Adidas Is Intended To Combat Nike In China

Compete for the Chinese market, the scale is supreme?

Sporting goods giant Adidas (Adidas AG) thinks so.

At midnight on Friday, Adidas's largest flagship store in the world will open in Beijing, China.

The flagship store building of this glass wall shows the texture of ripples under the different angle panels.

The opening of the flagship store fully demonstrates the ambition of Adidas, Germany, to compete with its US rival, Nike Inc., through the Chinese market.

Addias AG

The flagship store of Adidas Beijing is located in Sanlitun, the main entertainment area of Beijing. It occupies about 3170 square meters. It is about 1.5 times the scale of Adidas's largest store, Paris Champs Elysees store.

The opening of the new store is also a celebration of Adidas's official sponsorship of sporting goods in Beijing. According to people familiar with the matter, Adidas paid 80 million to 100 million dollars in cash and in kind for the award.

However, in a popular clothing market not far from the new store, a copy of Adidas three line stripe and Clover logo can be bought for 20 dollars.

But without the fake products, Adidas's China business is growing rapidly. Christophe Bezu, Asia Pacific head of the company, said that China's market sales will surpass Japan's by the end of this year, and become the second largest market in the world after the United States, which is second only to the United States by Christophe.

In terms of profits, China also surpassed Japan and some European markets at the end of last year, making it the most profitable market for Adidas.

Although Adidas has not released specific sales figures from various countries, Herbert Hainer, chief executive of the company, has said that its sales in China will exceed 1 billion euros (1 billion 600 million dollars) before 2010.

In an interview this week, Baez hinted that the company could achieve this goal ahead of time, hoping to release good news during the Olympic Games.

Adidas will announce its first half financial year results in August 5th, and the Olympic Games will be opened in August 8th.

Of course, Adidas is not the only fast-growing sporting goods company in the Chinese market.

China has become the second largest market in Nike in 2007, and its sales in China reached $1 billion in fiscal year 2008.

As the performance of major markets in the United States has stabilized, whether growth in a developing market like China is crucial to the two sporting goods giants is important.

According to pre sharp (Shanghai) Business Consulting Co., Ltd., it is estimated that China's sports apparel market will grow by 90% from 3 billion 800 million US dollars to 7 billion 200 million US dollars in 2009, partly due to the Olympic craze.

However, after last week's announcement of Nike's quarterly results, Nike's stock price plunged 9.8% on Thursday to its lowest level in nearly 7 years as investors worried about slowing economic growth in the US.

On the same day, Adidas's share price also fell by 3% due to the worries of investors, because the United States is also the largest market of the company.

On Wednesday, Adidas fell 0.09 euros to 38.81 euros (61.25 dollars) in the Frankfurt market, and Nike rose 6 cents to 59.05 dollars on the New York stock exchange that afternoon.

Considering the huge population and low rent in China, some retailers outside Adidas have also set up large-scale retail stores in China.

For example, in 2006, Sweden's home grown giant IKEA (Ikea) opened its largest retail store outside Stockholm headquarters in Beijing, attracting thousands of customers every weekend.

Louis Vuitton, Asia's largest flagship store, opened in Hongkong this year. China's huge customer base is the main reason for its new store opening in Louis.

David Hand, managing director of Beijing Jones Lang Lasalle (David Hand), said that China is still an immature market, and that large scale and advantage can attract consumers.

He also pointed out that in view of the strong patriotism of Chinese people, retailers' choice of flagship stores in China, especially in the capital Beijing, can satisfy the pride of Chinese customers.

According to statistics from Jones Lang LaSalle, the average annual rent of Beijing's retail market is 986 dollars per square meter, far lower than that of Shanghai's 2265 dollars and Hongkong's 3059 dollars.

Getty Images

Rawlinson, the champion of the world's women's 400 meter hurdles, wore Adidas sports shoes and Adidas flagship store in Beijing as a hurdle demonstration at Beijing Sport University. It is part of a comprehensive retail and The Inn Boutique comprehensive project in Sanlitun.

The project was hosted by Japanese architect Kumake Go (Kengo Kuma), and Louis Vuitton Tokyo flagship store was also his own.

The Adidas flagship store was designed by ShoP Architects, a New York architect office.

The shop is a square building with many mirrors and glass strips. According to the architects of the firm, the design is intended to reflect past pedestrians and cars, creating a sense of movement and vitality.

Adidas hopes to bring a healthy lifestyle to attract Chinese consumers.

The flagship store provides all kinds of free items, such as customers can test their balance, running and jumping ability in an interactive area. All the devices in the area are developed by sports research experts from University of Freiburg, Freiburg.

A service called sports Butler can provide training and nutrition advice.

Other services include the provision of customized football jerseys and sneakers. Customers can even choose different sizes of sneakers for their left and right feet.

Adidas also plans to use the flagship store to show its dominance over Nike in the Olympic field.

For Adidas, this is very important.

Many Chinese consumers still believe that Nike is the Olympic sponsor, largely because Nike has signed contracts with Chinese sports hurdles such as hurdler Liu Xiang, and has developed a series of sports shoes for Olympic athletes.

Richard Basil-Jones, managing director of Asia Pacific media, Nielsen Media Research, said that a recent survey by Adidas showed that Adidas was faced with a huge challenge from China sports products company Li Ning Co (Li Ning) and Li Ning Co was not an Olympic sponsor.

Adidas's biggest flagship store in China, the largest fake market in the world, may also be a big challenge, but its executives will not admit it.

The company has said that counterfeiting is not a major problem facing the company's global business.

In any case, Adidas has won trademark infringement lawsuits against Payless Shoesource Inc. this year, and the lawsuit against WAL-MART Wal-Mart Stores will also be heard in the autumn.

Baez said that in the Chinese market, Adidas's official Olympic sponsorship status helped the company to crack down on infringement, because Beijing took positive measures to protect the Olympic brand.

The powerful measures of the Chinese government have also helped to curb the hidden marketing practices of every Olympic Games in the past. Non sponsors have always tried to link their brands to the Olympics.

Last week, under pressure from relevant parties, the Li Ning Co suspended the clothing sponsorship contract with commentators of major sports TV channels in China.

Baez said: "no matter how much we have paid, we have received more returns, and the Olympic Games have not even been opened.

I am very satisfied with that.

To cater to the Chinese mentality has also brought rewards in other areas.

This year, Omnicom Group Inc.'s Shanghai based advertising agency, TBWA China, won the first gold award for China's Cannes International Advertising Festival (Cannes International Advertising Festival) with Adidas advertising.

Through the combination of computer graphics and real action, the advertisement shows the scores and record breaking scenes of Chinese sports stars on the shoulders and backs of the Chinese people, and successfully caters to the patriotic enthusiasm of Chinese consumers.