Adidas Gambles On London Olympics Or Loses Again

At the cost of 100 million of the total investment, Adidas, a multinational sports giant, became one of the biggest sponsors of the 2012 London Olympics.

The biggest Olympic sponsor, however, has recently been exposed to its factory in Kampuchea as "sweatshop", with workers earning only $15 a week.

Subsequently, Adidas denied the "sweatshops".

With regard to the specific amount of Adidas Olympic sponsorship and expected returns, Adidas's head of public relations only has no positive response to the fact that the Olympic Games are the best opportunity to promote Adidas brand and show Adidas's commitment to help athletes play the best brand competitiveness in the world.

It is understood that this sports brand, which has decades of origin with Olympic sponsorship, has suffered from the high spirits of the 2008 Beijing Olympic Games.

The torment of inventory.

What will be the result of Adidas's sponsorship of the London Olympic Games this year?

The memory of Beijing Olympic Games

"In 2008, Adidas will become the largest sports brand in China. By 2010, Adidas will become the largest sports brand in Asia."

People still remember the brave words released by Herbert Heiner, chairman and chief executive of Adidas group on the eve of the Beijing Olympic Games in 2008.

However, the facts later proved that Adidas did not win the Chinese market as expected, not only by Lining, but also the growth momentum of local brands Anta, PEAK and XTEP.

The overexpectation of the 2008 Beijing Olympics allowed Adidas to take an optimistic look at the Chinese market that year. Dealers said that the goods were sold at the rate of 20% to 25% in that year and the result was all in the hands.

After that year, Adidas began a long repair period. In August 2009, Adidas released its second quarter earnings report, showing that its stock value increased by 13% in the first half of the year, reaching 2 billion 41 million euros.

Although Adidas's competitors suffered similar inventory crises in the same year, the problem was not serious.

Nike's fourth quarter earnings in 2009 (up to May 1, 2009) showed that its inventory turnover had returned to normal.

Adidas's net profit in the fourth quarter of 2009 dropped by 64% from 54 million euros in the same period in 2008 to 19 million euros. Meanwhile, sales in the fourth quarter fell 5% to 2 billion 460 million euros, also lower than the market expectations of 2 billion 510 million euros.

"In 2008 Beijing Olympic Games, due to the sudden financial crisis, coupled with the marketing encirclement and suppression of China's local sporting goods companies, under the environment of slowing growth of China's sporting goods market, Adidas encountered great challenges and huge inventory pressure.

But the underlying reason is Adidas's supply chain management and cost pressures.

Wang Yiming, director of sports marketing at Haitian Sports Association, said.

Beyond Nike's Olympic goals

Statistics show that the proportion of Olympic sponsorship enterprises to achieve the purpose of sponsorship and failure to achieve the target is 1:9.

From this perspective, it is not always a good thing to get sponsorship qualification, nor is it a bad thing to have no sponsorship qualification.

It is quite appropriate to use this conclusion to describe Olympic official sponsor Adidas and Nike, an unofficial sponsor.

"Since the establishment of Nike in 1972 and gradually gained the throne of ADI" the world's largest sporting goods supplier ", Nike has always been the pain of ADI.

This time it must also try to win the London Olympics, not to win the first place in the European market, or at least to become the first in the UK market.

Li Dongming, general manager of Beijing Centrino Sports Management Co., Ltd.

In fact, except for sponsorship of the Olympic Games, football has always been a traditional project sponsored by Adidas.

In Li Dongming's view, "in the sponsorship of this year's European Cup, ADI can say that it has failed."

He said Adidas's official sponsorship had handed 60% of the European Cup to rival Nike.

Back to this year's London Olympics, the situation is so similar.

Adidas is still taking the official channel, according to the introduction of its leader to reporters. Apart from providing equipment for all British athletes, they are also the official partners of the other 10 National Olympic committees, including Australia, France and Germany, which provide products for 25 of the 26 Olympic sports items.

Nike is still "one eye" for International Olympic Committee and the London Olympic Organizing Committee, focusing on Olympic stars and advertising.

What kind of effect is better? Actually, it can be seen from the results of all previous Olympic Games: this year's British media survey shows that in the British public awareness, the most closely related brand of the Olympic Games is Nike.

Sponsorship risk of London Olympic Games

In the view of Zhang Qing, the president of the key sports value research institute and the founder of the key sports consulting company, Adidas's failure in sponsoring the London Olympic Games will not only have no advantages in resisting the competition, but more importantly, the enthusiasm of the European market for the Olympic Games is low and the economic downturn.

"This year's Olympic situation is not the same as the Beijing Olympic Games, and it can not be compared, but ADI is still at risk in this Olympic Games.

Adidas has been growing in the single digit market in the European market, while the enthusiasm of the European people for the Olympic Games is not as high as the Chinese who held the Beijing Olympics. The marketing of such events is difficult to stimulate their buying waves for a time. And now, at the time of European economic downturn, Olympic marketing can bring lower benefits to ADI than before.

Zhang Qing said.

Wang Yiming believes that Adidas has been badly hurt by Adidas's negative news, which has been investigated by Olympic Organizing Committee and so on.

In the long run, the close competition between the two giants will continue. With the addition of other European sports brands, the marketing competition is fierce.