Adidas wants to win back the “hearts and minds” of Chinese consumers with patriotic clothing lines to reclaim market share in its once fastest-growing market.
Adrian Siu, country manager of the German sportswear brand for the Asian nation, said: “2022 has been a tough year, and this year probably won’t be much easier. . . But Adidas has been in mainland China for over 20 years and we’ve had many ups and downs. »
Boost the group’s fortunes by China is a top priority for new chief executive Björn Gulden, who joined the brand from Puma in January to overthrow Nike’s biggest rival, who is also reeling from his split with disgraced rapper Kanye West and the loss of its activities in Russia.
A quick recovery in China “would help tremendously because margins are higher,” Gulden said in March after warning in 2024 that Adidas could suffer its first annual loss in 31 years.
Adidas has seen a steep fall from grace in China since 2019 as prolonged shutdowns have hit sales, exacerbated by a backlash against Western brands over their refusal to buy cotton from Xinjiang, which rights campaigners say human, involves forced labor.
The rise of local sportswear manufacturers such as Anta and Li-Ning has increased competition for Western brands. Last year, Adidas’ sales in the region fell 36% to 3.2 billion euros and were only half of what the group had expected in 2019.
Part of the turnaround strategy is to customize more clothing for the local customer. “The Chinese consumer is increasingly trusting traditional Chinese culture. . . We marry traditional Chinese elements with international product design to win the hearts and minds of . . . young consumers,” Siu said.
The Adidas executive wore a red Adidas track top with “China” splashed across it in Chinese characters, part of a new line he said flew off the shelves.
A year ago Adidas shaken his management team in China, poaching Siu from Cosmo Lady. A Hong Kong-trained manager, he oversaw Adidas’ operations in the city before joining the Chinese lingerie maker as chief executive in 2019.
Siu pursues a three-pronged approach that focuses on locally designed products, more local production and shorter delivery times. An 80-strong design team in Shanghai creates footwear and apparel for Chinese consumers. The aim is to design at least 30% of all Adidas kits sold in China locally by next year, compared to a figure of less than 10% before the crisis in China.
Adidas also wants to move more production to the country to shorten delivery times so it can respond more quickly to fickle fashion trends. Industry experts note that this strategy could drive up overall costs, as labor is more expensive in China than in Vietnam, Indonesia and Cambodia, where it makes the bulk of its clothing and footwear.
Adidas will focus more on sports gear than its fashion lines as “the middle-class consumer is becoming more health and fitness conscious,” Siu said. The group is expanding its portfolio of athletes, including Wu Yibing, the country’s number one tennis player, after being shunned by many influencers during the nationalist boycott.
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