Adidas Gao Jia Li: Consumers In Low Level Cities Are Seeking High-End Consumption.

Local sports brands such as Lining and Anta are trapped in the quagmire of inventory. Consumers in low level cities are seeking high-end consumption.

After two years of bone healing, Adidas started running again.

According to its earnings report, the sales revenue of Greater China in 2011 increased by 23% to 1 billion 230 million euros.

Rapid growth comes from ambitious expansion strategies.

According to the "2015 way" plan announced by the end of 2010, Adidas will increase from 5500 stores to 8000 at the time, extending from 550 cities to 1400 cities.

In the first year of the plan, it has increased by 1175 stores and expanded 115 new cities.

In addition to the main battlefields of Beijing, Shanghai and other tier cities, the sinking of the lower tier cities will be an important growth point for Adidas's future.

Langxi County, Pingnan County, Honghe County...

Most of the newly expanded cities in Adidas last year were such five or six line cities, many of them even less than 500 thousand.

Adidas believes that the commercial growth of 2/3 in the future will be concentrated in the four line to the six line city.

This is a good time.

Local sports brands, such as Lining and Anta, which are dominant in the low tier cities, are in the mire of inventory.

Gao Jiali, managing director of Adidas Greater China, told reporters: "consumers in low level cities are seeking high-end consumption, hoping to buy more high-end brands." (ColinCurrie)

We believe that Adidas can help dealers and other partners to make full use of this business opportunity and occupy market share.

In China, 90% of Adidas's business comes from dealer business, and 10% comes from proprietary retail stores.

Distributor is an important part of its entry into low tier cities.

However, the dealer management problems and inventory crises that local brands have already experienced indicate the danger behind this expansion mode.

How to avoid repeating the same mistakes?

In the "2015 strategy" plan, Adidas's main task in the future is to enhance the dealer's ability and ensure the joint efforts of both sides to ensure the normal operation of new product sales and inventory digestion.

In Gao Jiali's office, there is a half man high China map, which is covered with red and yellow dots.

Red is a city that already has Adidas stores. Yellow represents the city they will enter in the future.

How to map these yellow dots? This is exactly one of the most important modules in the "2015 way" strategy, shop distribution planning.

In fact, in the past, when a distributor opened a shop, he usually decided to choose a location based on his own business resources.

Now, Adidas is working with consulting companies and distributors to understand the economic development and organizational form of different cities based on the census data of the government, and has completed the priority of cities that will enter the next two to three years.

Subsequently, Adidas employees will go into these cities, observe through the urban mapping, observe the areas distributed in banks, schools and shopping malls, together with distributors to determine the most suitable store locations, ensure the healthy development of the storefronts, and enable dealers to implement long-term business plans.

In 2009 and 2010, Adidas cleaned up its inventory and rebuilt its relationship with dealers. It was also changing the way of cooperation between them. (please refer to "terrible Adidas" in Gemag.com.cn), from focusing on "Sell-in (selling goods to dealers)" to "Sell-through (selling goods to terminal consumers)".

In the contract with the distributor, Adidas stipulates that a certain quantity and proportion of new products must be sold within three months. After three months, these products will be cleared to the factory store (Oteri J) to ensure that there is no unreasonable stock.

By collecting the Sell-through sales data of the whole country and putting them into the database and analyzing the trend, Adidas quickly understood the sales fever of different products, and provided suggestions for distributors according to the regional characteristics, including the purchase of goods and shop display.

At the same time, Adidas changed the policy of "one size fits all" which regarded China as a whole in the past, and expanded regional offices.

In April last year, after the establishment of the western district headquarters in Chengdu, the mainland of China was divided into four regions (North China, East China, West China, Southern China + Hongkong), managed by four regional general managers, so as to ensure closer proximity to consumers, distributors and markets at high speed expansion.

However, Adidas's competition is not easy.

Gongcheng Yao Autonomous County, which is 108 kilometers away from Guilin, is a small town with less than 500 thousand mouth.

In the same street, there are local competitors such as PEAK, POOVE, 361 and Jordan sports.

And soon after Adidas's new store opened, the Nike store, which was next to it, opened.

Such close combat will be everywhere in China's small cities.