Behind The High Growth &Nbsp; Adidas's "Fashion" Face

A few days ago, Adidas announced the first quarter earnings in 2011. Data show that Adidas's global sales revenue grew by 18% over the same period, of which, the first quarter sales in the Greater China region increased by 36%, increasing over other regions.

In March of this year, in the 2010 annual report released by Adidas, the Greater China region achieved sales of 1 billion euros, up 3% over the same period last year. The rate of exchange rate clearance decreased by 2% compared to the same period last year, and did not reach the global average growth level of 15%.

Adidas, which has been stranded in the Chinese market and trapped in inventory pressure and channel difficulties, seems to be heading for a turning point in 2011.

Adidas group also announced its first quarter earnings in 2011, raising its annual sales expectations, showing confidence in its future development.

In this regard, independent sports industry observer Ma Gang told reporters that in his view, Adidas's high growth in the first quarter is very important factor is the resumption of growth, that is, to return to the level of 2008.

The key Road Sports Consulting Co., Ltd., CEO Zhang Qingze, believes that the growth comes from the reform and adjustment. "In the fourth quarter of last year, Adidas's performance in China has begun to rise. The strong growth in the first quarter of this year can be seen as Adidas changed the blind expansion and adjustment direction in 2008, and now adheres to the results of pragmatic expansionism."

What are the specific reasons for Adidas's growth to revive?

In 2009, in order to get out of the predicament of China's market development, Adidas began to reform its domestic marketing channels.

Statistics show that in 2009, Adidas closed at least 200 stores.

The result of the withdrawal of the store led to Adidas's embarrassment in the Chinese market. In March 2010, the 2009 annual report released by Lining showed that Lining's market share in China exceeded Adidas's.

Zhang Qing said that in order to reshape channels, Adidas has adjusted the policy of large distributors, strengthened channel support, and supported certain advertising strategies, pricing strategies and activity strategies, so that dealers can get more goods and shop.

A set of data provided by Adidas to our correspondent in the mail showed that the growth rate of sales in its retail partners reached 40%-60% in the first quarter, which was higher than the average level of 36%, reflecting the initial results of Adidas in the reform of distribution channels.

A very important move in Adidas's domestic channel reform is to re divide the five regions and strengthen the ability to control and control channels.

Not long ago, Adidas set up the West headquarters office in Chengdu, marking the completion of Adidas's restructuring of the five major regions of Greater China.

Gao Jiali, managing director of Adidas Greater China group, once said: "the western region is the key area that we want to win. Our entire line of products has been listed in this region. Our unique advantages will help us better carry out brand penetration in this region."

Zhang Qing believes that Adidas group now re layout the regional market, for the close understanding of the market, to provide support to dealers to help, thereby improving the efficiency of sales channels.

At the end of last year, Adidas announced the strategy of "2015 China", with two digit growth every year in 5 years, increasing the product distribution destination from 500 cities to 1400 cities and 2500 new stores.

From this plan, we can see that in the future Adidas will sink to about 900 domestic three or four line cities.

Adidas's move confirms the start of the second half of last year, and it has warmed up in the Chinese market, setting the tone for future expansion and development.

Zhang Qing believes that "Adidas's pragmatism expansion strategy is very good performance, where there are Adidas consumers, his shop will be open."

Adidas's sinking into the three or four tier city market may become more visible in the future.

Zhang Qing believes that there is no obvious regional difference in brand consumption.

Consumers in some small and medium-sized cities are willing to spend a lot of money on famous brands.

Therefore, brand expansion should break the geographical boundaries, especially the domestic sports brand, which can learn Adidas's pragmatic expansion and seize the potential market development.

Adidas said to our reporter: we believe that the "2015 way" China strategy has also provided a clear direction for this growth.

Ma Gang believes that the growth of Reebok's brand performance is eye-catching, which has contributed greatly to Adidas's growth in the first quarter.

The first quarter sales of Adidas brand and Reebok brand increased by 18% and 24% respectively.

In January 2010, Adidas signed a cooperation agreement with Baosheng international. Baosheng became the exclusive agent of Reebok in China. The two partners jointly design, produce and sell Reebok products.

Ma Gang believes that the good cooperation between Adidas and Baosheng international has an important impact on Reebok's expansion in China and helps Reebok expand its terminal stores in China.

Although Reebok has not disclosed the number of specific shops, Ma Gang said that Reebok's performance in China has been increasing rapidly since last year, through the re adjustment of Reebok positioning and Adidas's increase in publicity investment.

In Adidas's multi line brand development strategy, NEO is also an important piece.

Since its establishment in 2007, NEO now has 800 to more than 1000 stores in China. It is one of the sub brands of Adidas's middle end. NEO is located among young people between 14 and 19 years old. The design style is more fashionable and casual, and the price is more close to the people, which is about half of Adidas's sports performance series (performance).

From the official data of Adidas, the sports fashion products represented by NEO increased by 51% in the first quarter and expanded rapidly.

NEO, which positioned the mid end market, is a sharp sword for Adidas to face rising domestic brands. Zhang Qing believes that this reflects Adidas's insight into Chinese consumers.

China's consumer movement is low in participation, high in sports sense of fashion and willing to wear sporty clothes on various occasions, which determines that the development of fashion sports products in Chinese market has more potential than professional sports products.

Adidas said to our reporter: "we expect that in the next five years, with the excellent brand portfolio, we will achieve an annual growth of two digit sales per year."

In March 18, 2011, Adidas launched a new advertising strategy called adidasisallin.

For the first time, Adidas gathered its three series of sports performance series (adidasSportPerformance), Sports Classics Series (adidasOriginals), sports fashion series (NEO, Y-3, SLVR) and so on.

In the new batch of spokesmen, entertainment stars such as Li Bingbing, Eason Chan and Angelababy were invited.

Ma Gang thinks: "the marketing strategy that integrates and popularize Adidas's brand can affect the pattern of current sports goods marketing strategy, that is, from single brand publicity to multi brand integration."

Zhang Qing believes that the new ads reshaped the image of ADI, and excavated the commonalities among different brands, that is, the spirit of passionate sports, making Adidas's brand image from conservative to more dynamic, and communicating with consumers more effectively.

In addition, from the invitation of entertainment star endorsement, Adidas will pay attention to the development of sports fashion series.

In this field, the Chinese market has nurtured a large number of Chinese competitors, such as XTEP and a large number of local competitors. They have been able to bypass the Adidas's "Sports" confrontation and get room for growth through differentiated marketing demands.

Now, Adidas's sports fashion is "tightening" the survival space of these local brands. A more familiar Adidas will be born in China. For the local sports fashion brands, the future competition with Adidas will become impossible.