Adidas rethinks China approach | WARC | The Feed

Adidas rethinks China approach

Sportswear giant Adidas is rethinking its approach to the China market, putting greater emphasis on understanding local consumers and expanding its distribution.

Background

Announcing Q3 earnings recently, Adidas was able to report growth in all regions of the world except Greater China, where year-on-year revenue was down 26.6%. The ongoing Covid restrictions have clearly been a major factor, but so too has been a backlash against western brands over the issue of using, or not using, cotton sourced from Xinjiang. 

The China Project notes that Adidas has now had negative sales growth in China for six consecutive quarters and has fallen behind global rival Nike (whose sales have also fallen) and local brands Anta Sports and Li-Ning.

Those figures were the spur to bring in a new managing director in March: Adrian Siu describes his approach as “a marathon, not a sprint”.

What will happen

• More products will be “Made in China” and will take account of the guochao trend, which Siu acknowledges the brand has not sufficiently addressed.
• A partnership with the China Literature and Art Foundation will see Adidas carry out cultural activities for the development of sport in China, while also gaining access to university campuses.
• A new China data centre aims to provide deeper insights into consumer needs, such as “what colors they like, and what materials and fabrics they like”.
• Adidas is also implementing an omnichannel approach; as well as outlets on major platforms such as Tmall and JD.com, it has plans to extend its flagship stores into third- and fourth-tier cities.

Sourced from The China Project, Seeking Alpha, Financial Times