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In-depth review of Adidas: both technology and fashion, supply chain and digital channels win
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- Time of issue:2020-11-30 18:17
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(Summary description)Since its initial start in the 1820s, Adidas has always been one of the most influential sports brands in the world. It has long occupied the leading position in the sports shoes and apparel industry
In-depth review of Adidas: both technology and fashion, supply chain and digital channels win
(Summary description)Since its initial start in the 1820s, Adidas has always been one of the most influential sports brands in the world. It has long occupied the leading position in the sports shoes and apparel industry
- Categories:Industry News
- Author:
- Origin:
- Time of issue:2020-11-30 18:17
- Views:
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A sports brand giant with a history of nearly 100 years, the road to innovation is full of challenges
Since its initial start in the 1820s, Adidas has always been one of the most influential sports brands in the world. It has long occupied the leading position in the sports shoes and apparel industry and has core advantages in industrial chain, product development and brand marketing; 2015-2019 In 2009, Adidas' net profit grew steadily, with a compound growth rate of 10.22% in operating income over the past five years. .
The historical development of Adidas can be roughly divided into 4 stages: 1. At the beginning of its establishment, it focused on craftsmanship and became famous in the world through the Olympic Games (1924-1960); 2. The product line continued to expand, sponsored the World Cup, and became a true comprehensive sports expert (1960-1978) 3. Missed the trend of jogging, was merged by Nike's superiors, and was deeply in a brand crisis (1978-1993); 4. Multi-dimensional strategic adjustments, rejuvenated and successfully went public, and launched a long-term tug of war with Nike (1993-present).
Through an in-depth review of the growth history of Adidas, analysis from the aspects of brand technology research and development, fashion transformation, industrial chain channel construction, digital layout, etc., provides reference value for the development of local sports brands.
Take technology as the core, lead the fashion trend, create a unique positioning, and play a star effect
R&D to win, build strong technical barriers
Adidas' continuous product innovation has attracted a large number of athletes and sports enthusiasts, and has industry-leading core technology.
Enter the fashion field, grasp the consumption trend, and create a unique positioning
Adidas accurately grasped consumer trends, demonstrated the brand's features of both functionality and fashion, and created Adidas' unique brand positioning. The company not only has professional sports equipment products such as running, training, football, basketball, outdoor, etc., but also has three distinct product series: sports performance series adidasperformance (three stripes), sports traditional series adidasoriginals (clover) and sports fashion series adidasstyle (round LOGO)
Give full play to the celebrity effect and continue to make beautiful advertisements for subsequent new product launches
The top-down marketing strategy is one of the driving forces of Adidas' success. It first binds top-level star athletes and international events, and then radiates to sports enthusiasts, eventually reaching a wide range of mass markets, and continuing to expand brand influence .
Deeply plowing the Chinese market, opening a new phase of "innovation"
In 2019, Homecourt, the new headquarters of Adidas Asia Pacific and Greater China, opened in Shanghai, opening a new chapter in the "Innovation" strategy. Adidas radiates the Asia-Pacific region with Shanghai as its center, promotes the expansion of retail business and new city business, and accelerates the development of the Greater China and Asia-Pacific markets.
Outsourcing logistics to ensure the continuous operation of the brand
Unlike Nike using its own logistics system, Adidas chose to outsource other logistics operations after cost accounting. In the case of an incomplete logistics system, it effectively reduced operating costs.
Strengthen channel construction through digital means and enhance consumer experience
Facing the increasingly fiercely competitive market, Adidas uses digital means to strengthen channel construction, digitizes production and processes, and further strengthens channel construction. At the same time, it uses digital means to build digital stores, which not only improves consumer experience, but also increases store utilization efficiency and reduces Labor costs.
Replaying Adi’s successful experience, local sporting goods have huge potential
With functionality as the core, focus on technology research and development, and adhere to the fashion strategy
Throughout the development history of Adidas, the birth of the sports goods giant is inseparable from the persistent pursuit of functionality and technology research and development. On this basis, entering the fashion field is conducive to rapid market expansion.
Grasp the trend of the times, give full play to the local advantages, and maintain the balance of the supply chain
Local sports brands should give full play to their location advantages, consolidate the supply chain with the help of manufacturing and logistics advantages in Greater China, and gradually extend to surrounding markets to create new international brands.
Prioritize the maintenance of its own brand development, and carefully select the acquisition targets
For Anta (02020), how to make many sub-brands make up for their own market vacancies and form a benign brand interaction on the premise of maintaining their characteristics, but also needs to proceed cautiously.
Risk warning: health incidents have led to a slowdown in related economic activities; the global sports industry is negatively affected by the virus pandemic; market competition is fierce; the failed distribution strategy adjustments of physical and digital retail may lead to insufficient sales and profits; the fashion sector cannot quickly cater to consumption者 demand.
1. A sports brand giant with a history of nearly 100 years, the road to innovation is full of challenges
1.1 Started from a family shoe factory and developed into one of the most influential sports brands in the world
Since its initial start in the 1820s, Adidas has always been one of the most influential sports brands in the world. It has long occupied the leading position in the sports shoes and apparel industry and has core advantages in industrial chain, product development and brand marketing; 2015-2019 In 2009, Adidas' net profit grew steadily, with a compound growth rate of 10.22% in operating income over the past five years. .
Adidas originated in Germany and has now become a true multinational company with more than 59,000 employees worldwide. Headquartered in Herzogenaurach, Bavaria, Germany. The company's main three private brands, acquired TaylorMade in 1997, and Reebok in 2006, has long implemented a multi-brand strategic layout.
The historical development of Adidas can be roughly divided into 4 stages: 1. At the beginning of its establishment, it focused on craftsmanship and became famous in the world through the Olympic Games (1924-1960); 2. The product line continued to expand, sponsored the World Cup, and became a true comprehensive sports expert (1960-1978) 3. Missed the trend of jogging, was merged by Nike's superiors, and was deeply in a brand crisis (1978-1993); 4. Multi-dimensional strategic adjustments, rejuvenated and successfully went public, and launched a long-term tug of war with Nike (1993-present).
In the early days of its establishment, it focused on craftsmanship and became famous in the world with the help of the Olympic Games (1920-1960)
Adidas brand founder Adolf Adidas Dassler is not only a shoemaker, but also an amateur track and field athlete obsessed with sports. He and his elder brother Rudolf Dassler founded the "Dassler Brothers Shoe Factory" in 1924 and began producing footwear products in Herzogenaurach, a traditional leather goods and shoemaking center in Bavaria, Germany. At the 1928 Amsterdam Olympics, Adidas Dassler produced products for Olympians for the first time. During the 1936 Berlin Olympics, the Dassler brothers provided studs to the black American athlete Jesse Owens. As a result, Owens won four Olympic Games in a row. The Dassler Brothers shoe factory was also well-known to the public. Adidas and the Olympic Games are inextricably linked. Emil Zatopek, Wilma Rudolf, Nadia Comaneci, Pilas Dimas and other sports figures have all worked in Adidas. With the help of the products, milestones have been left in the history of the Olympics.
But as the relationship between Adolf and his brother Rudolf Dassler deteriorated, the Dassler Brothers shoe factory was split into two independent companies in 1948: Adidas and Puma. In 1949, Adidas was officially registered and established. The ***"three-stripes" pattern designed by founder Adolf Dassler was also applied to sports shoes for the first time. The three-striped logo represented Adidas's realization of challenges, achievements in the future and The brand's desire to continuously achieve goals.
The product line continues to expand, sponsors the World Cup, and becomes a true comprehensive sports expert (1960-1978)
The 1960s was the decade when Adidas broke through the barriers. From Verma Rudolf wearing Adidas sprint spikes to pick three *** to the appearance of the back style high jump, the height standard of the high jump event was changed, and Adidas was all present. Adidas also launched sportswear products in the 1960s, and athletes broke one sports record after another with the help of Adidas equipment.
At the beginning of the 1970 World Cup, Adidas became the official sponsor of the FIFA official ball and provided ball for each subsequent World Cup. In 1979, Adidas launched the world's best-selling football shoe "CopaMundial". Adidas also signed a contract with American tennis player StanSmith in the 1970s, and launched an explosive co-branded "little white shoe" StanSmith, which is still very popular today.
Adidas has grown into a multi-field sports expert at this stage. The Argentine national team with the best football players in the football field chooses to use Adidas products, outdoor idol Holder Messner also chooses to wear Adidas hiking shoes, and Adidas products also gain The favorite of gymnasts. The company provides professional equipment and products for multiple sports fields and becomes a true comprehensive sports expert.
Management changes, missed jogging trend, deep in brand crisis (1978-1993)
With the death of its founder, Adidas Dassler, in 1978, Adidas fell into turmoil and failed to recover within a few years.
In terms of competition, Nike took advantage of the rapid rise of the American jogging fever in the 1970s, posing a direct challenge to Adidas in the American market, and Reebok is also constantly grabbing market share.
In terms of strategic adjustments, the industrial restructuring that occurred in the 1970s prompted many manufacturers in the industry to shift their production to Asia to reduce costs. Adidas management failed to adjust the strategic direction in time. Due to a lack of understanding of Asian manufacturing, we can only continue to lock factories in expensive countries such as Germany, France, and Spain.
In terms of marketing, the pyramid marketing strategy has gradually lost its advantages, and the conservative style has weakened market competitiveness. From 1988 to 1992, Adidas’ annual sales fell from 2 billion to 1.7 billion U.S. dollars. In 1992, Adidas’ market share in the US market fell to 3%, and in the European market it fell to 34%. The group’s overall loss was serious. The company is on the verge of bankruptcy.
Multi-dimensional strategic adjustments, recovery of vitality and successful listing, a long-term tug of war with Nike (1993 to present)
In 1993, Robert Luis Dreyfus, the ***'s "turnaround master", took over Adidas and began to reorganize the management, divide the organizational structure according to business units and sports goods categories, and gradually shift the supply chain to lower-cost Asia , Cut off a large number of product lines that are not related to sports, reshape the brand image of Adidas sports professional, and successfully turned losses into profits, surpassing Reebok to become the second sports footwear brand in the US market.
In 1972, Adidas gradually replaced the early three-striped logo with clover, but since 1996, the clover logo has been exclusively used in the classic series of Original products. The classic series is based on the best products in the history of Adidas. It is re-released after slight modifications to its fabrics and styles. Each classic series has a unique brand story and connotation, and the entire series is more fashionable. Covering shoes, clothing and various sports accessories, building a strong brand culture.
In 1997, Adidas acquired the French Salmon Group, a manufacturer of winter sports goods, to breathe life into the golf series. In 2002, Adidas officially launched its product layout, and divided into three product systems: sports performance series, sports traditional series and sports fashion series. The three systems are clearly positioned, each with its own merits, covering the diverse needs of consumers, helping Adidas to rapidly expand the global market and enter the fierce competition with Nike. In 2006, Adidas acquired competitor Reebok for US$3.8 billion and began to catch up with Nike. Although the total revenue is still not as good as Nike, in 2012, Adidas has begun to throw away Nike in revenue and profit growth.
In 2015, Adidas launched the "Creatingthenew" program, hoping to build on the success of the previous stage, with the help of the five driving forces of football, running, sports classics and children's categories, through the core city, speed and resource development three guidelines, to " ***Sports brand" goal is advancing. In 2017, Adidas sold its golf and ice hockey businesses to focus on the development of the main brand. By 2019, Adi proposed to expand the number of Chinese stores from 9,000 to 12,000 in 2020.
1.2 Online channels grow against the trend, and Greater China leads the market
The main business of Adidas is divided into Adidas brand sales and Reebok brand sales.
Adidas brand mainly provides the following 5 categories: running series, training series, football series, basketball series and outdoor series. The training series includes training shoes, training clothing and sports equipment. At the same time, the company is specially designed for children and other special sports or leisure sports related products, such as outdoor hiking shoes, rugby, volleyball and other outdoor sports.
Reebok is a brand of Adidas, with classic series CLASSICS, star series and fitness series FITNESS.
Adidas stabilizes its position as an industry giant under the epidemic of health incidents
Due to the spread of health incidents worldwide, the company's overall turnover in FY2020H1 dropped by 26% to 8.332 billion euros. Q1 net sales decreased by 19% from the same period last year to 4.753 billion euros, of which Adidas series revenue accounted for 90%, Reebok series revenue accounted for 8%; Q2 net sales fell 35% from the same period last year to 3.579 billion Euro, of which Adidas series revenue accounted for 92%, Reebok series revenue accounted for 6%.
Online channels grow against the trend and gradually become a stable source of revenue
Although the net sales of FY2020Q1 and Q2 have declined rapidly, it is worth noting that e-commerce channels are growing against the trend. The growth rate of e-commerce channels in 2020Q2 will reach 93%, showing that the company's continuous online platform efforts have achieved significant results , Such as Adi’s official website online sales platform, Taobao Tmall flagship store, APP, short video live broadcast, and other diversified online channels have achieved good results during the health incident, and made up for the large-scale offline due to health incidents. The impact of the store.
Greater China takes the lead in recovery, leading the market
In April 2020, Adidas ushered in the most severe stage. 70% of offline stores around the world were closed, but at the same time the Greater China region ushered in a recovery. By May, the Greater China region ushered in contrarian growth. The second quarter The overall performance has been the same as last year.
2. With technology as the core, leading the fashion trend, creating a unique positioning and giving play to the star effect
2.1 R&D to win, build strong technical barriers
2.1.1 Core technology to build a brand moat, continuous investment in research and development
Adidas' continuous product innovation has attracted a large number of athletes and sports enthusiasts, and has a number of industry-leading core technologies. At the same time, Adidas itself is also continuously investing and cooperating in research and development products. In 2017, Adidas research and development expenses reached a peak of 187 million euros. In 2018, research and development expenses reached 153 million euros, accounting for 0.7% of net sales. In 2019, R&D expenses reached 152 million. Euro, 0.6% of net sales
Adidas' main technology can be divided into two aspects: vamp technology and cushioning technology. The vamp technology is mainly Primeknit. This technology aims to use computer control technology to prepare materials of different densities for each part of the vamp for better fit. The consumer's foot shape also brings more light and comfortable features.
The cushioning technology is Boost, which brought the highest energy feedback to running at the time. Boost combined the two characteristics that have been contradictory in the past, "soft cushioning" and "keen responsiveness". Together, bring a whole new experience to running.
Boost technology is a kind of foaming technology, a breakthrough development process created by the world's leading chemical company BASF. Adidas uses BASF's new foamed microspheres Infinergy to develop the Boost series of running shoes with excellent elasticity and shock absorption characteristics. Infinergy is mainly composed of expanded thermoplastic polyurethane (E-TPU). After pressure and heating pretreatment, the original 5 mm particles can expand like popcorn. In this process, the volume of the elliptical microspheres containing micro airtight bubbles will increase 10 times. These closed bubbles can give the foamed microspheres excellent elasticity and desired rebound effect. Each Adidas running shoe contains 2500 foam microspheres, which can provide strong elasticity and cushioning when combined. Some people describe Infinergy foamed microspheres as similar to energy-storing capsules. Another advantage of foamed microspheres is that they are not only light and handy, they can be used in relatively high temperatures no matter in the cold of minus 20 degrees Celsius or in the summer above 30 degrees Celsius. Maintain elasticity in a large temperature range, so that it will not have any impact on the running experience.
At present, both Boost and Primeknit technologies have been widely used in brand products and have achieved unanimous market recognition. In 2017, Adidas launched Futurecraft4D technology, which uses 3D printing technology to synthesize sneaker midsoles with resin materials. In the future, it can be tailored to different consumers. With its own characteristics, it creates its own running shoes to achieve the perfect combination of cushioning, stability and comfort.
2.1.2 Efficient linkage with foundry companies to continuously promote product development
Adidas maintains interaction with the R&D of foundry companies. Since brand companies only have design and sales capabilities, they must maintain close cooperation with manufacturing companies. Take the Baocheng jogging shoe R&D center in Gaobu Industrial Park in Dongguan as an example. The R&D of shoes is done by the designers of Adidas and the personnel of the R&D center. Adidas is mainly responsible for product design, and the R&D center is responsible for the entire production process. All process links. The R&D interaction has enabled Adidas and Baocheng to have an embedded interface. With this interface, the design scheme of Adidas products can be turned into a production scheme. The design success rate of the R&D center has reached more than 90%. This guarantees the effective operation of the adidas sports commodity kingdom.
2.2 Enter the fashion field, grasp consumer trends, and create a unique positioning
Adidas focuses on technology and product functionality while also focusing on fashion. In 2014, Adidas announced the cooperation with KanyeWest, with the core Boost sole technology equipped with breathable woven material Primeknit, the launch of the ***YeezyBoost750 series has achieved great success since its release. KanyeWest took the opportunity to create a second joint shoe model, and cooperated with online marketing and celebrities to bring the Yeezy series to a climax. This series simultaneously promoted the exposure and topic volume among young consumer groups, opening up new markets for the group's series of product sales. According to a report released by L2, in the 12 months of 2017, adidas’ click-through rate exceeded Nike’s in both Instagram and email channels. At the same time, adidas’ US market share has almost doubled between 2016 and 2017. As of the end of May 2017, the brand’s US market share was 11.3%, compared to only 6.3% in the same period in 2016. The group’s goal for this year is 15% to 20%, about to double Nike's home market. The products not only bring a stronger sense of fashion, but also show certain investment attributes.
In addition, Adi has also made major efforts in cross-border cooperation. In addition, Adi has also made major efforts in cross-border cooperation. Invited celebrity spokespersons such as Lu Han, Zheng Kai, Di Lieba, etc., for young fashion groups, the styles are more fashionable and cool, and are widely praised in the industry. Y-3 is a high-end sports brand jointly created by one of Japan's most outstanding designers, Yamamoto Yoji and Adidas. Y represents Yoji Yamamoto, and 3 represents the classic three-bar logo of adidas. Y-3 represents Adidas's forefront of fashion exploration, landing on the stage of Paris Fashion Week year after year.
Adidas accurately grasped consumer trends, demonstrated the brand's features of both functionality and fashion, and created Adidas' unique brand positioning. The company not only has professional sports equipment products such as running, training, football, basketball, outdoor, etc., but also has three distinct product series: sports performance series adidasperformance (three stripes), sports traditional series adidasoriginals (clover) and sports fashion series adidasstyle (spherical LOGO) (divided into three sub-brands: Y-3, SLVR, NEOLABEL). The diversified brand portfolio allows Adidas to meet all market needs from professional athletes to almost every consumer, maintaining a unique position in the industry.
2.3 Give full play to the star effect and continue to make beautiful advertisements for the launch of subsequent new products
The top-down marketing strategy is one of the driving forces of Adidas' success. It first binds top-level star athletes and international events, and then radiates to sports enthusiasts, eventually reaching a wide range of mass markets, and continuing to expand brand influence . In terms of international competitions, Adidas continues to strengthen its relationship with UEFA and the International Olympic Committee. The origin of Adidas and the Olympic Games can be traced back to 1928. Since the founder Adidas Dassler produced the first product for the Amsterdam Olympic athletes, the two names have been inextricably linked.
Adidas has always been in the World Cup. Since the 1970 World Cup, Adidas has become the official sponsor of the FIFA official ball and will provide the ball for each subsequent World Cup. In 2012, Adidas, as a sponsor of the London Olympic Games***, sponsored a total of 100 million pounds. In 2013, FIFA officially announced that it would extend the long-term cooperation agreement with Adidas, and continue to grant Adidas the right to serve as the official partner, supplier and product franchise seller of the FIFA World Cup and all FIFA events until 2030.
As the world’s leading football brand, Adidas is a long-term official sponsor of important world football events, including the FIFA World Cup, FIFA Confederations Cup, UEFA Champions League, UEFA Europa League and UEFA European Football Championship.
At the same time, Adidas also sponsors many world clubs, including Real Madrid, Bayern Munich, Manchester United and Juventus. Adidas also controls the world's top player resources, including Messi, the first five-time Golden Globe winner in football history, and top stars Bell, Harvey, Benzema, etc.
In 2019, Adidas and David Beckham jointly launched ULTRABOOST19DB99, which continues to promote the brand's spirit and fashion attitude. The name is derived from the acronym of David Beckham, and 99 corresponds to 1999, which was particularly important for him. The design inspiration of the DB99 running shoes comes from Beckham’s life experience, including his review and prospects of his past life: in 1999, he and his wife completed a lifelong event, and also ushered in the birth of their eldest son; the same year, He led his team to win many important championships and won the title of "Triple Crown" for the club.
Adidas' investment in sports stars also extends to the e-sports industry. In 2017, the Adidas brand became one of the sponsors of the French e-sports club TeamVitality, and in 2018 it also reached a contract with the Lyon (China) EDG e-sports club. Adidas has also cooperated with game company EASports to launch adidasGMR insoles that can integrate real football and e-sports. At the same time, it creates the fourth jersey of e-sports concept for popular football clubs Real Madrid, Manchester United, Bayern Munich and Juventus, realizing traditional sports and E-sports combined marketing creates a new pattern in the sports industry.
In August 2019, Adidas announced that the brand has signed the first e-sports player Ninjia. Ninjia, as the super-popular e-sports anchor of major foreign live broadcast platforms, was published as a cover character by the veteran American sports magazine "ESPN" for the first time, and every issue before that The characters are all traditional sports athletes.
2.4 Implement the "innovation" strategy and pay equal attention to the digitalization of the supply chain
2.4.1 Deeply cultivated the Chinese market, opening a new phase of "innovation"
Adidas began to pay attention to the Chinese sporting goods market in 1980 and established a brand promotion agency in China. In the decades of market advancement, we have maintained an attitude of wait-and-see and explore the development of the Chinese market. However, from 2014 to 2019, Adidas' market share in the Chinese sports market has maintained steady growth for five consecutive years. In 2018, it ranked first in the Chinese sports market, 0.5 percentage points ahead of Nike. In 2019, Adidas' new headquarters in Asia Pacific and Greater China, Homecourt, opened in Shanghai, opening a new chapter in the "Innovation" strategy. Adidas radiates the Asia-Pacific region with Shanghai as its center, promotes the expansion of retail business and new city business, and accelerates the development of the Greater China and Asia-Pacific markets.
2.4.2 Outsourcing logistics guarantees the continuous operation of the brand
If Nike’s success is a manifestation of the combination of brand, marketing and logistics, then Adidas’ success in the relatively backward brand strategy is due to the cost savings in the supply chain. Unlike Nike's use of its own logistics system, Adidas chose to outsource other logistics operations after cost accounting, effectively reducing operating costs when the logistics system is not yet complete.
As early as 1996, Adidas decided to outsource its clothing distribution business in the United States to UPS Global Logistics. A year later, the distribution of sports shoes was outsourced to CALIBER logistics company. Adidas has always insisted on cooperating with international logistics companies. The cooperation with these companies has enabled Adidas to produce good benefits, which not only greatly saves costs, but also improves the quality of logistics services so that its products can be quickly delivered to customers.
Outsourcing logistics is very important for expanding the market, especially for an industry with a high demand for market coverage. In the 20 years of rapid development of global sports brands in the 21st century, Adidas has also accelerated the resource integration of its supply chain outsourcing logistics. Outsourcing logistics based on the global supply chain has become a powerful weapon for Adidas to integrate the global market.
2.4.3 Digital means strengthen channel construction and enhance consumer experience
Facing the increasingly fiercely competitive market, Adidas uses digital means to strengthen channel construction. North America, the Greater China region and the e-commerce sector have all contributed greatly to the company's net sales growth. In particular, the online sector is the fastest growing channel for Adidas, with a year-on-year growth of 34% in 2019, which also confirms the strategic importance of using adidas.com and reebok.com to build perfect online stores for consumers. Online channels are gradually becoming an area where Adidas focuses its efforts. Whether it is a digital store or an online APP, it is connected and integrated through digital means to increase retail efficiency.
In addition, Adi uses digital means to build digital stores, which improves the consumer experience while increasing store utilization efficiency and reducing labor costs. In 2019, Adidas opened a new four-story Adidas brand flagship store on Oxford Street, London, which is the most digital store in Adidas' history. There are more than 100 electronic touch points, powered by green energy, and provide consumers with a high-quality retail experience through an innovative digital platform. The company's flagship stores in Paris and New York will gradually develop simultaneously with London, and plans to open new flagship stores in Los Angeles, Tokyo and Shanghai.
3. Resume Adi’s successful experience, local sporting goods have huge potential
3.1 Taking functionality as the core, focusing on technology research and development, and adhering to the fashion strategy
Throughout the development history of Adidas, the birth of the sports goods giant is inseparable from the pursuit of functionality and technology research and development. At the end of the 20th century, Adidas' multi-brand strategy was not yet mature, brand positioning appeared chaotic, performance declined, and market share lost. At the beginning of the 21st century, Adidas resumed its strong investment in professional sports, got out of the haze of performance, and regained market share. Although Boost technology has brought huge revenue to Adidas, in the face of the fact that all brands in the sports industry are focusing on technology research and development, it is very important for Adidas to continue to innovate in future technology.
Among local sports brands, Anta continues to promote technology research and development, launching clothing technologies such as breathable comfort, warmth, waterproof and bacteria-proof, as well as footwear technologies such as outsole, rebound cushioning, package support and breathing mesh upper. Li Ning (02331) also focuses on the research and development of functional products such as basketball, running, comprehensive training, and sports fashion. The midsole technology represented by Li Ninghu, Li Ningyun and Li Ninghuan bow continues to improve the wearing experience of products. For local brands, only by attaching importance to technological innovation, continuously investing in research and development funds, and accelerating the speed of research and development can they maintain their brand's competitiveness in the sports market.
On the basis of focusing on functionality and technology research and development, making full use of the entertainment resources that have been integrated and cooperating, and continuing to adhere to the fashion development strategy is conducive to the establishment of resonance between sports brands and consumers, and thus rapid market expansion.
3.2 Grasp the trend of the times, give full play to local advantages, and maintain the balance of the supply chain
After entering the 21st century, the sporting goods industry has become more and more cost-sensitive. Due to the rapid increase in supply, small changes in unit costs will cause huge changes in total costs. The sales period of one style of sports shoes has been reduced to 8-9 months, which is more than half shorter than the previous one. The life cycle of the shoe type has also been shortened from the previous 5-6 months to about 3 months. The frequency of orders placed by the foundry is also From once every half a month to once a week.
In order to cope with this adjustment, the protection of the supply chain by sports brands is extremely important. On the one hand, various brands are increasing their production outlets. Nike has stepped up its local factories in Asia, South America, Australia and the United States. Adidas has also deployed outsourced logistics in various places. Diversification of production areas can achieve a benign interaction between different markets, and quickly transfer unsalable products in some markets to adjacent markets.
Local sports brands should give full play to their location advantages, consolidate the supply chain with the help of manufacturing and logistics advantages in Greater China, and gradually extend to surrounding markets to create new international brands.
3.3 Prioritize the maintenance of private brand development, and carefully select merger targets
After Reebok was acquired by Adidas, it was tepid, and its brand remodeling was hindered. The sports brand Reebok, founded in 1895, was once a star brand in the United States. Since its establishment, it has been a strong competitor of Adidas and Nike. Won the sponsorship contracts of the three major sports events in the United States NFL (American Football League), NBA (Major Basketball League) and NHL (National Hockey League), and also signed *** basketball stars O'Neill, Iverson and Yao Ming.
In 2006, Adidas bought Reebok for US$3.6 billion in an effort to fight Nike with all its strength. At that time, the deal was called "the first acquisition in the history of sports brands." In the first few years of the acquisition, Reebok brought adidas performance growth, but the brand growth afterwards gradually weakened, the product positioning was blurred, and the sports league resources were lost, and it once became the burden of the Adidas Group.
Betting on the Chinese market, Reebok will return to the world. In 2017, Adidas CEO Casper Rosted announced a renewed detailed plan for Reebok, giving the brand's development direction in the next four years, focusing on the fitness field and trying to renew Realize profitability and contribute to Adidas. For this reason, as a sub-brand, Reebok has set its sights on the Asian market, especially the Greater China market. In 2017, Reebok launched the China plan ambitiously, setting a goal of opening 500 stores in three years, leveraging on digitalization and fitness trends, and signing a number of Chinese stars. Reebok’s “China Plan” has achieved remarkable results. In FY2018, although Reebok’s global sales continued to decline, the Asia-Pacific market bucked the trend and grew by 3%, becoming the fastest-growing region. Reebok’s global growth resumed in FY2019. The amount increased by 2% year-on-year.
Clear positioning and diversification are vital to the future development of local brands. Anta Sports has implemented a multi-brand strategy in recent years. Since acquiring FILA's China business in 2009, it has achieved strong growth through precise brand positioning and marketing strategies. 2020H1 contributed 7.152 billion yuan in revenue to the company, a year-on-year increase of 9.4%. For Anta, how to make many sub-brands to make up for their own market vacancies and form a benign brand interaction under the premise of maintaining their characteristics requires careful progress.
4. Risk warning
The slowdown in global economic activities has adverse effects. The spread of the virus has caused continuous damage to international trade, investment and consumer confidence. The large-scale outbreak of health incidents and the reduction of private consumption have led to a decline in the consumption level of developing economies, and the adoption of blockade policies and other restrictive policies in advanced economies has led to a decline in economic output. Although the economy gradually recovered in the second half of the year, due to increased uncertainty, downside risks dominated.
The global sports industry is negatively affected by the virus pandemic. Uncertainty about the introduction of certain restrictions on sales and other restrictions has increased, which will further affect consumer confidence and industry growth in major markets. Against this unfavorable background, the demand for sporting goods is expected to continue, although digital channels will continue to partially compensate for the adverse effects of store closures and social distancing measures, but they will still be restricted. Although the long-term positive driving factors of industries such as the increasing popularity of sports-inspired clothing and footwear ("sports and leisure") have been amplified by health incidents, the long-term decline in economic activity will still be a near-term downside risk for the sporting goods industry.
intense market competition. Promotional partnerships between established industries and new market entrants pose a major risk to the company, which may lead to harmful competitive behaviors, such as continuous market discounts. Failure to recognize and respond to the integration of the retail industry may result in Increased reliance on specific retail partners reduces bargaining power and increases costs, resulting in lower profits.
The failed distribution strategy adjustments of physical retail and digital retail may result in insufficient sales and profits. Shopping malls and other specific shopping locations are less attractive, inventory on the market increases, clearance activities increase, and profit margins are under pressure.
The fashion field cannot quickly cater to consumer needs. Consumer needs and fashion trends are constantly changing rapidly, and short-term income risks will be caused when they cannot respond quickly to related changes in demand. In addition, creating and providing products that cannot resonate with consumers and retail partners are key risks for brands.
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