Blue Whale Interview|Xiao Jiale, Managing Director of Adidas Greater China: Continue to increase the "Created in China" product line

On December 16, at the Adidas 2024 Autumn and Winter New Product Ordering Conference, Xiao Jiale, managing director of Adidas Greater China, was interviewed by the Blue Whale financial reporter, and he told reporters that next year in Greater China, he will continue to increase the localization of the "Created in China" product line, increase investment in sports, do more grassroots sports, and help healthy China and national fitness. In addition, while consolidating the advantages of large stores in key cities, Adidas will also increase the speed of opening stores in third-tier cities and the construction of brand image.

Greater China maintained "quality growth" and increased the speed of store opening in third-tier cities

Talking about the business performance in 2023, Siu Ka Lok said frankly that the retail environment this year is very competitive, especially online, and consumers are particularly sensitive to product prices and promotional activities. "But we're very pleased to see that Adidas is very focused on making good products, improving product capabilities, and our discounts are much lighter than in the past, which has also led to an increase in business. "In 2023, we have achieved a transition from 'quality recovery' to 'quality growth'. In the second quarter of this year, Greater China returned to growth, and in the third quarter, it also achieved double-digit growth, which also reflects the recovery of China's economy and offline consumption. ”

According to the financial report for the third quarter of 2023, in the third quarter of this year, Adidas Greater China achieved revenue of 870 million euros, a year-on-year increase of 6%, and a year-on-year increase of 10% excluding Yeezy business.

As for the reasons for the growth, Xiao Jiale said: "Behind the growth of performance, it is not only due to Adidas's adherence to the concept of 'in China, for China', and the positive effect brought by changes in product design and flexible supply chain upgrades, but also due to the continuous recovery of the popularity of the Adidas brand." Driven by Messi, Harden, and Mitchell's trip to China, as well as the popular shoes Samba series and Fear of God co-branded models, Adidas has won the favor of more and more consumers, and offline stores have also frequently queued up for shopping. ”

With the increasingly fierce competition last time, consumers have become more sensitive to price, and there are voices of consumption downgrading in the market. In this regard, Xiao Jiale put forward a different point of view: "Now consumers are becoming more and more rational, they must see that products are of quality, valuable, different from others, and have their own stories. Rather than downgrading consumption, I think it should be consumption grading, and even some consumption is upgrading, consumers are demanding more and more, maybe the same price, hoping to exceed past expectations in functionality, personality, and brand story. Everyone knows Adidas German training shoes, we have Gazelle, Samba, Spezial, Campus, and next year we also have a new model - SL 72 of the German training shoe series, which has attracted a lot of attention from consumers. Since the beginning of this year, our German training shoes, especially Samba, have been in short supply, and they are sold out quickly as new Samba goods arrive in stores. This year, there are also ADIZERO running shoes, which are constantly iterating and constantly improving the technology and technology of the product. THIS YEAR WE LAUNCHED OUR NEW ADIZERO RUNNING SHOE, THE ADIZERO ADIOS PRO EVO 1, WEIGHING ONLY 138 GRAMS, WHICH IS THE LIGHTEST AND MOST FUNCTIONAL RUNNING SHOE IN ADIDAS OR EVEN TODAY. On similar products, consumers are not so sensitive to price, and their demand for products is very strong. When Argentina and Messi visited China, the jerseys of our Argentine team were all sold out two days before the game. It can be seen that as long as there are good products and good stories, it may produce a scene of 'consumption upgrading'. ”

Although the product strength and brand popularity are constantly improving, during the market recovery period, some actions of Adidas in China have also caused concern in the market, such as the recent closure of Adidas' flagship store in Shenzhen, which has attracted a lot of attention. In this regard, Xiao Jiale believes that this is a very normal business practice: "Now Adidas has more than 7,000 stores in the Chinese market, which is quite a huge number. At the same time, the current retail ecosystem is very complex, with online and offline forms, and it is very normal to open and close stores. With the transfer of time, many business districts have also changed, and the business districts that had a good passenger flow a few years ago may change a lot after three years. Whether it is closing a store or opening a store, we hope to make better use of resources and give consumers a better experience, so we will choose to open a brand flagship store or brand center in a business district with a high customer flow and many young consumers will go. ”

"In fact, we have opened a lot of big stores this year, and we have opened a lot of big stores or brand centers in many places in Chongqing, Guizhou, Shanghai, Shaanxi, and Hainan. "Next year, we will increase our efforts to develop sales channels in some emerging cities in China (third, fourth, fifth and sixth tier cities), and now consumers in third, fourth and fifth tier cities are also upgrading their consumption, and the demand is getting higher and higher, which is definitely something that needs to be taken into account as a sports brand." In 2024, adidas will increase the speed of opening stores in third-tier cities and building its brand image. ”

Running, football, and training are the top priorities next year, and we will continue to increase scientific and technological innovation

"Adidas has always performed well in sports technology and sports products. When asked about using one word to represent the Adidas brand, Siu Ka Lok said, "I hope that consumers will feel that Adidas is a brand that loves sports very much, and I hope that more consumers will see Adidas' investment and efforts in sports and sports." Adidas has always advocated 'changing lives through sports'. ”

Talking about the focus of next year's sports category layout, Xiao Jiale pointed out, "Running, football, and training are the top priorities next year. "Taking running as an example, with the continuous improvement of the national economy and health awareness, running has become the most popular sport. Adidas has always paid close attention to the trend changes in the running market, and has remained focused, down-to-earth, and made changes with the times, constantly upgrading and innovating running shoe technology to better meet the consumption needs of the majority of runners.

With the continuous improvement of living standards, the health awareness of the Chinese people has been continuously improved, and running, as a simple, easy and effective way of exercise, has become the most popular exercise. Data shows that more and more people are joining the ranks of running, with the participation rate of up to 60%, and the number of runners in China exceeds 500 million, forming a large-scale running culture. Currently, the running market is the largest sports category: hundreds of millions of runners give birth to a huge market. The retail scale of the running market is as high as 80 billion yuan a year, accounting for 23% of the retail scale of China's sports market, making it the largest sports category. According to Ipsos Consumer Market Research, the national running market in the first half of 2023 will grow by double digits in the first half of 2023 compared to the second half of 2022. Among them, the market share of Adidas running category has achieved steady growth.

With the continuous expansion of the running market, more and more sports brands have begun to focus on the running market, whether it will bring pressure to the development of Adidas in the running field. In this regard, Siu Kalok said: "Overall, we feel that the running market has great potential, more and more people are participating in running, and more and more brands are paying attention to running. This is a good thing, for a sports brand with a history of nearly 75 years, the more sports brands pay attention to running, as long as it is healthy competition, jointly develop and create better products for consumers, so that consumers have more benefits, I hope that everyone will change their lives through sports, so that more people can participate in running, enjoy the experience of running, and enjoy the charm of running. ”

At present, Chinese consumers' demand for running shoes is becoming more and more segmented and diversified. Xiao Jiale said, "Now consumers need running shoes to be functional, whether they are comfortable, whether they are protective, and whether they are light enough, on the other hand, consumers also need to show their own personality, not only pay attention to functionality, but also pay attention to appearance and appearance." ”

In response to the needs of different consumers, adidas has created technological innovation platforms such as ADIZERO, SUPERNOVA, ADISTAR, ULTRABOOST, and 4DFWD to form a rich running shoe product matrix. Whether you're an elite runner or a running enthusiast, whether you're racing or training, consumers can find the right running shoes for them at Adidas.

"Next year, we will continue to make efforts in technological innovation and design innovation to provide consumers with better products, and at the same time continue to increase investment in the running market, join hands with our sponsored marathons and contracted athletes, and continue to advocate running culture through running communities, so that more people can fall in love with running." ”

Looking forward to 2024, Siu Ka Lok is full of confidence, "2024 is a big year for sports, with European Championships, Copa America, Olympic Games and so on around the world. We are full of confidence in the sports consumer market next year, and we also look forward to the continuous increase in the popularity of the adidas brand under the sports boom, and we can feel the charm and enthusiasm of sports together. ”