Sports goods manufacturer Adidas has ambitious plans for China. By 2010, it wants to reap 10 percent of its worldwide profits there. The company, which is officially sponsoring the Olympic Games, has also opened this month its biggest shop worldwide in Beijing.
Chinese workers carry an Adidas shoe model outside the new Adidas Brand Center in Beijing
A quick poll on the streets of Beijing shows how aggressive the Chinese sporting goods market is. The Chinese people are well aware of various sporting brands. The popular brands include Li Ning, Nike, Puma and Adidas.
Adidas hopes to have a turnover of one billion Euros by 2010. Adidas CEO Erich Stamminger thinks the aim may even be achieved before. The group has already made 70 percent more profit this year than during the same period in 2007. He says that with more Chinese people engaging in sport, it is the fastest growing market in the world. Also, China has the most basketball players in the world.
“Because of economic growth, more and more people can afford sporting equipment. At the moment we have 4,500 stores and every day three more open up,” says Stamminger.
Olympics as a good platform
The world’s biggest Adidas store is in Beijing -- with a size of almost 3,200 square metres the store on four levels is double the size of the previous flagship store in Paris. As an official sponsor Adidas is allowed to have the logo and rings on its goods. The firm has developed an Olympic collection for visiting fans that will only be on sale in China. Adidas is outfitting all officials, staff and volunteers for the games. As well as providing all the presentation uniforms for the Chinese athletes, explains marketing manager Jochen Haase.
Haase says that when the Chinese athletes will go up to the podium it can be rest assured that the whole of China will be watching. At this moment, the athletes will be wearing Adidas presentation suits, irrespective of their individual sponsoring contracts.
“We just got the latest figures from our marketing research and they show that the women’s volleyball team is extremely popular in China. That’s why we’re placing a special focus on it during the games,” says Haase.
For the sporting events themselves, most of the other Chinese teams will be wearing clothes made by the competition -- by Nike and Li Ning for instance.
Challenges from competing brands
Haase says he has been surprised by one thing in particular in the run-up to the Games -- the capacity the Chinese have of getting excited and involved. That’s why this factor has been flagged up at the Beijing super store -- it has a basketball court for example. Just a few metres away is a shop, which sells pirated sporting goods.
Haase knows that Adidas’s lawyers will have to pay big money to keep fighting this phenomenon. “At the moment, we’re concentrating on our marketing activities so that we have a good contact with customers and persuade people to buy the real product,” he says.
Adidas has reportedly had to pay $100 million for the right to use the official Olympic logo on its goods within China and Hong Kong over a period of four years. But although Nike and other companies have not paid such a sum they too will be very visible during the August Games.