For Adidas, the process of increasing localization in China is quietly accelerating.
Recently, the Adidas 2024 autumn and winter new product ordering fair was held in Zhuhai, Guangdong, during the event, Adidas Greater China Managing Director Xiao Jiale mentioned in an interview with the media that the company hopes to achieve "in China, for China" in design, research and development, and production, and said that it hopes that the proportion of products "created in China" can be increased to 70%, "according to the current situation, this number will reach 75% in 2024".
Greater China is one of Adidas' most important strategic markets, but in fiscal 2021 and 2022, Adidas' performance in Greater China was not as expected. In April 2022, Xiao Jiale, who has nearly 20 years of work experience at Adidas, officially became the managing director of Adidas Greater China, which is also the first Chinese to serve as CEO of Adidas Greater China.
Xiao Jiale revealed in the interview that next year in Greater China will continue to increase the localization of the "Created in China" product line, increase investment in sports, do more grassroots sports, 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.
In the second quarter of this year, the performance of Greater China returned to growth
Consumption grading products have to tell their own story
Talking about the operating performance in 2023, Xiao Jiale, Managing Director of Adidas Greater China, said, "In 2023, we have achieved a '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. ”
Judging from the financial report data, in the first three quarters of 2023, Adidas' performance in Greater China has indeed picked up. In the first three quarters of fiscal 2023, Adidas achieved revenue of 16.616 billion euros, down 4% year-on-year, or 3% year-on-year excluding the impact of Yeezy, and in Greater China, revenue for the first three quarters was 2.52 billion euros, up 2.5% year-on-year.
This year is the first year of the opening of the epidemic, the term consumption downgrade is frequently mentioned, Xiao Jiale said that this year's retail environment is very competitive, especially online, consumers are particularly sensitive to product prices and promotional activities, however, he believes that it is more accurate to use consumption grading to describe this year's consumption level, "Now consumers are becoming more and more rational, they must see that products are quality, valuable, different from others, and have their own stories."
Xiao Jiale said that even some consumption is upgraded, he gave an example, this year Adidas launched a new running shoes in technology and technology improvement, in similar products, consumers are not so sensitive to price, their demand for products is very huge, "including when Messi visited China, our Argentine team's jerseys were sold out two days before the game, which shows that as long as there are good products and good stories, there may be a scene of 'consumption upgrade'."
"For example, the Fear of God co-branded model we recently sold is priced relatively high, and consumers will line up to buy it, so for clothing and fashion products, consumers pay more attention to whether they are trendy, cool, and good-looking. For Adi, there are many price levels of our products, and there are many choices for consumers. Wu Liang, senior director of corporate public relations of Adidas Greater China, told a reporter from Nandu Bay Finance Agency.
The consumption power of emerging cities is gradually increasing
Increase the speed of opening stores in emerging cities
On November 30 this year, the Adidas South China flagship store in Futian CBD, Shenzhen, closed its store, which attracted attention. It is understood that the store opened on December 18, 2021, with a total area of more than 3,200 square meters and spanning three floors, claiming to be the world's first highest-level flagship store in South China built by Adidas at a cost of 50 million yuan.
In an interview, Siu Ka Lok also responded to this question. He said it was just a normal store adjustment. Xiao Jiale mentioned that Adidas currently has more than 7,000 stores in the Chinese market, which is very large in the sports brand industry.
He said that the current retail ecosystem is very complex, there are online and offline forms, and the situation of opening and closing stores is very normal, "Many business districts have changed through the transfer of time, for example, the customer flow of this business district was very good a few years ago, and it 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 to.
Xiao Jiale mentioned that in fact, Adidas has opened many big stores in China this year, and has opened many big stores or brand centers in Chongqing, Guizhou, Shanghai, Shaanxi, and Hainan. He said that in 2024, in addition to large stores in T0, T1 and T2 cities, Adidas will also increase the speed of opening stores in third-tier cities and the construction of brand image.
Wu Liang told the reporter of Nandu Bay Finance Agency that Adidas has 7~8 different store types, including brand centers, flagship stores, running shops, etc., "different store types, the products in them are different." Wu Liang said that although Adidas will next develop emerging cities such as the third and fourth tiers. "We believe that after so many years of development, the purchasing power of consumers is gradually increasing, and it is necessary for us to let local consumers better understand our brand by opening stores in these cities."
We will continue to increase the localization of the "Created in China" product line
The sportswear industry has ushered in diversified development, and there is competition to make progress
In addition to laying out offline stores in more cities in China, Xiao Jiale also said that it will also continue to increase the localization of "Created in China" product lines. He believes that China has a lot of rich stories that can be injected into products, and Adidas has a series of "Everything Seeking Ancestors", which is inspired by Chinese intangible cultural heritage, and Siu Ka Lok hopes to let consumers have a deeper understanding of Chinese intangible cultural heritage and Chinese history, and also hopes to bring these products overseas to let more people understand Chinese culture. Secondly, Siu Jiale said that adidas cooperates with many local Chinese designers, and will also collaborate with young design students on some projects.
"If we can increase the proportion of 'created in China' production to more than 70%, we can form a very flexible supply chain, and we can respond more quickly to changes in the market and changes in Chinese consumer needs, including aesthetic vision." Xiao Jiale mentioned that this year, a big breakthrough for Adidas in China is to upgrade the flexible supply chain, the supply chain not only has Chinese design, but also improves the production rate in China, shortens the cycle from design to production to product landing to the market, and responds more flexibly to consumer feedback, "Good things can be replenished quickly to meet the needs of consumers."
In addition, Siu Jiale said that he will continue to increase his attention to sports, "next year is a big year for sports, there are two football events of the European Cup and the Copa America, and there will be the Paris Games next summer." Xiao Jiale mentioned that adidas sponsored many marathons this year, including the Beijing Marathon, Guangzhou Marathon, Taipei Marathon in Taiwan, China, etc., and he also said that more grassroots sports will be done next year, "Football is Adidas' key sport, and in the coming year, we will have more in-depth cooperation with the General Administration of Sports of China and the China Football Development Association, and there will be more grassroots youth training and competitions, hoping that they will have the opportunity to improve."
In recent years, domestic brands such as Anta and Li Ning have risen, and the clothing, footwear and hat market has ushered in a more diversified development. Xiao Jiale said that the consumer market is constantly changing, "I very much welcome healthy competition, because competition can make progress, competition can encourage us to do better, and in the end it is consumers who benefit." If it's healthy competition, I think it's a good thing for all peers and consumers."
Written by: Feng Jiaju, reporter of Nandu Bay Finance Agency