ADI Is Crazy To Save Himself And Wants To Rely On China To Turn Over. 50 Percent Off Promotion Is Far From Enough.

Recently, Adidas signed a cooperation agreement in Suzhou to increase investment in China's supply chain. Behind this move, the global market depression caused by the epidemic has once again shown its importance to the Chinese market.

In the first quarter of 2020, the world's second largest sports brand Adidas (Adidas) suffered a heavy blow. Net profit plunged by 96%. Affected by the new global crown epidemic, over 70% stores were closed.

From the official website to the flagship store of the electronic commerce platform, Adidas has conducted various discount promotions in the past two months.

All kinds of voices about giants falling down from the altar are constantly on the horizon. What they really want to say is that the global giants like Adidas are still the same. What about other brands?

This is not the end of the giants, but the uncertainty of life and death that the entire clothing and apparel industry is facing under the uncertainty of the epidemic situation. This dilemma has exposed some important problems thoroughly.

Giant crisis!

No, it's industry turbulence.

Adidas is still the second most popular sports brand in the world. Although it used to be a two-year "little three" under the suppression of Under Armour, it eventually took back the position of the second place and proved its market position in.

This time, Adidas's data are really frightening. According to Adidas's earnings data, excluding the impact of exchange rate factors, in the euro, Adidas's revenue in the first quarter of 2020 dropped 19% to 4 billion 753 million euros, operating profit decreased 93% to 65 million euros, net profit 26 million euros, down 96% compared to the same period, and 631 million euro in 2019.

At the same time, Adidas issued a profit warning. In the second quarter, I am afraid that sales will suffer a further decline. The decline will be more than 40%, and profits will be negative.

Although the sales growth of e-commerce channels reached 35%, it increased by 55% in March alone, but it is far from being able to compensate for the loss of overall performance.

The most frightening thing is that 70% stores are still closed, and adieu's inventory is over 1 billion 600 million euros (about RMB 12 billion 420 million yuan).

According to surging news reports, under the enormous financial pressure, the Executive Board of Adidas stopped the stock repurchase of the company, gave up the short and long term bonus in 2020, and even the next leadership's long-term bonus was cancelled.

On the one hand, on the one hand, Adidas also postponed paying the store rent on the one hand with the landlord of the shop. On the other hand, it also borrowed 3 billion euros from Germany's banks to repay the loan on the condition that the dividend payment was suspended during the loan period. In late March, Adidas was also reported to be in arrears of advertising fees, and the reason was also that the production and operation were hindered by the epidemic.

In fact, Adidas is only a microcosm of the whole industry, and the giants of the sports brand market are having a hard time.

According to foreign media reports, the world's first sports brand Nike (Nike) is expected to end sales in the fourth quarter ending May, which will drop by about 34%, losing about 3 billion 500 million dollars, and the share price fell nearly 16% since the beginning of the year. Foreign research firms believe that Nike's revenue loss may exceed $5 billion 500 million in the next three to six months.

Andemar's latest earnings report also showed that business income fell 23% to $930 million over the three months ended March 31st. Net loss in the period was US $589 million 700 thousand, compared with net profit of US $22 million 480 thousand in the same period last year. Since April, 8 of the world's business has been suspended. Two quarter revenue is expected to decline 50% to 60% over the same period.

This is true of the three international giants, and the days of domestic brands are equally hard.

In the past month, several major domestic brands' performance reports have also been released. Anta's retail sales in the first quarter were the highest loss of 25%, while Lining's retail sales fell by 10% to 20%. XTEP's retail sales fell by 20%-25% compared with the same period last year, while the retail sales of 361 decreased by 25%-30% compared with the same period in 2019.

Although the domestic epidemic has been effectively controlled, all industries have seen the hope of recovery as soon as possible. However, although the epidemic is the most direct cause of these effects, the crisis is more like a mirror for these brands themselves.

The stores closed, and thousands of games were cancelled.

Affected by the epidemic, the retail and wholesale sales of these brands have been greatly affected.

1, store closes

Adidas has over 7 stores in the world to suspend business, and many of its stores in China also have many business moratorium. Nike also closes most of the stores around the world, and so does many other brands.

This also shows that even online sales are growing rapidly, but offline stores are still their main battleground, and this situation can not be changed in a short time.

2, declining willingness to consume

The impact of long time not being able to go out freely, income decline or even unemployment will be great for consumers' consumption enthusiasm, and it will directly lead to a big drop in sales volume.

It must be noted that although the quarterly sales data of the major brands show that ADI sales increased by 35% in the first quarter, the growth of e-commerce sales in the first quarter of Nike was more than 30%, while the sales of other brands, Andrew, Puma and domestic brands also achieved double-digit growth, but they had to face two realities.

1, online development is insufficient, and relies heavily on offline.

Online sales grew by 35%, but overall sales fell by 19%.

According to ADI's earnings report, in 2018, ADI's revenue grew by 36%, more than 2 billion euros, and in 2019, the electricity supplier income increased by 34%, which is close to 3 billion euros. According to the plan made by Adidas in 2018, by 2020, the sales volume of 4 billion euros of electricity providers will account for about 12% of the total business.

In fact, since Adidas has entered Tmall in 2009, and has opened three flagship stores with sub brands, the growth of ADI business has been kept in two digits until 2016, when e-commerce channel priority strategy was established.

But by comparing the data, we can see that ADI and Nike account for a small proportion of the online business of the big international brands, indicating that the dependence on the line is still too heavy, while the layout of some domestic brands in the electricity supplier is obviously faster.

Lining's electricity business growth in the first quarter was only between 10% and 20%, but in the total revenue in 2019, the proportion of electricity providers accounted for 22.5%. Anta plans to increase the proportion of electricity providers to 20% in 2020. According to the momentum of 40% growth in the first quarter, it is not difficult to achieve this proportion.

And in recent years, driven by market trends, online business has almost become the focus of all brands.

2, the cancellation of global events, the brand exposure rate is greatly reduced.

As described in the Internet on 2020, 2020 is a sports year.

In addition to the Tokyo Olympic Games and the European Cup, there are various international competitions. The first half of the Australian Open, flower skating four championships, China Super League, CBA playoffs, table tennis world championships, F1 China Grand Prix, world women's Volleyball League, the second half of the year is the Wimbledon open, the WTA finals, the table tennis world cup and the Shanghai heroes League S10 finals.

These events are excellent brand exposure opportunities.

However, Two Circle, a sports data marketing agency, released a set of data in April, showing that there were 49803 major sporting events in the world in 2020, but only 26424 games could be held, and more than 23 thousand games were cancelled or postponed.

Although both ADI's CEO Kasper Rorsted or Nike CEO John Donahoe said that the impact of the cancellation was not as big as expected, Kasper Rorsted said that the European Cup and the Tokyo Olympic Games would affect about 50 million euros of ADI's corporate finance, and they believed that the brand itself had enough competitive advantage.

However, the inventory pressure is real and can not be evaded. The electricity supplier alone can not digest it in a short time.

Shuffling will not happen.

Under such circumstances, will the market shuffle?

In the history of the international sports brand market, the seats among major brands have been changed for several times, which is full of drama.

In the history of Adidas, Adidas founded in 1949, which has dominated Nike, which founded Nike in 1972. But in the course of decades of development, Adidas missed many opportunities because of a series of misjudgments in the market strategy. All these opportunities were seized by Nike, and in one attempt to defeat ADI, it became the first in the industry, for example, just now, just from NBA, a professional basketball superstar. After joining the NBA, she signed a contract with Air Jordan, still a hot brand, and signed many NBA superstars.

In addition to entering the twenty-first Century, Chinese players have made their debut in NBA, and Chinese audiences are increasingly concerned about NBA. Although there are some disputes between Nike and Yao Ming, when Chinese audiences are paying more and more attention to NBA, Nike is also paying attention to the Chinese market and paying attention to the Chinese market.

ADI always can't really surpass Nike, and was once surpassed by black horse Andrea, falling from second brands to third. ADI is surpassed by Andrew. It should be said that under the background of the outbreak of the fitness market, in the field of professional sports and fitness, Andrea has surpassed the car, but with the brand background and market position, Adidas also quickly fought the battle.

In the past few years, in the past few years, the trend of the fashion trend has made the adidas such as Stan Smith small white shoes, shoes and coconut shoes with more attention and attention to the development of sports and fitness products, so that ADI has recovered the field, but it is still far away from Nike.

Looking at the domestic market, Chinese brands are also making efforts in recent years. The two brands of Anta and Lining are gaining momentum. Anta has already surpassed Adidas's market value.

But market shuffling is almost impossible.

Mr. Li Wenliang, founder of Ningbo Zhixing electric business group, and vice president of the technology group, said in an interview with entrepreneur state that several head international sports brands in today's market have occupied the minds of consumers, and are constantly doing brand image enhancement.

He believes that it is possible to have dark horse in the global market. For example, in the past few years, the sudden explosion of andmar, specializing in yoga clothing lululemon, can be called a dark horse, but the possibility of shuffling is almost none.

However, there is one point, that is, the electricity market share is bound to be bigger and bigger, because online consumption has become a habitual consumer behavior, and 5G will make the video marketing in the electricity supplier more active, and the traditional mode and thinking are gradually replaced by the new marketing mode.

The two outbreak, but don't empty the electricity supplier as Savior.

The role of the electricity supplier has become an important complementary form from the past entity stores and its rivals.

In the first quarter of 2020, online sales of almost all sports brands increased significantly, on the one hand due to the closure of offline stores, and on the other hand, the discount sales promotion of various brands to clean up inventory.

For the loss of physical stores, the electricity business is far from being able to offset losses, but the rapid growth of e-commerce business has brought hope to these brands.

Next, they will also pay more attention to the development of e-commerce business and pay more attention to the Chinese market.

Although the market share of Adidas and Nike in China is still far higher than that of other peers, Li Wenliang, who also loves basketball, believes that the main reasons why sports brands such as ADI and Nike can not cover the losses under the line are the following:

First of all, experience.

Whether ADI or Nike, or other sports brands, there are some high priced products. Sneakers and sneakers are their own products, many of which are priced at more than 1000 yuan. Consumers purchase these products must be based on offline experience before deciding whether to buy them, because these products are applied to the brand's own scientific and technological achievements.

But the application of these scientific and technological achievements depends on online display, and consumers can not perceive it. So in the end, consumers will not pay for those high priced products online because of brand technology.

For example, Adidas's main technology popcorn sole, the new polymer material, the selling point is elastic and light weight, but exactly how the sole feels, and the so-called cushioning effect, must be really worn on the foot to experience it before we know it.

Basketball shoes products are even more so, because most of the people who buy basketball shoes are those who often play basketball and love sports. When buying shoes, they must try to pass. Otherwise, if they do not fit, they will easily get hurt in the process of intense sports. So are all functional sports shoes and football shoes.

At the same time, these high priced products are the weapons that they can really open the market, but as brands, they do not want to go to much lower prices, so it is hard to get higher coverage on line, and it is hard to fully open sales on line.

The second point, which is also a crucial point, is the product, which can be regarded as a deficiency in the development of foreign brands including ADI and Nike.

When buying foreign brand shoes and sports shoes, many people will say that the new shoes are crowded, but in fact, shoes and feet are not new, but because shoes are not suitable for them, including ADI and Nike. The shoe last is not made according to the Chinese foot type, but is made according to the foot type of Europe and America. Type.

In terms of product design, there is no dedicated product design and development aimed at the consumer market in China.

Third, whether it is ADI or Nike brand, its whole operation and operation are biased towards high prices and not to fall down.

High occupying and beating, occupying the user's mind, constantly instilling brand positioning to consumers, self creating, creating associations and deep marketing to get consumers' trust.

Famous international sports events are important marketing positions of these sports brands, such as the world cup, ADI is one of FIFA's 7 partners, and has been the supplier of the World Cup since 1970.

Every time the world cup, ADI will spend a lot of effort, big price and big scenes to make world cup advertisements. Take the Russian World Cup 2018 as an example, ADI's world cup advertisement "Create the Answer" is strong enough to make people laugh, not only Beckham, Messi, Bo Gang Ba, Suarez and other football superstars, but also stars, singers, fashion KOL, and the protagonists are up to 56. At that time, the world cup, the most sponsors of the brand, sponsored a total of 12 national teams.

It is difficult to satisfy the needs of more mass consumers from a deeper level.

Finally, Mr. Li Wenliang believes that the opportunities for foreign brands such as ADI and Nike are the outbreak of the whole Chinese market. Adidas's increased investment in China's supply chain also proves that the Chinese market has once again attracted their attention.

However, it is important to note that Chinese consumers are increasingly demanding personalized experience, that is, they hope that products and services can be more suitable for Chinese people's preferences, needs and physiological characteristics.

In terms of format, the outbreak has led to another outbreak of electricity providers, but all brands need to think about whether online or offline, but how to integrate online and offline.