became the new CEO of Adidas in October 2016, Kasper Rorsted has come to China twice in less than a year. On April 20, he met with employees of Adidas China headquarters in Shanghai, and then gave an interview to the media for the first time in China. This frequency of visits is enough to prove the importance of China to Adidas.
Greater China is already the fastest growing market in the world for this German sports brand. In 2016, Adidas sales in Greater China increased by 28%. In the fourth quarter, driven by the Adidas sports performance series and sports fashion series, sales in Greater China increased by 25%.
No brand can ignore the Chinese market, so that they all have similar strategies - rapid expansion, occupying market gaps, and starting to cultivate a larger market.
Adidas plans to open 12,000 stores by 2020, and now it has 10,000. Starbucks has also set a similar goal to open 1,800 more stores by 2020, with an average of one store per day. Similar strategies include Muji, Uniqlo, etc. Its old rival Nike is also betting on the Chinese market. It plans to achieve US$6.5 billion in revenue from this market by 2020.
Adidas has also experienced downturns in the Chinese market.
According to data from research organization Frost Sullivan, Nike and Adidas held 18.8% and 14.9% of the market share respectively in China in 2008. By 2009, their market shares had dropped to 10.2% and 9.6% respectively, with Adidas being surpassed by Li Ning. .
In 2010, Adidas China formulated the “Road to 2015” and began to catch up. It began to continuously optimize its channels and inventory management, and planned to expand to small and medium-sized cities.
This is a smart approach. Boston Consulting Group research shows that multinational companies expanding in emerging markets like China have focused on big cities in the past, which will bring about some market saturation problems. Future growth will increasingly rely on smaller cities and more difficult-to-reach remote markets where they have greater opportunity.
Data from market research company Euromonitor shows that between 2011 and 2015, its share of the Chinese market increased from 8.5% to 13.8%, significantly reducing the distance from Nike.
And this strategy will still be one of Adidas’ future expansion directions. So far, Adidas has entered more than 1,000 cities in China and opened a total of 10,000 stores. “In China, we have studied a total of 2,000 cities and currently have stores in 1,000 of them, which means there will be opportunities to open stores in about 1,000 cities in the future.” Colin Currie said, “We also believe that these emerging cities The future growth of cities will account for 50% of our total growth. But the number of stores we open in China is not a problem. The key is that we can open good stores. Pay attention," he added at last.
Colin Currie's so-called "good" can be understood as complying with market demand. Any brand is eager to find new growth drivers from market segmentation and personalization, but the key is to accurately grasp the trend.
These are more reflected in first- and second-tier cities where consumption is becoming more and more mature.
Adidas selected 21 cities based on factors such as economic conditions, past sales performance, etc., plus Hong Kong and Taiwan to form 23 key cities. These 23 key cities account for 50% of the revenue in the Greater China market.
After conducting research on these key cities, Adidas has seen new opportunities in some segments. For example, since 2014, Adidas has begun to open women's stores in China, located in new first-tier cities such as Shanghai and Chengdu, earlier than competitor Nike.
is located in several Adidas women's stores in China. The product display and lighting tones are softer, and wooden furnishings and interiors are used. The products sold are also the running, training and yoga series with the highest consumer demand among women, as well as the more fashionable designer collaboration series adidas by Stella McCartney.
According to data from FT Confidential Research, a research service organization of the British Financial Times, in the fourth quarter of 2016, Adidas surpassed Nike to become the most popular sports brand among Chinese female consumers.
Adidas is trying to copy this model to more areas, such as football, children and other market segments. Guangzhou Tianhe City Plaza is the only Adidas football flagship store in the world, providing all Adidas football products, including equipment for many Adidas giants teams including Manchester United, Real Madrid, and AC Milan, and also has exclusive hot stamping services. .
"Shopping experience is very important to consumers." Colin Currie said in an interview with Jiemian News, "General stores have a limited lifespan. In order to attract consumers, regular store format updates are very important." What he called important , means that after the store is upgraded, the sales performance per unit area has also improved. As a result, some dealers are enthusiastic about store upgrades. "In the past, we were just a pure brand owner, but now we are also learning to do retail."
But as you can see, its competitors are also doing similar things. At the same time, Adidas's competitors are now not just Nike or other sports brands.
If you have been to Huaihai Middle Road in Shanghai on the weekend, then you will understand that competition in today's consumer market is fierce. On this road, there is an Adidas "Rubik's Cube" (this is its name for this flagship store), which has been competing with Nike and puma here for a long time. In the past two or three years, the new sports brand Under Armor has opened a new store here, Muji has also put one of the world's largest flagship stores here, and a LINE Friends Store selling toys and dolls also opened here at the end of last year. Show up, and the queue to enter the store can be hundreds of meters away.
"After studying the data, we found that in some shopping malls, the customer flow of Starbucks and fast fashion is the same, so Starbucks usually looks at fast fashion brands." Du Bin, general manager of RET's leasing business line, told Jiemian News.
The market boundaries divided by categories are blurring. These brands are launching a new "consumer wallet" battle in the market, so when Rorsted was asked about Adidas's competitors, it would answer like this -
"If If consumers buy its products but not ours, then it is our competitor," Rorsted said. "But as a company, we should focus on consumers, not competitors. It’s Nike, , Anta , or Uniqlo, or some other brands.
