Adidas Looks at the World Cup "The Jedi Counterattack"

Adidas places hope in South Africa World Cup

Since the first business trip after New Year's Day this year, Adidas Group Chairman Herbert Hainer has chosen China, accompanied by newly appointed Greater China Managing Director Christophe Bezu. Hainer said that Adidas will continue to be one of the "leader brothers" in the Chinese sporting goods market. The trump card in his hands is precisely this year's World Cup football tournament in South Africa.

Native sporting goods companies are still chasers

In the first six months of 2009, Adidas accumulated sales revenue of 5.034 billion euros, and the Chinese market accounted for 7% to 8% of Adidas global sales, that is, 352 to 403 million euros, or approximately 3.45 to 3.95 billion yuan. In the same period, Li Ning’s revenue reached 4.05 billion yuan. From a digital point of view, Li Ning’s sales in the first half of last year have surpassed Adidas’s revenue in the Chinese market. According to the financial report released on November 4, 2009, Adidas Group's sales in the third quarter of last year amounted to 2.888 billion euros. After deducting exchange rate factors, it decreased by 7% year-on-year. After the negative growth in the first and second quarters of last year, it recorded the deepest decline.

Therefore, optimistic insiders predict that in 2009 Li Ning is expected to surpass Adidas as the leader in China's sporting goods market.

Hainer said: "We recognize that China's local sporting goods manufacturers do have very strong strength, but I also want to point out that there is a certain gap between adidas and Nike and China's local sporting goods companies, and Chinese domestic companies still catch up. The role of the player will not change in the short term. Adidas will still be one of the top or most leading manufacturers in the Chinese market."

Having said that, Hainer and Du Berry are facing many tough problems. Due to the overly optimistic estimate of the sporting goods market after the Beijing Olympic Games, Adidas’ inventory was high. At the end of 2008, the inventory value of goods was 1.995 billion euros, an increase of 22.5% over the same period of the previous year, which caused most of Adidas dealers to spend most of their time on discounted inventory clearance in 2009, which resulted in substantial discounts. The profits of distributors have shrunk drastically. Adidas's major domestic distributors Belle and Daphne have closed nearly 100 retail stores; some Adidas executives also fled, and Zheng Jie, the general manager of Adidas' sub-brand Reebok China, jumped to the bottom. Anta Sports (02020.HK).

Restructure marketing channels

Re-scrutinizing the Chinese market is an urgent task for Hainer. Therefore, New Year’s Day came to China as soon as it passed. He said: “China is an extremely important market for Adidas, ranking second among Adidas’ global market. At the same time, it is also There is an unlimited potential market, so this time, Du Borui is the head of the Greater China Region. He is a very experienced manager in the Asia Pacific region. He hopes that under his leadership, the Chinese market can truly be more advanced. Floors."

Du Berry's top priority is to rebuild the channel. Adidas sells its products mainly through domestic dealers such as Pou Sheng International. As of the end of 2009, Adidas had about 5,000 retail stores in China. Most of them were opened by dealers. Adidas has very few self-operated stores.

Although encountering the "labor pains" of big distributors such as Belle and Daphne, Du Berry told reporters that Adidas will not change the channel strategy of relying on distributors. He said: "We are a multi-layered idea in channel strategy, first It is also the most important, that is, closer to our channel partners, to give more effective support, this is the top priority; the other is a breakthrough in online marketing, the third is to selectively open self-operated stores ."

On the control of inventory levels, Haina revealed that the third quarter of 2009 had been reduced by 8% year-on-year, and inventory value was reduced to 1.652 billion euros. Du Berry said: "In terms of supplying suppliers to the channel, we will use more novel methods. We hope to achieve breakthroughs in the supply cycle, replenishment methods, and cross-departmental forecasts so that we can effectively control supply. The level of inventory in the chain is expected to return to normal levels (around this year) in June."

Looking to the South Africa World Cup

Hainer is cautiously optimistic about the prospects for 2010, but is full of the South African Football World Cup: "First of all, the South African World Cup is the world's largest event. At the same time, football products are Adidas's housekeeping products. We have high hopes. We are the official FIFA. Sponsors, suppliers of authorized products and equipment suppliers, including football referees, caddies, sports products used by volunteers, and outdoor advertising on the spot will all appear to us. Four weeks ago, we launched a new World Cup in Cape Town. A generation of football - JABULANI football, this is an epoch-making product. In the sponsorship of the national team, in 2006 we sponsored 6 national teams, this time we sponsored 12 teams, including host South Africa, with at least 100 Around the name of the player has received our sponsorship.Every month before the formal opening of the World Cup in South Africa, we will launch new products, football shoes, including Falcon football shoes, F50 football shoes, etc.; in addition to the game ball, in addition to JABULANI, the final With the golden ball, we will also launch new products; on the player's jersey, we will also be irregular Launch new products."

At the 2006 World Cup, Adidas had sales of 10.084 billion euros, a dramatic increase of 52% year-on-year. For the first time in history, sales exceeded 10 billion euros. At that time, only football income grew by 30% to more than 1.2 billion euros.