Adidas's Quick Counterattack

A year ago, the Spanish team (Adidas sponsorship) became the Eighth World Cup champion in history. At this time, the people who cheered the victory not only had Spaniards, but also the staff from Adidas headquarters in Germany - although Germany had just been knocked out by Spain at that time.

This trophy shattered the possibility of Nike's team achieving three consecutive championships in the world cup. (2002 and 2006, Nike sponsored Brazil and Italy won the championship).

The 2008 financial crisis made global sporting goods.

But in the Chinese market, the news is frustrating.

At that time, reports on the decline in sales in Adidas Greater China were endless, and the star market was dragging its feet.

In the first half of 2010, China's market revenue decreased by 16% over the same period last year, becoming the only negative growth area in its top six markets.

What's more, Adidas is not only lagging behind its old rival Nike in the Chinese market, but also replaced by another old rival, Lining, second of its market share in mainland China since 2009.

However, only 6 months later, Adidas equalized the score.

According to the 2010 earnings estimates, the sales volume of Adidas mainland is about 1 billion euros, which is close to that of Li Ning Co in 2010.

At that time, Li Ning Co turned into "bad news": closing 500 stores, the sharp decline in orders in the first, second quarter of 2011, and other bad news.

While Adidas is ready to take off, its first half of 2011 earnings announcement (Greater China's first half business income of 552 million euros, the first half of the year grew by 38%, leading the rest of the world), Adidas Greater China managing director Gao Jiali stressed that the Greater China region sales growth has exceeded the "main competitors."

Li Ning Co issued a profit warning that the Group sales revenue in the first half of the year decreased by 5% compared with the same period last year, and the net profit margin will shrink by half from 12.9% in the same period last year.

For Adidas, it looked stunned in the summer of 2008.

"This is not the problem of Adidas family, many colleagues have the same problem."

Gao Jiali, managing director of Adidas Greater China, with a baby face, said to Chinese entrepreneurs.

In fact, 2009 was a tough year for many sporting goods brands. Nike closed its only private factory in China to reduce the pressure of production.

As a result of the small profits, Daphne and Nike, one of the main distributors in China, decided to withdraw their sporting goods agents. At the same time, BELLE, the two largest sports retailer, had to close more than 300 stores.

Crisis is also the best reason for change.

In 2009, Adidas made fundamental adjustments to the global architecture.

The headquarters of various continents were changed, the management level was reduced, and the global market was divided into 6 regions according to market characteristics, namely, Western European market, European emerging market, North American market, Greater China market, other Asian markets and Latin American markets.

In addition, Adidas has launched a global channel of change, paying more attention to the establishment of self owned stores.

The reason is that in 2009, the gross profit margin of Adidas wholesale (distribution) business was 41.6%, while the gross margin of retail business was as high as 58.6%.

Obviously, retail businesses existing in self operated stores should be vigorously developed.

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But the channel of change and the addition of self owned stores, the universal directives for the global market, are somewhat subtle in the Greater China region.

"We want it to grow at the same rate as our franchisee," Gao said in a careful wording to deny the possibility of increasing the proportion of self owned stores in the entire channel.

The reason for his caution is that Adidas China, which has just straightened out its channel relationship, does not want this relationship to be damaged again.

In fact, looking at the adjustments made by Adidas in the past two years in China, there are only two things: contraction and price reduction.

All of this is related to the adjustment of channels and distributors.

First of all, adjust the dealer team, allow some dealers who lose enthusiasm in cooperation to withdraw from the Adidas system, and patiently help them to handle cumbersome exit procedures.

Second, help dealers who are willing to cooperate with Adidas to tide over difficulties.

To this end, Adidas finally changed the strategy of the main brand no price reduction, no discount, allowing some regional distributors to open discount stores to digest inventory.

Even in some cities, they are allowed to drive the fashion discount shop to a few hundred meters away from the flagship store.

In Beijing, sales promotion has been done in some residential areas along the subway in Tongzhou District.

"In the second half of 2010, we also formulated a strategic decision. In order to reduce inventory levels to a healthier and more stable level, we adopted an inventory replacement system that allows our channel partners to get their old stocks to our new stocks."

In this way, the sales rate of products valued by Gao Jia Li has greatly increased in the market, so "from the second half of 2010 to 2011 now, the comparable sales growth rate of our stores has greatly outperformed our competitors."

It is self-evident that the competitors are who they are.

Adidas, who has paid the tuition fees, has a deep understanding of the channel's resilience, and Li Ning Co seems to be ill prepared.

In June 2010, Li Ning Co launched the bid change operation and kept it highly confidential, so that all dealers were kept in the dark in advance. For products with new LOGO, they would not know a large number of listings.

Dealers will be "ready to fade out" for the old Lining products that have been ordered, without psychological preparation or fund preparation.

This directly led to distrust between channels and brands. At the end of 2010, the order volume of Lining brand declined sharply in the 2011 quarter.

In analyzing the causes, Li Ning Co CEO Zhang Zhiyong summed up two points: first, the retail environment in the sporting goods industry was sluggish, which led to more conservative expectations of dealers. Second, it was because the past reliance on distributors to open shops to promote growth was not sustainable.

Insiders believe that Zhang Zhiyong's analysis of the cause is open to question.

The reason is: the macroeconomic environment of sporting goods sales in 2010 has improved compared with 2009.

Lining was able to grow beyond Adidas in the most difficult 2009, but began to lag behind in the recovery of the market.

On the other hand, in the current Chinese sporting goods market, distributors are still the most important market forces that cannot be ignored.

Especially if you want to go deep into the three or four line city.

Insiders said that Lining currently has more than 8000 stores in the country, including 500 flagship stores, and the main function is to display products, and the remaining stores are in the hands of more than 2000 distributors. These large to professional stores, small to the distribution channel of spouses and shops, are still the main profit pmission belt of Lining.

Relying on distribution channels, Adidas Greater China is the same as Lining.

Therefore, even if the global headquarters has repeatedly stressed the importance of self operated stores, Adidas China has also been consistent in its efforts to keep up the proportion of self operated stores, but stressed the need for coordinated development between them.

It is obvious that Adidas's respect for China's distribution channels is evident.

Adidas is not unaware of the risk of "over reliance" on distribution channels.

But this risk is not simply "shock therapy" can be resolved.

Increasing the channel type is a solution.

Adidas authorized Taobao to open online shopping mall in August 2010, which is a way of enriching channels.

A more central issue is how to cultivate channel loyalty and real control over channels.

"The mode of cooperation between us and distributors has not changed in principle compared with the past.

The only difference now is that we have strengthened our close cooperation with distributors.

We will use some indicators to measure them, such as the way they buy goods, the rate of sale they sell to terminal consumers, their own investment in shops, and how they can operate shops more professionally and effectively.

This is where we are different from other brands. "

Gao Jiali explained Adidas's channel policy after the crisis.

Although he came to China in early 2010, Gao Jiali was confident that he knew a lot about the Chinese market.

In the interview, Gao Jia Li suddenly rose, smiling like a trick, drawing a map of China from the corner of the table to show his homework for the Chinese market.

This map is unique. It is a map of China, which is detailed in red pen by himself and his team. It contains some of the core secrets of Adidas China.

On this map, apart from administrative boundaries, there are also Criss Cross solid lines and dotted lines.

According to demographic data and market intelligence analysis, Adidas divides China's two or three line market into a competitive saturated market (real line) and an opportunity market (dotted line).

According to the "2015 way" strategy announced by Adidas at the end of 2010.

This strategy will be driven by 5 engines.

One of the goals is: in small and medium-sized cities, by 2015, more than 2500 stores will be planned and products with reasonable prices will be provided for the market segments to meet different consumption patterns in different cities.

The cities covered by Adidas shops will also increase from 550 now to more than 1400.

Obviously, Gao Kai Li hides at the corner of the table is a Adidas's counterattack chart in China.

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The importance of the Chinese market is self-evident.

Herbert Heiner, chief executive of Adidas group (Herbert Hainer) has increased greatly in recent years, and once again called China "our star market" after the 2011 half year earnings report.

He said, "in the next five years, we will create an exciting brand for Chinese consumers to achieve quality growth."

He firmly believes that greater China will remain the main driving force for the future development of Adidas group.

However, mistakes made by opponents can be repeated again.

Adidas must be careful not to step into the same river.

The complexity and diversity of the Chinese market can be intimidating, and any simple market size positioning can be superficial.

"For example, the concept of the two or three level market is usually used. People who have done sales know that it is better to open a shop in a street in Dongguan than to open a shop in the best section of Beijing Fengtai District."

An insider warned.

The work of channel reconstruction continues.

In April 2011, Adidas set up the West headquarters office in Chengdu, which signifies that Adidas has completed the restructuring of the five major regions of Greater China.

"We hope that the future sales and marketing team will be closer to our channel customers and terminal consumers.

They can conveniently travel around the area to do a series of jobs.

Their duties are to serve channel customers, on the other hand, they will supervise and inspect the operation of channels and retail stores. "

Gao Jiali said.

Cross border worries

For Adidas, it is obviously very important to know what its advantages are and when it can pose a high profile to reflect the premium of the brand.

In fact, 2009 is a sports year. There are no major sporting events. In order to clear inventory, Adidas allows some distributors to open discount stores only by expediency.

With the 2010 World Cup held, Adidas's fist product "genuine national team jersey" and so on, and immediately regained arrogant attitude, accustomed to a high price waiting for those who support the beloved team at all costs.

Of course, its test can not be ignored. How to accurately grasp the increasingly complex and diversified needs of consumers is the biggest test for every Chinese market player.

In the sporting goods industry, there has always been controversy over whether the product should be "single product" (one person is engaged in one sport) or "single person multi product" route.

But in the view of Adidas executives, not only the boundaries of consumer sporting goods are blurred, but it is difficult to simply use the label of "a football fan and a mountain climber". Even the boundaries between sports and fashion are blurred.

Yesterday's experience of focusing and accumulating market segments could become a constraint to further change itself today.

"Now consumers, consumption habits and habits are beginning to undergo complex changes. For example, some people are more pleasant to the old and willing to try new things.

Some people used to play only one sport, and now they may engage in many sports. "

A senior domestic sporting goods company executive told this magazine.

For example, a middle-aged white collar consumer may be a football fan. He can play football on condition, and he regularly participates in badminton activities organized by the unit. At weekends, he has to climb mountains with his family. Sports is not only a personal sport, but also a social tool and tool.

As a result, Adidas has also started its own brand upgrading after the performance recovery has taken a firm foothold in the Chinese market.

It emphasizes the relationship between products and products, brand and brand, rather than the boundaries of each other.

In March 2011, Adidas launched the latest global brand promotion campaign called "all Adidas".

In addition to soccer stars, Li Bingbing and Eason Chan, who are familiar with Chinese football, want to express their brand's attitude towards sports, culture and life by showing their involvement in sports, music, fashion and other fields.

Messi used the world soccer player, Messi, for example: at the age of 11, Messi was diagnosed as impeding bone growth due to lack of developmental hormones, but this did not stop his love for football, and through hard work, he eventually became one of the most outstanding football players.

Li Bingbing, as spokesperson for women's training costumes, understands the whole mind as "doing everything is full of passion. This passion comes from the inner conviction."

In fact, "all efforts" span the boundaries of age, sex and sports, and abstract a spirit of sports and an attitude towards life.

Obviously, in the future strategy of trying to attract consumers in depth, Adidas now emphasizes the comprehensive sports resources of its own, instead of unilaterally emphasizing a sports item or a certain type of consumer.

"We hope to be able to attract consumers through comprehensive use of" sports performance "and" sports fashion ", which is different from our competitors.

Gao Jiali explained.

But every change means new risks.

There is also some contradiction between insisting on self and crossing the boundary.

Since 1920, this German company has always been known for its rigorous and professional sports equipment. Now it has begun to emphasize the combination of fashion and sports. This not only means that it will have more confrontation with KAPPA, which has been combining sports and fashion very successfully, but also means that it may lose its attention in the contest with Nike.

After all, every extension of brand connotation is an adventure. If we go too far, we may forget our original intention.

Using the opponent's mistakes to complete the counterattack Adidas, similar mistakes may also be repeated.