Adidas'S China Strategy -- Insist On Foundry Production To Improve Supply Chain Execution

On the occasion of the opening of the London Olympic Games, as an official sponsor Adidas Adidas The company closed its sole factory in China, which is not in harmony with its recent high-profile development in China.

The factory in Suzhou has only 160 employees. It mainly produces clothing, and even its properties are not owned by itself. Its scale is hardly comparable to that of Yuyuan industry, Adidas's largest foundrier, with tens of thousands of employees and its own industrial park. Adidas official statement said that after the closure of the Suzhou plant, Adidas still has more than 300 foundry factories in China to provide products.

Adidas's annual report shows that until 2011, China was still the largest source country of procurement, occupying 30% of its share, which was 32% 32% years ago. The main reason for the decline is that it has increased the volume of purchases in other countries and diluted the proportion of purchases in China. In terms of sales, Adidas's sales in the first quarter of this year were 385 million euros, an increase of 26% compared to the same period last year, accounting for the first time that global sales accounted for more than 10%. Last year, Adidas group's sales revenue increased by 13%, compared with 23% in the Greater China region.

Footwear as Adidas and Nike Substitute factory The Yuen yuan industry's annual report further confirmed the above arguments. According to the 2011 earnings report, Yuyuan industry increased the total production line from 16.7% to 537, most of which were located in three main production bases - China, Vietnam and Indonesia. There are 255, 140 and 134 production lines respectively, and the figures in 2010 are 226, 120 and 114 respectively. China's stock and increment are still the biggest.

Adidas and other international brands in the domestic production mainly in the form of subcontracting, the factory does not have the right to sell, its products in domestic sales need to export to domestic sales, and China's labor cost has ranked third in Asia, Indonesia and Vietnam 2 times (ChinaBriefing latest survey). So, in terms of domestic market sales, imports from Southeast Asia are produced. shoes The above factors may cause enterprises to disperse risks and shift part of the production line outside.

Although Adidas Suzhou factory shut down, but Adidas's only logistics storage center in China will continue to be retained in Suzhou, and news shows that a new storage center in Tianjin will soon be renovated.

Compared with the more mature markets abroad, it seems that the domestic logistics situation is still not perfect. Some of the major brands of sportswear have long been relying on brand power to store up franchisees and let them take risks alone. This is also due to historical reasons. When we first opened stores in China, we could make money, and basically they were single brand stores. And when the number of brands and franchisees has six thousand or seven thousand stores in the country, there will inevitably be enormous inventory pressure. At this time, the high inventory capacity of logistics is very important.

In the 2004-2008 years, the whole industry was in a stage of rocket growth. After the financial crisis, Adidas also had serious inventory problems, and caused channel turbulence and declining performance. After two years of inventory digestion, Adidas formulated the "2015 strategy" and put forward five growth models and five strategies. It is announced that 2500 new stores will be opened in China before 2015. For this reason, the company has restructured and reorganized its organizational structure for more than half a year, and established the Chengdu office in the western and central parts of China to strengthen the management mode of regionalization and enhance its quick response capability. In fact, in order to keep abreast of market demand in a timely and accurate manner, the logistics and inventory management of the apparel retailing industry largely determines the enterprise's "life and death".

The strategic adjustment of "one opening and one customs" reflects the strategic change of Adidas's "adhering to the foundry production and improving the executive power of the supply chain".