacturers. However, this shouldn’t stop you from creating a shortlist of potential collaborators. With a list, you’ll be able to quickly contact this group, giving you a better chance to address delays sooner.
Nike shoes are made in many countries because the company can’t rely on a single country for all of its merchandise. Foreign powers and relationships can change every day. For a great example, we look towards the latest impact: Trump’s trade war.
Trump's trade war, which began in 2018, placed a 10% tariff on over $300 billion worth of Chinese goods, naturally increasing the cost of receiving goods from China. For those who work with China to receive these goods (most major companies), this makes receiving inventory more expensive.
Trump’s history, as well as the cultural disagreements between some Western countries, might make some companies wary about finding manufacturers in China. To address this concern, business owners can rely on a mix of companies from different countries to avoid potential delays.
Locations like Vietnam, India, and Indonesia are leaders in footwear production alongside China. These four countries in the Asia Pacific (APAC) region make up 75% of footwear production in 2022. Vietnam, in particular, is an emerging leader in this area.
On the contrary, if you rely on one country, several potential factors could delay shipments. These are domestic (localized weather, foreign invasion, terrorism, etc.) and foreign (tariffs and other trade restrictions). By creating a list of companies from various countries, you can avoid the issues of relying on one country.
Of course, companies (like Nike) could overcome this issue by relying on local manufacturers. Nike is primarily an American company. So naturally, this leads us to our next question.
Nike is primarily an American company with its headquarters in Beaverton, Oregon. Naturally, there’s plenty of skilled labor nearby to create athletic shoes. Instead, Nike outsources its shoe-making to overseas companies. It does this for a few different reasons.
Nike is better at brand building than shoe manufacturing. One of the main competitive advantages Nike has over its competitors is immediate recognition. It has done this for many years, partnering with well-known celebrities like Michael Jordan to make its shoes synonymous with success. Jordans, a shoe synonymous with fame, continues to provide Nike sales to this day.
Nike can’t make shoes as efficiently as other companies do. Like the three companies mentioned above, Nike didn’t take time to perfect its production process. So, if it tried, it would naturally need to spend more on research and development to make this happen. Instead of wasting time on that, it can save money on production costs and outsource this process.
While business owners can do everything themselves, this is difficult. After all, there are plenty of things to do when running an e-commerce business. You could run a social media page for marketing, pay for and manage ads, and manage inventory. Outsourcing some of these duties helps you focus on areas where you are talented. So focus on your talents and outsource the rest when possible.
Part of this greater efficiency comes from relying on countries that can do it cheaper. For example, countries like China, Mexico, and Vietnam have manufacturing costs of $6.50, $4.82, and $2.99 per hour respectively. These lower costs can lead to some ethical issues, which we will discuss shortly.
For now, compare this to the median hourly rate of production workers in the US: $18 per hour. Other Western countries also have higher hourly, and this doesn’t count the cost of factory overhead and other company needs. Even with the growth in automation and the manufacturing process, the cost of making anything in the US is more expensive.
This is part of why locally-made products are more expensive and out of the price range of some families. Companies hire overseas manufacturers to help save costs. The few we mentioned for Nike are just a couple of examples, as there are hundreds of companies that work with Nike.
For smaller entrepreneurs, working with overseas manufacturers can help save money while producing more. With a bit of research and some help from Atsource, you can find the right manufacturer for you.
According to a study from the National Association of Manufacturers (NAM), the US manufacturing industry could require 3.8 million jobs. Many Western countries share this issue, focusing instead on providing education that doesn’t encourage pursuing a manufacturing job. Locations like China, which have higher population centers, have more workers willing to pursue these careers.
In China, for example, footwear manufacturing hires around 2.7 million people, with a market size of $131 billion. Knowing the US needs 3.8 million extra workers, China is clearly in a better position. This is partially because of its larger population, which provides more workers who could fill these jobs.
Of course, relying on overseas locations can lead to some ethical concerns.
Going back to the early 1990s, Nike relied on sweatshop labor to create its products. This history tarnished the company’s reputation, leading to a 1996 department tasked with working to improve factory conditions.
These days, Nike has mostly improved its reputation, denying the use of child labor in its factories. Still, it hasn’t completely escaped this reputation, relying on a factory that “compelled” Uighurs to work in its shoe factories. However, these claims were made against the factory, not Nike itself.
Regardless, Nike still has some work to do before it can get a completely clean reputation. Of course, you should also take steps to ensure you work with ethical factories.
To be sure you rely on ethical factories in countries like China and Vietnam, you can perform a search on the target company. Use trusted, third-party sources to see if the factory participates in ethical sourcing.
You can also look for these certifications:
Both certifications are from trusted organizations regarding social responsibility. You can also rely on Atsource to help you find a trustworthy manufacturer.
Whether you’re a fan of Air Jordans or are just one of the millions who know about Nike, the company contracts companies to build its athletic footwear. Nike factories can be found in China, Vietnam, and Indonesia, with Vietnam emerging as a leader in footwear production. These factories also make shoes for some of the top brands across the world.
Nike does this because it isn’t very good or efficient at actually making footwear. While it has designed many innovative shoes over the years, it hasn’t built a personal production line. As a result, overseas countries are leveraged thanks to their greater experience in manufacturing and reduced production costs.
It chooses various countries and companies to ensure a more robust supply chain. However, domestic issues, foreign interests, and factory delays can halt production completely for some companies. When shopping for your own manufacturer, take these points into consideration.
Naturally, you might want to know if you could work with one of the foreign companies Nike uses. After all, maybe a bit of that Nike magic can rub off on you if you get closer to the giants. While it’s clear that these companies have high-quality manufacturing processes, they won’t be your difference maker. Besides, they’re already busy working with the largest shoe companies in the world.
We can find you the right supplier to help you start or grow your business.
