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Adidas: A Whole Piece Of Elephant.

2012/4/10 23:32:00 15


Change situation

Adidas is headquartered in Herzogenaurach, Germany.

In 2011, on the four side of the year, Adidas upgraded its annual sales expectations and refurbished the headquarters building. The building was new and modern.

The office area of the building is simple, spacious, and exhibits Adidas products.

The top of the exterior glass passageway is lined with a white arc that symbolizes the shoelace of athletic shoes.



This indicates a new beginning.

Before the 2008 Beijing Olympic Games, Adidas increased the dealer's inventory due to the optimistic forecast of the post Olympic market.

The dramatic scene appeared on the night of the opening ceremony of the Olympic Games. When Lining walked with the torch in the sky, everyone fell off his chin.

The economic crisis that swept through the world, such as the beasts of prey, put the sports brand market in the gloom.

In order to clean up inventory in time, activate cash flow, dealers will not hesitate to discount products, which not only hurts the high-end brand image of Adidas, but also leads to many stores losing money, resulting in "loss".

Double lose

"The relationship between Adidas and dealers was tight.

Because the inventory can not be cleared, dealers do not want to purchase, resulting in a lack of sales terminals, the backlog of products, forming a vicious circle.

Therefore, Adidas changes channel strategy to help dealers clean up inventory and tide over difficulties in order to light up in 2011.

Today, Greater China has become the global star market of Adidas.

In the first three quarters of 2011, the sales volume of Adidas in Greater China was 900 million euros, up 25% compared with the same period last year, which increased by 25% compared with the same period last year. Its growth rate was 28%, an increase of 28% over the same period last year, ranking the highest in the adidas six largest market in the world.

In contrast to Adidas's success in the Chinese market, the performance of China's local sports brands declined. In October 2011, the major sports brands announced the first three quarters' performance, while the growth of domestic sports brands such as Lining and Anta slowed down.

Data show that Lining inventory in the first half of the total amount of 992 million yuan, the end of 2010, the stock amount of 806 million yuan, the amount of inventory increased by nearly 200 million yuan.

Influenced by inventory and other factors, Lining's income in the first half of the year was 4 billion 289 million yuan, a decrease of 4.8% compared with 4 billion 505 million yuan in the same period last year. Net profit was 294 million yuan, down nearly 50% compared with the same period last year's 582 million yuan, and its share price has fallen by nearly 50% since the beginning of the year.

JP Morgan's analysis pointed out that Lining's revenue will drop by 13% in 2011, and its profit will shrink by 60%.



After China's trend is in trouble, XTEP has not been spared.

In the first half of 2011, the results showed that the stock of XTEP reached 887 million yuan, an increase of about 92% over the previous year, of which 474 million of the finished goods amounted to 474 million yuan, 5.64 times the 84 million yuan in the first half of 2010, and the total working capital turnover day was extended from 27 days in 2010 to 66 days in the first half of 2011.

The stock of Anta increased by 20.3% compared with the same period last year, while PEAK increased by 41%.

According to the data released by PEAK, the order volume in the second quarter of 2012 increased by 9.5% compared with the same quarter in 2011. This is the lowest increase in PEAK's orders since 2009, after which PEAK's orders increased by more than 20%.

The success of Adidas is not only in the Greater China region, but according to German media, adidas has not been seriously affected by the euro debt crisis.

"We didn't feel any influence. Everything was going well."

Adidas CEO Herbert Hainer said.

In Greater China, Adidas, who once again passed away after being defeated by local brand Lining, has come to realize the importance of several issues: brand aging, diversification of channels, and amazing development potential of emerging markets.

Taking a look at its major initiatives, the main purpose is to make a giant turn of the sports brand giant, turn the whole thing into zero, decompose the huge brand and complex regional structure and channel structure according to the specific situation into small groups, pform from elephants to fleet, and give full play to the autonomy of each small group. At the same time, Adidas also released a new brand slogan in 2011 to control all the brands, forming a main line, effectively linking small battle groups together, with scale and flexibility.

In September 2011, market analysts generally favored Adidas and even raised it to the same level as Nike, which is the first time in recent years.

"There is ample evidence that Adidas's stock value is undervalued."

M.M. Warburg Hamburg analyst Joerg Frey said.

He rated Adidas as "buying".

Brand development

Brand fashion and younger

As an old German enterprise, Adidas used to be a typical "German enterprise" - rigorous, professional and stubborn. Its insisting attitude is: "why do we say to them? Why do we say to children? We want to talk about athletes!" today, it is changing its attitude, and the choice of brand spokesperson shows its great change.

As an old brand of high-end international sports brand, adidas has launched a new brand of brand concept marketing. After 7 years of slogan "impossible is nothing", it has been replaced by "Adidas is all in", meaning "Adidas full tilt", and invited singer Eason Chan and American female singer Katy Katy, model, football star Beckham and Messi, and star ball star to take a new advertising campaign.

"Adidas fully committed marketing campaign has received very good results and will continue this year. The concept of wholehearted and marketing activities has been approved by the German headquarters. It will be our marketing activity for the next 4 years.

In the future, there will be continuous marketing activities and publicity as the theme. Last year, the introduction of this event will further develop this year.

Gao Jiali, managing director of Adidas Greater China, said (Colin Currie).

From Eason Chan, Li Bingbing, Eddie Peng and other spokesmen line-up, Adidas is changing its attitude, will more dialogue with ordinary people and young people with relatively low age.

In Zhou Bichang's new tune "hunch" MV, she put on Adidas superstar shoes to shoot.

Adidas is reversing the single image of sports brand, adding elements of fashion in brand spirit, and expanding potential target users to young and middle-aged people pursuing fashion.

At the same time, Adidas hopes to use the new slogan to unify the demands of its various brands and strengthen its consistency with its parent brand.

Sub brand portfolio occupy market segments

On the day of December 2011, to celebrate the opening of the adidas fashion center, which focused on Y-3, SLVR and Porsche Design Sport (PDS), Adidas held a grand opening reception.

The DJ Orchestra and the famous singer Shang Wenjie are passionate about the show. Zhang Zhiyuan and the famous host, stylist, film actor and designer attended the show.

At present, adidas has three major brands, namely the adidas performance series (formerly the "endless movement" series), the traditional sports series (the classic series) and the sports fashion series, which set up a logo for each series, positioning different groups of people, and fundamentally changed the traditional sports products company's methods of clothing and footwear division.

From the horizontal perspective, Adidas is extending its tentacles from its best football and sports products to basketball, outdoor, jogging, training, fashion and other fields, especially in the field of basketball, to attack Nike, the most important competitor, and to identify different brand spokesmen according to the characteristics of consumers in different fields, and then classify the sub brands of high school and low price according to the consumption ability of consumers.

While expanding coverage, Adidas will be able to see more clearly profitable products.

For example, the design style of the SLVR brand is similar to that of Yamamoto Teruji's designer brand Y-3, but the price is lower. Stella McCartney is the high-end designer brand of sports and fashion. The clover and the three bar brand still maintain the classic status. Style and its personalized customization service aim at the young people with relatively high personalization requirements, while NEO is the low end brand of Adidas entering the three or four line market. At present, there are nearly 900 sales outlets in the three or four line market.

The three big brand series, eight big brands, take their related fields, the alignment crowd as the abscissa, and take the price as the ordinate, under the command of the new brand slogan "Adidas is all in", constitute a brand matrix.

According to our survey, the brand characteristics of Adidas can touch the hearts of consumers. We can pass the characteristics of the brand to consumers, making Adidas a brand that consumers love and love more.

Because consumers now believe that Adidas is the only sports brand that can provide a full range of products.

From the very professional sports performance series to the very high-end fashion, lifestyle series, to leisure series, we should say that everything is available, and this concept has been deeply rooted in the hearts of the people.

The survey data of 10 thousand consumers show that the number and quantity of Adidas brands they buy are much higher than that of 2010. It can be said that Adidas brands have won the trust and love of consumers.

Gao Jiali said.

Channel reconstruction

At the end of 2010, Adidas announced an ambitious "2015 way" plan to extend the channel from 550 cities to 1400 cities. The population of 50 thousand to 500 thousand cities were included in the target, and the number of new stores was 2500.

The plan was implemented in 2011. In this year alone, Adidas opened about 1000 new stores, half of which were located in three or four line cities, which coincided with the channel sinking strategy proposed by Gao Jiali in early 2011.

In December 16, 2011, Adidas announced again that it opened 500 new stores in China in 2012 and raised the target of 2010, which has increased the product distribution destination to 2500 cities as of 2015.

By the end of 2011, Adidas had 6700 stores in China, an increase of 1175 over the same period last year.

Adidas is developing rapidly. Compared with the newly increased number of stores, the "2015 leading" plan once again shows the conservative and down-to-earth attitude of the German enterprise.

Regional reorganization

At the end of 2011, Adidas landed in Harbin, the first outdoor sporting goods store in China. This is the latest attempt at the first and second tier cities which are relatively saturated with sporting goods retail stores.

In the future, Adidas will also offer professional basketball shops and running shops.

The opening of Harbin outdoor store is controlled by the team of Adidas China North District, not Shanghai headquarters of Adidas China.

"They are responsible for ensuring the smooth progress of the activities," Gao Jiali said. "We now have nearly 7000 stores in China, and all regions must ensure that the management of each store is right and proper."

In order to adapt to the size and diversity of the Chinese market, Adidas began to adjust its regional structure in the middle of 2009, and divided the East, South and North regions into East, South, North and middle (West) districts.

In April 2011, Adidas set up the West headquarters office in Chengdu.

In the past, the main tasks of the major regions were to communicate with local distributors, and now they have more autonomy in marketing.

At the order meeting held in October 2011, dealers found that the list of products they received was different. Adidas gave different products for dealers' selection according to the climatic characteristics and consumption characteristics of each region.

In the past, dealers everywhere got the same product catalog.

This sporting goods giant is getting rid of the whole thing in time and adapting to the region which has crossed most latitudes of the northern hemisphere, and has made different marketing plans for consumers in various climates.

Correspondingly, more detailed zoning helps to expand the scale of Adidas. The channel sinking plan helps Adidas penetrate into the more extensive and scattered four line to seven line cities in China. The names of some towns are even unfamiliar to Chinese people, such as Shandong Juxian, Heilongjiang Lanxi County, Fujian Pingtan county and so on. Direct control of these terminals from headquarters is undoubtedly difficult and inefficient.

Therefore, it is necessary to give more autonomy to the region and shorten the decision-making chain.

Many multinationals often spend months in project decision making and capital approval because of too many links, and their flexibility and market reaction lag far behind Chinese enterprises.

Adidas's move will change the problem of "huge and difficult to turn around".

At present, Adidas will enter nearly 1000 new cities, and 2500 destinations can be chosen.

To this end, Adidas sent a research team to investigate the income level of local residents, asking them how much money they spend on sporting goods, what sports they like and so on.

Not only that, the research team also inspects the local business environment, counts how many cinemas, supermarkets, banks, hotels and so on, so as to determine the city that Adidas should enter.

After the establishment of the West headquarters office in Chengdu, Adidas completed the restructuring of the five major regions of Greater China.

"We hope that the future sales and marketing team will be closer to our channel customers and terminal consumers.

They can conveniently travel around the region and do a series of work.

On the one hand, they are responsible for channel customer service. On the other hand, they also conduct supervision and inspection for channel and retail store operation. "

Gao Jiali said.

But the problem still exists. First, the low tier cities are the "strongholds" of local brands, where they have been entrenched for years, and have a better understanding of local consumer psychology and shopping habits, and the price of products is more suitable for local consumption level.

Another problem is logistics and distribution. It usually takes a long time to pport goods from storage centers to county-level cities.

Generally, the pportation time of Adidas usually ranges from 2 to 3 days.

If these two problems can be solved, Adidas will excavate another treasure in remote Chinese towns. Because of the increasing coverage of the media, consumers in these areas are familiar with international brands, but lack of channels to buy them.

Li Shubin, CEO, said in an interview with the new marketing reporter: "ADI and Nike are not new faces in these areas. The low tier cities have long been salivating at high-end brands, but are suffering from no channels to buy them.

They usually have to run very far to buy these brands in the nearest cities. "

Channel pluralism

After the 2008 Olympic Games, the friction with distributors made Adidas realize the importance of diversifying channels. While eliminating dealers with low standards and low loyalty, it also stabilized and strengthened ties with loyal distributors, and gradually increased the proportion of proprietary stores, and tried the Internet channel.

In order to stabilize the dealer's mood, Adidas Greater China carefully said "the proportion of proprietary stores expanded" and so on. In the interview, Gao Jia Li emphasized the complementary relationship between self run stores and distributors' stores several times.

"I will correct the problem of the increasing proportion of self owned stores.

In the past year's business, the growth of wholesalers in our business has exceeded the growth of our own stores. The wholesale business that our distributors do for us is the focus of our attention. It is also a very important part of our "2015 plan".

We are very satisfied with their performance and we will continue to work hard. "

"Let me explain again that our franchised stores (distribution stores) have outgrown the growth of our own stores. The so-called self run stores are all the procurement, operation and management of our Adidas employees. We opened 1000 new stores last year, most of which are franchised stores, not our own stores.

In addition, there are Harbin outdoor stores, as well as small brand centers in Wuhan and Chengdu, all of which are franchised store operators.

What's the purpose of opening our own stores? It's a demonstration effect. We hope that the stores in the second tier cities or some first tier cities will have a look at how Adidas manages our brand.

Gao Jiali said: "we attach great importance to setting up shop in small and medium-sized cities. In 2011, we opened more than 1000 stores, 50% of which were opened in small and medium-sized cities, none of which was self-owned shops, and dealers and our franchisees helped us.

The "2015 way" strategy emphasizes the closer cooperation with distributors and franchisees. We want to ensure that through mutual cooperation, they can make them profitable and enable them to succeed in business.

In fact, we have done a lot of standardization work, such as Sanlitun, Beijing, and the brand center of Shanghai. Some self operated stores are good examples and models. We will conduct a very comprehensive training for all franchisees and distributors friends of the operation brand centers, so that the brand center of the distributors can provide the same consumption experience as the self operated stores.

He revealed that Adidas will continue to open new mini brand centers in second tier cities in the future.

In addition, e-commerce will occupy a larger proportion in the growth strategy of Adidas, on the one hand, in order to crack down on online selling, and on the other hand, try to diversify channels.

In August 2010, Adidas and Taobao (micro-blog) opened an online flagship store.

At the end of 2011, Adidas licensed shoe store sold its products.

"If we sell through two channels, we will encounter some challenges, but anyway, I think we should let consumers choose in a competitive environment.

Because the online mall has its own customers, Adidas also has its own customers.

The network sales environment is a very interesting environment, not only for sports goods sales, but also for any industry, because every consumer who goes to Taobao will feel that he may buy something cheaper.

Our job is to authenticate. We have to make sure that any seller who sells our products on Taobao will be tested to ensure that there is no fakes.

We also do some work through customer segmentation, so that there are some differences between the products sold on the Internet and the products sold by the physical stores.

Gao Jiali said.

Channel strategy

In the economic crisis after the 2008 Olympic Games, some dealers in order to reduce inventory, greatly reduced the adidas brand image damage, and BELLE and Daphne and other large dealers no longer represent the sale of sporting goods or reduce the order quantity.

This is a big blow to Adidas, a "light asset" company that has always been relying on distributors to sell its products.

In order to adjust and stabilize the dealer team, Adidas first allows some dealers who lose enthusiasm in cooperation to withdraw from the adidas system to help them handle complicated exit procedures.

Second, help those distributors who are willing to cooperate with Adidas to tide over difficulties.

To this end, Adidas changed the main brand's no price cut, no discount strategy, allowing some regional distributors to open discount stores to digest inventory.

Even in some cities, dealers are allowed to drive discount stores to a few hundred meters away from the adidas flagship store.

In the second half of 2010, in order to reduce inventory to a healthier and more stable level, Adidas adopted "inventory in the old" mode, allowing channel partners to replace old stocks with new ones.

After two years of adjustment, there is no change in principle between Adidas and the dealer's cooperation mode.

The only difference now is our closer cooperation with distributors.

We use some indicators to measure them, such as the way they buy goods, the rate of sale they sell to terminal consumers, how they invest in shops, how they operate more professionally and effectively, and so on.

This is where we are different from other brands, "explains Gao Jia Li.

This involves the concept of "Sell-through" introduced by Adidas. The goods sold to the distributors inside the company are known as "Sell-in", and the goods sold to the customers in the retail stores opened by distributors are defined as "Sell-through".

In early 2009, the adidas team specializing in "Sell-through" was set up. The ultimate goal is to keep the "Sell-in" and "Sell-through" consistent, that is, all the distributors can sell smoothly.

Adidas examines the dealer's "Sell-through" situation through the data entry of the retail terminal, examines which products are high profit products, which products are popular, which products are left behind, analyzes the reasons, and takes corresponding marketing measures with the distributors. Only when these measures are invalid, will the discount sale be promoted.

Adidas has formulated a strict EPR (Early Price Reduction) system: the product can only be sold for 20 percent off days after waiting for 30 days; after 90 days, the discount can be changed to 30 percent off.

If it can't be sold, Adidas will buy them back and sell them at their factory discount stores.

"We are very concerned about the proportion of consumers buying in the market, which is called Sell-through and sold to dealers as Sell-in.

Our job is not to sell to the dealer task, we have to ensure that after the dealer gets the goods, we will carry out a series of marketing activities in the market, create Adidas brand, enhance our channel strength, let consumers contact our products, buy our products.

Because we have to ensure that every month, our internal inventories and inventory of dealers are very healthy.

Gao Jiali said that many friends have asked Adidas's inventory problems in 2009.

"But now these problems have been well solved, that is, through a series of efforts, we need to create brand characteristics, to provide other brands can not provide things, so that people do not have me.

The other is to launch a series of brand building activities, such as the Shanghai brand experience center, Rubik's cube, which has added a bright color to our brand. Through the construction of brand experience center, I think it is not just Adidas self shop, but also the dealers' friends can also benefit from it.

In 2011, many dealer friends told me that Adidas's same store sales exceeded other brands. "

"What if we have a problem with the sales rate? We will keep in touch with each other. First we can see what the problem is, what is not sold, we need to analyze, the dealer orders are recorded, we see what are not good enough to sell, next time when ordering, let them order less, improve their next purchase plan and plan.

It is known that China is a very large country, so there is no one knife way, the climate conditions of China, the taste and character of consumers are different, so the consumers in different regions have different needs, and the distributors should also formulate the purchasing plan.

In addition, if the dealer friends do have a lot of difficulties, we have some promotion ways to help them solve the problem as soon as possible. "

Gao Jiali said.

Five growth modules of Adidas

The "2015 way" plan was established in 2010 and implemented in early 2011.

Up to now, there are a total of five growth modules in one year.

The first is to attack in the category of high-end cities. We are the main product category of sports performance series.

For example, we are leaders of football products in the world. We will maintain leadership in high-end cities. Besides, we will also challenge or attack basketball players, such as basketball players. Our main competitors will gain the advantage in high-end cities.

The second growth module is brand expansion in small and medium-sized cities.

We are very confident that with the acceleration of China's modernization drive and the process of urbanization, people's incomes will increase in small and medium-sized cities.

We believe that they have more and more demand for high-end brands. We have opened up our stores in small and medium-sized cities.

The third growth module is the further segmentation of retail stores in cities where we already have many stores.

For example, we launched the first outdoor retail store in China and some second tier cities in Harbin. We will build some mini brand centers.

Just like the brand center in Shanghai, they are only small in scale.

Like Wuhan and Chengdu, such a mini brand center has been opened. There are so many brands that do not have Shanghai brand experience center, but there are NEO, clover and sports performance series. They are the flagship brand stores in their second tier cities.

Last week, we have opened the first basketball professional retail store in China. In this way, we hope to further subdivide customers in many cities with more shops to meet customers' needs.

By gathering and classifying many categories and brands, we create a more attractive environment for customers and consumers through different forms.

The fourth growth module is our clover brand, which can now be bought in 1500 stores.

In the past, we know that the clover brand is called white box, which we sell in self owned retail stores. Now we put it in some distributors' stores, and dealers can also sell clover brand products.

In addition, we will open 50 stores for clover this year.

There are also NEO brands, which used to be a brand for small and medium-sized cities.

Next we will promote NEO brand and products in a big way.

The fifth growth module is internal restructuring.

We have created a regionalized management model and set up offices in Southeast and Northwest China respectively, especially in the western and central parts of China.

We think this is a very successful link in our strategy, making our sales staff more close to customers and consumers.

In the north and south of the Yangtze River, the eastern part of Shanghai and the western part of Chengdu, there are more Adidas staff to understand the needs of customers and the needs of distributors.

Like the brand experience center in Shanghai, adidas has only five in the world, and only two in China. This also highlights the importance of Adidas to the Shanghai market and the Chinese market.

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