Adidas Brand Giant Faces Positive Turning Point

"Unhappy is defeated", Adidas uses new football. shoes Advertising slogans to express their desire for speed. However, in the Chinese market, this fast moving sports giant is facing a turning point in performance.

A few days ago, Adidas released 2013 earnings report, the group's global sales revenue period decreased by 3% to 14 billion 492 million euros (122 billion 605 million yuan), if the exchange rate unchanged, the Group sales revenue increased by only 3%. The Greater China region, the most favored by businesses, also dropped from double-digit to unit number, increasing by only 7%, the lowest in nearly three years.

Under the pressure of retail recession, the situation of Adidas's growing performance is becoming more and more serious. How can Adidas run faster with the rise of local sports brands and the rapid attack of Nike (expanding site information)?

Weak growth in performance

Adidas, which has been growing rapidly, will become history.

A few days ago, Adidas released its 2013 earnings report. Its sales revenue in Western Europe decreased by 6%, and sales in the Greater China region increased by 7%. This figure is actually lower than the initial expectations of management.

"Our strong performance in the fourth quarter was a successful conclusion for the 2013 year. According to the exchange rate unchanged, sales revenue increased by 12%, far exceeding our expectations, "Adidas Group CEO Herbert Heiner (Herbert Hainer) commented." in the fourth quarter alone, the negative impact of currency exchange rate led to a 9 percentage point loss in our sales revenue.

In March 13th, Adidas In an interview with the China times, the group said Adidas has been growing continuously in China, opening more new stores and consolidating its leading position throughout the country. The company still sees growth in health and sustainability.

Although Adidas group has maintained a more optimistic attitude, the fact that its performance is weak in China has to be taken seriously.

According to Adidas's earnings report, in 2012 and 2011, sales growth of Adidas in China increased by 15% and 23% respectively, much higher than the 7% increase in 2013 sales in Greater China.

As for the weak growth of Adidas's performance, CEO Zhang Qing, a key sports consultancy company in Beijing, believes that on the one hand, it is influenced by fast fashion brands such as ZARA and UNIQLO. On the other hand, it has been blocked by local brands in the three or four tier cities.

A few days ago, when the reporter visited the market, he found that when the local sports brand had a slight fever in the domestic sales promotion activities, Adidas and other international famous brands were still fighting with the discount. Some of the salesmen said the new products were playing a discount of 5-9 discount. During the visit, reporters also found that in order to sell stocks quickly, Adidas has already carried out 3-7 fold promotions in many supermarkets.

And Nike also started sniping at Adidas. According to the findings released by Euromonitor, a market research firm, Nike accounted for 12.4% of Western European market in 2012, while Adidas accounted for 13.2%. In the first half of fiscal year 2014, sales in Nike Western Europe rose 11%, while Adidas fell 6% in the third quarter.

An insider, who declined to be named, told reporters that as the competition between sports brands was heating up, Adidas was stepping up efforts to optimize its retail strategy so as to take a favorable position in the market competition. While Adidas is pressing ahead with Nike in the European market, part of the market share falls into the hands of the latter.

How fast can it be?

In the whole sports industry, the products of professional category are already saturated, and Adidas is fast breaking through.

As early as 2011, China's first Adidas outdoor franchise store officially entered Harbin. According to statistics, Adidas has more than 30 outdoor stores in the north of China. They are using the brand's own influence to open up this new field -- the outdoor products market.

In May last year, Adidas emphasized again that it had already dug up some talented people from fast fashion brands such as H&M and ZARA, hoping to become faster. This is also the beginning of Adidas's shift from professional sports products to fast fashion.

At that time, Gao Jiali, managing director of Adidas group Greater China, also said that sports fashion could bring growth to Adidas.

However, this is not the case. With the increasing weakness of retail trade, the resistance of ADI to fast fashion is bigger and bigger. When Adidas announced its 2012 annual performance data in early 2013, Adidas also predicted that the sales revenue of the group would maintain an increase in the median digits in 2013. However, from the earnings data released recently, it seems that the distance from this forecast is getting farther and farther away.

Can Adidas really be as fast as a fast fashion brand? It is understood that the turnover period of fast fashion brand goods is generally 20 days, and that of sporting goods is 40-50 days, or even longer. From the fast fashion brands like H&M and ZARA, it means Adidas wants to make products update faster. However, as a light asset sports brand, in order to save labor costs, Adidas shut down a factory directly under Huawei last year.

To this end, many industry analysts told reporters that the pursuit of product design and speed of loading can drive sports and fashion products to the Chinese market faster. But in order to save costs, China has been moving factories for a long time, obviously slowing the pace of Adidas. From this point of view, Adidas's move is "at the expense of time for the advantage of commodity prices", contrary to the original intention of "fast".

The key road Sports Zhang Qing, the founder of the consulting firm, said that China's "light sports" consumer market is very large. Under the background of huge demand in the market, the fashion transformation of Adidas and other sports brands will become more obvious. But this change is also seen as one of the reasons for brand homogenization and high inventory. In Zhang Qing's view, as a sports brand, products must be "able to stand up" on professional functions, and then deduce from fashion to get consumers' recognition.