Adidas Will Open More Stores In More Cities In China This Year.

When international brand Nike, domestic brands such as Lining, Anta and so on all experienced a decline in performance and general contraction, Adidas, another global sports giant, did the opposite and expanded in China. Following the opening of 800 new stores in China last year, Adidas once again said it would open more stores in more cities in China this year.

Adidas's latest first quarter results in 2013 showed that its sales revenue in the first quarter was 3 billion 751 million euros, down 2% from 3 billion 824 million euros in the same period last year, while the same period last year achieved an increase of 14% over the same period last year. Net profit was 308 million euros, an increase of 6% over the same period last year, and the growth rate was also significantly lower than that of last year's 38%. However, its gross profit margin increased by 2.4 percentage points to a record 50.1%.

Adidas's sales in the same period in Greater China were 409 million yuan, up 6% from the same period last year, but its growth rate also declined sharply compared with 26% in the same period last year.

In the overall downturn of the sporting goods industry, Adidas's performance has been quite good. By contrast, Nike's performance is much darker. After the first quarter net profit fell 12% in the 2013 fiscal year, Nike's net income in the second quarter dropped another 18% to 384 million US dollars. Affected by inventory, Nike's Greater China region's revenue fell 11% to $577 million. Insiders pointed out that Nike's decline was mainly due to frequent problems in its channel management, resulting in increasing inventory pressure.

In Adidas's latest 2013 annual development goal plan, sales revenue this year is still expected to increase slightly. According to the plan, despite the high degree of uncertainty in the global economic outlook and consumer spending, the high coverage of the group's fast-growing emerging markets and the further expansion of retail business will still have a positive impact on Group sales.

In fact, Adidas's strategy in China has changed a lot since last year.

First of all, from the choice of stores, about 2/3 of the 800 new stores opened by Adidas last year were located in three or four line cities, or even lower level townships. Earlier, Adidas had planned to sink to 1400 low level cities by 2015. Adidas's strategy of "going to the countryside" will undoubtedly suppress and squeeze local sports brands that originally attacked China's low line market.

Secondly, in terms of business development, Adidas is trying to make the brand "less athletic" instead of being more fashionable. Outdoor products and children's wear have become the two main directions of Adidas this year.

It is worth noting that Adidas's supply chain strategy in China has also undergone tremendous changes. On the one hand, we should lighten the lowest profit production chain in the supply chain and close the Suzhou plant; on the other hand, we should strengthen the logistics and distribution links and invest in the construction of new distribution centers in Tianjin.

In addition, for five years, the "ADI" trademark and "Adidas" trademark dispute case, media reports recently, the two sides have reached a settlement. However, Adidas told our reporter that the relevant case is still under trial and the agreement has not been finalized.