Adidas Opportunities And Challenges Are Expected To Develop In The Next Five Years

Farewell to a leader who steered the helm for 15 years. Adidas It is not only the end of an era, but also the beginning of a new era.

In January this year, the German sporting goods giant Adidas ( Adidas AG) announcing a change of command. Herbert Heiner, who has joined the company for nearly 30 years and served as CEO for 15 years, will leave in September this year. Her successor is Kasper Rorsted, CEO of Henkel, the daily chemical group of Herbert. (Hainer)

Haina is the longest serving CEO in Adidas history. In 1987, he spanferred from Procter&Gambler Co. to Adidas, the sales director of sporting accessories in Germany and promoted to Chief Executive in 2001. During his tenure, the group's revenue increased two times, net profit and employee number increased three times, and the group's market value also rose from the original 3 billion euros (about 21 billion 445 million yuan) to the current 18 billion euros (about 128 billion 668 million yuan).

There is no denying that Hainer Adidas has made remarkable progress. In 2002, Adidas was nicknamed "consumers". Clover The classic sports series (Originals) became the first sports brand to try to add sports elements to the fashion lifestyle. At present, the classic sports series has become a Adidas rocking Qian Shu. Even consumers who only know a bit about fashion have heard of NMD or Stan Smith The name of the equivalent explosion.

In the football field, Adidas sponsors Real Madrid, Bayern Munich, AC Milan, Juventus, Manchester and other powerful teams, and cooperate with the world cup, the federation cup, the European Championship and the European Championship. In 2006, Adidas persuaded young Argentina player Messi to spanfer to his team, and now he has proved his great position in football with five golden ball awards. On the list of Adidas stars, there are also stars such as Suarez, Baer, Diego Costa, Pogba, Muller, Mesut Ozil, Neuer, Harbin and so on.

In 2006, Adidas bought the US sports brand Reebok (Reebok) at a price of 3 billion 100 million euros, and signed a 11 year cooperation agreement with NBA. No company will look down on the huge and potential market in North America, but Adidas has been faced with the impact of rivals such as Nike and Under Armour. After the cooperation agreement with NBA in 2017, Adidas turned its attention to the other three major alliances NFL, MLB and NHL, hoping to make a breakthrough in the North American market through strategic spanfer to rugby, baseball and ice hockey. The American dream of unfulfilled ambition may be a pity for Haina and will also be one of the most important tasks of the new Rothd.

To fight for the Asian market, China is a blessing for Adidas and Herbert Haina.

In 2001, Haina began to serve as Adidas's CEO. That year was also the year when Beijing bid for the Olympic Games. In order to expand the Chinese market and prepare for the 2008 Beijing Olympic Games, he began frequent visits to China. Besides visiting business partners, he had to deal with local governments and sports authorities. China at this time is far from his original memory. In 1999, Haina, a member of the Executive Board of Adidas, came to China for the first time to deal with some legal issues concerning the factory in Suzhou. Like many foreigners visiting for the first time, what impressed him most was the endless flow of bicycles in the streets of China nearly twenty years ago.

The Beijing Olympics gave birth to the golden age of sports brands in the Chinese market. But the good days did not last too long, and the branding merchants paid the price for the advance. Before the Olympic Games, many market participants thought that the market demand was very good and very vigorous. We think this demand may be endless, so we have prepared a lot of goods, and the supply is far more than the market demand. " Like all the overly optimistic peers, Adidas also suffered from a backlog of inventory and a decline in retail sales.

"2009 to 2010 is very difficult." Haina said, "during this period, I came to China many times. But I have always stressed that we should take advantage of this crisis to strengthen our position in the Chinese market. In the meantime, Adidas has formulated a five year plan entitled "road to 2015", with the goal of completing 2 billion euros in sales in Greater China in 2015 and striving to become the leading sports brand in China and the world.

This is a task that needs to be jumped up and done. We need to know that by the end of 2009, Adidas ranked fourth in the Chinese sports brand market, lagging behind its old rivals Nike and local brands, Lining and Anta.

Five years later, Adidas delivered a satisfactory answer in the Greater China region excluding the exchange rate factor. In 2015, sales in the Greater China region reached 2 billion 470 million euros (17 billion 650 million yuan), and the growth rate of 17.7% also exceeded the average level of 10% in the world. Adidas has entered more than 1000 cities in Greater China, and the number of stores has increased from 5000 in 2010 to nearly 9000. In terms of market share, Adidas grew by 4 percentage points to 12%, catching up with its old rival Nike. In the first quarter of this year, sales in Greater China exceeded 30%, the fastest growing regional market in Adidas.

At the end of June this year, Herbert Haina came to China again. On the 27 day, he signed a series of cooperation plans with Wanda Group Chairman Wang Jianlin in Beijing. The next day, he attended this year's ordering meeting in Xiamen, Fujian, and entertained thousands of Chinese sales customers.

This is probably the last time Haina has arrived in China as a chief executive of Adidas group at the age of 62. Under his rule, the well-developed sales network in the Greater China region and steady growth in performance will be a great asset for Luo Side, the successor.

Haina is still confident about the future. Today, Adidas has three brand centers in Shanghai, Beijing and Hongkong, occupying half of the global brand center, and the trend of strategic eastward tilt is obvious. According to Adidas's goal, the number of stores in Greater China will be increased to 12000 by 2020, becoming the first sports brand in Greater China.

"The development of China's economy is huge. It is not the same as it was fifteen years ago." With the trend of consumption upgrading in China, Haina is aware of the potential of the Chinese market and will become an important fulcrum for Adidas's sustained growth in the future. "Especially in big cities, young people's fashion ideas, ways of thinking and consumer behavior are very different from those of the previous generation. They are very similar to New York, Paris and Losangeles."

The following is a dialogue between reporters and Herbert Heiner:

Interviewer: you have worked in Adidas for 30 years. What changes have been found in the sports consumption market during this period?

Herbert Heiner: compared with other categories in the clothing industry, sports goods have developed rapidly and steadily in recent years. First of all, people's participation in sports has been greatly improved. There are more and more people taking part in sports in China. There are many running events, such as the Beijing marathon, Shanghai half horse, and so on. Governments also encourage people to take part in sports. Moreover, with the improvement of consumers' health consciousness, more and more people take the initiative to take part in all kinds of sports. This series of factors has contributed to the rapid development of the whole industry.

This is also true in China. I recently saw a sales partner BELLE's statistics show that sales of their sporting goods grew very fast, higher than sales of other categories such as leather shoes.

Reporter: How did Adidas adjust its position in such a change?

Herbert Haina: 30 years ago, Adidas was a pure sports brand. At that time, the most important products in the sports brand industry were sports shoes and equipment that could help professional athletes improve athletic performance. Therefore, 30 years ago, the products mainly focused on functionality, such as football shoes, tennis shoes, basketball shoes and so on. 30 years to this day, Adidas has not forgotten the core of sports brand. Our focus is still on sports, that is, we must strive to help athletes improve their performance. This is a very important aspect.

At the same time, there are also some changes in Adidas, for example, to get close to sports and leisure activities, close to sports as a way of life, to meet this new trend. Because now more and more obvious trend is to use sports products for daily leisure life. Now you can see that many people wear sports shoes and jeans to participate in informal dinner and activities. This is a very fashionable practice, which is the change of dress concept of young consumers. And Adidas is definitely the first company to find such a change.

We discovered this trend as early as 2002. At that time, Adidas divided the products into two parts: one is to continue to be a series of sports performance, and continued to emphasize the improvement of professional athletes' sports performance; the other is the sports classic series (Originals), which made a brand concept spanformation of some previous products and made it more integrated into a way of life. This is the most important change we have had in the past for a long time.

In terms of sports consumption, Adidas has many world-class sports stars. In sports and leisure, we think consumers everywhere pay more attention to local movie stars and entertainers. So in China, we also cooperate with Fan Bingbing and other stars.

Reporter: how does Adidas capture the needs of consumers and adjust product innovation and marketing strategies according to these needs?

Herbert Heiner: the key is to connect us with our retail partners and our consumers more closely.

From the perspective of retail partners, in recent years, our IT system and retailers have been butted, so that we can better understand the sales situation in stores, which stores sell better, and our partners' inventory status can replenish them in time. From the consumer side, we need to have an in-depth understanding of what products consumers are looking for and what their buying drivers are. This also requires us to do more market research, better analysis, and more closely understand consumer preferences.

Let me give you an example of soccer shoes. Two years ago, Adidas had a series of soccer shoes, such as F50, Predator, 11pro and Nitrocharge, but we wanted to understand the real consumers, how did the street consumers look at football. So, we conducted a market research. As a result, we found that there are two kinds of players in football: one is the order players who can control the game. They perform the tactics of the coach perfectly, control the game in the rhythm of the side, and the other are the talented players who ignore the rules, and they can create a killing in the chaotic competition.

So Adidas concentrated football shoes on two categories: Ace and X, for product development. The Ace series emphasizes the ability to touch the ball. The X series focuses on agility and protection for players at high speed. This is a bold decision. At that time, some people were worried that the reduction of category would lead to a decrease in income. But facts have proved that after adjustment, it has not declined, but it has grown.

Reporter: fashion and leisure business, including sports classics, has made a great contribution to Adidas. Adidas is also actively working with fashion designers. Many products are also recognized by fashion loving consumers. Do you prefer Adidas to be a more fashionable fashion brand or a professional sports brand?

Herbert Heiner: Despite the fact that Adidas is the first brand to focus on sports and leisure products, there is no doubt that we have always stressed that Adidas is a brand of sports performance. Our aim is always to provide competitive athletes with the best products to help them improve their athletic performance.

Let me give you an example. Adidas's latest running shoe technology, BOOST, was originally invented to help runners improve their running performance. But we can also see that many young consumers wear these shoes for shopping, because their soles are very advanced and are very comfortable to wear. But for this product itself, his starting point is to improve running performance. In addition to running and sports and leisure, we are also using this technology in basketball and football shoes.

In terms of market input, Adidas has signed some star artists as spokesmen in recent years, but its investment in sports has not been reduced. In China, we have cooperation with teams such as Beijing marathon, Shanghai half marathon, and Chinese women's volleyball team, tennis player Xu Shi Lin and other teams and athletes. At the same time, Adidas also carried out campus football activities with the Ministry of education to promote the development of youth and mass sports. In terms of sports and entertainers, Adidas's investment is relatively balanced.

Reporter: Nowadays, more and more players in sports market are becoming more and more subdivided. The price of sports stars and sponsorship contracts is getting higher and higher. Fast fashion brands also want to get involved in sports and leisure products. What are the advantages of Adidas in this competition and what are the major challenges?

Herbert Heiner: as mentioned before, the potential of the sports industry is very large. I think that in this industry, Adidas's chances are still the biggest. The growth of Adidas is currently the fastest in the industry. We believe that the potential of the whole future development is very large both in the world and in China.

A series of major sporting events are underway. There are Adidas sponsored teams and players in the European Cup and the Copa America, including teams like Argentina, Mexico, Columbia, Germany, Spain and many other excellent players. As well as the upcoming Rio De Janeiro Olympic Games, all of these will arouse many exciting points in the whole sports field. Therefore, we believe that with the influence of Adidas, we can attract the attention of young consumers under the impetus of this series of events.

When it comes to challenges, I think the biggest challenge we face now is how to rapidly increase our capacity to meet the needs of the market. For example, the total number of sports shoes produced by us last year totaled 300 million pairs, which is expected to increase by 15% this year, which means that we need to produce more than 45 million pairs of shoes. This means that three new factories need to start up, and we expect that there will be such a growth trend in the next five years. So for Adidas, how to rapidly expand production capacity and meet market demand is the biggest challenge now.