Adidas'S Sinicization Market Is Becoming More And More Clear.

"We do not have any plans to evacuate the factory from China."

In October 27th, Adidas's (ADIDAS, Berlin: ADS.BE, hereinafter referred to as ADI) issued a statement to reporters in response to the rumors of Adidas's withdrawal from China.

"China will continue to be Adidas's most important production base."

In November 14th, Adidas stressed again to reporters.

On the contrary, Adidas is more and more reliant on the Chinese market.

Adidas's three quarter earnings report in 2008 showed that in the bad moments of the global economic downturn and the decline in the North American market revenue by 17%, in the first three quarters, ADI's sales in the Asian market increased by 16% to 1 billion 875 million euros.

China plays an important role in the Asian market. For Adidas, China is gradually moving from manufacturing factories to strategic markets.

It is a long time since the rumors of Adidas shift in China.

In July 28th, France's "Le Figaro" reported that Adidas global CEO Herbert Heiner told the German economic weekly that wage standards set by the government have gradually become too high in China, and the company hopes to withdraw from China partially and move to cheaper labor areas.

Reported that Haina also explained that Adidas has "opened the first factory in India", and "Laos, Kampuchea and Vietnam" is also considered a better choice.

Since then, Haina has clarified in China in August 8th: "Adidas has no intention of withdrawing any of China's production lines, but will increase production in China."

In October 17th, Bi Baoyuan, vice president of Adidas Greater China market, said in an interview with our reporter that about 55% of Adidas's products are produced in China. "This proportion may fluctuate in the future, but the change will not be too great."

It is understood that, for cost reasons, Adidas outsourced more than 95% of its production to independent third party factories.

Its 1070 foundries are distributed in 67 countries around the world, most of which are concentrated in 6 countries such as China, India, Indonesia, Thailand, Turkey and Vietnam.

At present, ADI has 264 foundries in China, involving a total of 300 thousand employees.

In 2007, Adidas purchased 201 million pairs of shoes on the Chinese market, accounting for 49% of its total global purchases; 252 million sets of clothing accounted for 32% of the total; 39 million sets of accessories accounted for 65% of the total.

The importance of China made to Adidas is self-evident.

Are these Chinese made OEM factories evacuated?

Guo Weiwen, a spokesman for WAN bang, a foundry factory in Qingyuan, Guangdong, told our reporter that the orders of Wan Bang had not been pferred. The factories in Qingyuan still maintained 1 million 100 thousand to 1 million 200 thousand pairs of shoes / month's capacity.

It is understood that from 1996 onwards, Wan began to work for a Adidas company.

"It is risky but also an opportunity to do so."

Guo Weiwen said frankly.

Over the past ten years, with the growth of Adidas's sales volume, the capacity of Wan Bang has been increasing.

In cooperation with Adidas for nearly 30 years, Chen Fangmei, spokesman of Taiwan Baocheng group, the world's largest sports shoe manufacturer, told reporters that Baocheng's capacity in mainland China is increasing.

"We do have factories in Vietnam and Indonesia, but they were built more than 10 years ago, and there is no definite plan to build a new factory."

According to Chen, Baocheng's production ratio in mainland China is over 50%. At present, production will not be considered. However, some of the new production lines will be invested in inland provinces such as Jiangxi and Anhui. At the same time, Southeast Asia and other places will be considered.

This also confirms the explanation of Adidas global CEO Haina.

In clarifying hearsay, Haina acknowledges that ADI is facing pressure of rising costs in China: growing energy costs, strict environmental policies, no longer favorable tax policies, lack of skilled workers and strong Renminbi against the US dollar.

As a result, "the proportion of China's global total production capacity will be reduced", but "absolute numbers must be increased".

The rise of manufacturing in Southeast Asia is not easy.

Some people in the industry disclosed to reporters that due to poor production and management, high cost and low production efficiency resulted in a loss of $about 8000000 last year in the India shoe factory.

In addition, South Korea's Adidas factory in Qingdao moved to Vietnam but moved back to Inner Mongolia, China not long ago.

"ADI wants to go, but the reality is not going."

In this regard, the Secretary General of the Asian Footwear Association Li Peng gave an explanation to reporters.

He said that since China's footwear industry has developed over the years, it has developed into the present scale. It is far superior to Vietnam, Indonesia and other Southeast Asian countries in terms of production technology, workers' quality and matching. Therefore, many factories in Southeast Asia are far less efficient than China.

"At present, the foundries set up factories in Southeast Asia are mainly designed to meet the needs of the global layout of customers, as well as to circumvent anti-dumping duties."

However, these failures may be just an episode on the road of factory pfer.

According to the latest prediction of the footwear association of Asia, from July 2007 to June 2010, the footwear industry in mainland China will expand or shift to 10% to 15% in the Southeast Asia and other places in the three years.

Of course, Adidas's foundry also includes.

This is not the first factory migration Adidas faced.

In the past few decades, Adidas's global sourcing strategy is pursuing cost advantages.

In line with the pfer path of the world shoe industry, the production base of Adidas moved from Europe and America to Japan and Korea in the 70s of last century, and entered China's Taiwan region in 1980s. In 1990s, it began to shift to mainland China due to the appreciation of new Taiwan dollar and the rise in labor costs.

Among them, in the first pfer in 1970s, ADI's rival Nike reacted quickly, and when the cost of shoemaking in Europe and the United States began to rise, the global foundry moved from the United States to Asia.

On the contrary, at that time, ADI was slow to respond, resulting in high cost and was left behind by Nike.

This time, ADI no longer waited for the situation to change.

"100% confirmed. We just had a conference call with ADI.

The future manufacturing base will shift to Southeast Asia. At the very least, some of the new capacity will shift. "

An analyst who studied Adidas told reporters.

It is understood that footwear giants are generally sensitive to price, and Adi less than 50% gross profit margin is also lower than the domestic Lining and other footwear enterprises.

Therefore, in face of the labor cost of 500-600 yuan / month in Vietnam and other places, Adidas certainly can hardly stand alone in China.

"Overseas labor is cheaper, so on the basis of maintaining domestic production, overseas factories will continue to develop."

Guo Weiwen, a spokesman for WAN Bang shoes, explained to reporters.

Baocheng group also said: "the production here in Guangdong will be relatively stable. In the future, it should turn to produce some products with high added value".

However, industry analysis shows that such pfer is still difficult to achieve within one or two years.

In view of the huge proportion of China made in Adidas products, it is impossible for ADI to pfer orders quickly, except in an emergency.

China's production capacity is likely to increase, "for example, it adds 10% of its production capacity to 2% in China and 8% in Southeast Asia.

The whole pfer process may last 8-10 years.

China's market positioning is gradually fading away from the manufacturing plant's aura, which does not mean that China's position in Adidas is declining.

On the contrary, "the Chinese market is very important for ADI, and will become more and more important in the future."

Bi Baocheng told reporters.

A series of figures gave a strong annotation to Bi Baocheng's judgement.

According to statistics, the average annual growth rate of China's sporting goods market has reached 30% over the past five years, and Adidas has obviously shared this growing feast.

Adidas's 2008 third quarter earnings report, released in November 6th, showed that Adidas's sales revenue in Asia increased by 16% in the first three quarters, and that the figure would be 23% if the negative impact of exchange rate was deducted.

Quarterly reports show that in the first three quarters of 2008, Adidas's global sales revenue reached 8 billion 225 million euros, an increase of 4% over the same period last year.

Among them, European sales revenue was 3 billion 776 million euros, an increase of 9% over the previous year, and sales revenue in North America was 1 billion 871 million euros, down 17% compared to the same period last year. Meanwhile, sales revenue in Asia and Latin America increased by 16% and 34%, respectively, reaching 1 billion 875 million euros and 647 million euros.

Asia has surpassed North America and has become the second largest market of Adidas.

This is the result of sustained growth in the Asian market for many years.

According to statistics, in the past 10 years, Adidas's sales revenue in Asia grew at an average annual rate of nearly 20%, and its share of global sales increased from 8% in 1998 to 22% in 2007.

On the contrary, the North American market has seen a number of decline in sales since 2000, especially since the first quarter of this year, with a decline of more than 15%.

In addition, the growth of the European market is slow, and the prospects for Latin America are broad, but the market base is very small at present. The important position of the Asian market is highlighted here.

Although the report did not disclose the specific figures of the Chinese market, it is certain that China has contributed a lot to the growth of the ADI Asian market.

"In the first three quarters of this year, ADI's sales in China increased by more than 50% over the first quarter of this year," Adidas global CEO Haina said at a global conference call in November 7th.

Adidas expects sales in the Chinese market to exceed $1 billion in 2008.

"According to the current development, Adidas's sales in China can reach 1 billion euros in 2010," Haina said.

In order to achieve this goal, ADI has increased the strength of the Chinese market.

"Our more than 4000 storefront covers more than 450 cities in China."

Bi Baocheng briefed reporters.

In addition, the world's largest brand Center settled in Beijing, the establishment of the Asian design center in Shanghai, and the cost of 1 billion 300 million yuan to complete the role of the sponsor of the Beijing Olympic Games, Adidas in the Chinese market is not too small.

"We plan to increase the number of shops in China to 5900 by the end of 2008, and increase to 7200 in 2010."

Adidas global CEO Haina is ambitious.

In the eyes of Adidas, the identity of China's strategic market is becoming clearer.

Yang Jing: editor in charge