China Business Daily (reporter Zhou Ziyi see Xi reporter Wang Yifei) On November 30, Adidas South China***, located in Futian CBD, Shenzhen, closed its store in South China. It is understood that the store opened on December 18, 2021, with a total area of more than 3,200 square meters and three floors
Adidas store infographic. (Photo by China Business Daily reporter Tang Yan).
The purpose of opening a large enterprise is to enhance the brand image, which is a strategic choice. Ma Gang, an independent commentator on retail, told China Business Daily that the closure of the store shows that the store cannot meet the expected goals of Adidas, and in terms of performance, the store is not satisfactoryIn terms of image, the store attendance rate is not up to standard, and the two are the main reasons for store closures.
The store closure turmoil may be related to the growth cycle faced by the brand. Apparel analyst Yang Dajun told China Business Daily that in the past two years, Adidas has been making major strategic adjustments in China, Europe, and even the global region, including selling its Reebok, which it had acquired for $3.8 billion in 2021. The growth of enterprises is cyclical, and Adidas has undoubtedly entered a cyclical growth trap, and is constantly adjusting its strategy, including changing CEOs, designers, and adjusting marketing directions.
In the face of cyclical bottlenecks in corporate growth, Adidas has been moving continuously this year. It is understood that Adidas Group CEO Caspar Rorsted officially left his post this year. When Adidas announced the transition of CEO in August last year, Thomas, Chairman of the Group's Supervisory Board, said: "After three challenging years marked by the pandemic and geopolitical tensions, there has never been a better time to start the CEO transition and regroup. Rorsted also said that restarting in 2023 is the right thing to do.
In terms of market competition, Adidas is facing an impact. According to the sales list of the 2023 "Double 11" Shopping Festival released by the Tmall platform, in the sales list of sports brands, Nike is at the top of the list, followed by Anta's brand Fila and Anta's main brand.
In second and third place, Adidas ranked fourth, and Li Ning ranked fifth. Adidas has shown a certain decline in the new generation of consumer groups.
Emerging brands are also challenging traditional sports brand giants on the professional track. Yang Dajun told a reporter from China Business Daily: "In addition to facing competition with old brands such as Nike and Anta, in the Chinese market, Adidas also has to 'grab' the market with emerging brands such as lululemon." It is reported that in July 2022, Lululemon surpassed Adidas with a market value of $37.4 billion and rose to the second place among global sports brands. To become the second in the world, Lululemon took less than half the time of Adidas and Nike.
This kind of niche and young, professional-focused brand is more popular in the market, and its growth rate is rapid, and their impact on traditional sports brands such as Nike, Adidas, and Puma is very large. Yang Dajun said.
In addition, the weakening of offline *** functions is also one of the reasons why sports brands continue to reduce their stores. Generally speaking, it can provide enterprises with offline scene experience and make their own contributions to shaping a good brand image. With the rise of the Internet, consumers' consumption Xi has begun to shift online. It is self-evident that under the impact of e-commerce, the role of ** in attracting traffic or establishing brand image of enterprises has become smaller and smaller.
Not only Adidas, but other companies are also reducing the scale of offline ***. For example, Nike and Uniqlo stores in Sanlitun, Beijing, have downsized and relocated stores to reduce costs.
When the cyclical growth of the enterprise is in trouble, it is necessary to open up sources and reduce expenditure, and when the role of the enterprise is no longer directly related to the return on investment, it is inevitable to close the store. Yang Dajun said that not all industries will be affected by offline sales, high-end consumer goods industry online sales are not as good as offline, taking the three high-end consumer goods groups as an example, its online sales are less than 10% of offline sales.