On Friday, Colin Currie a spokesperson for the German sportswear maker said that the company would expand its China business from 9,000 stores to 12,000 stores by 2020. Plus, Adidas also plans to sell its products in twice as many cities it currently does.
The decision seems to defy concerns over an economic slowdown that may hurt sales. Yet, the German sportswear giant based its decision on new policies on population growth and Beijing’s plans to encourage soccer among the young population.
Furthermore, Adidas also expects smaller urban areas to continue to grow despite current economic challenges.
“We are cautiously optimistic, but we’re far more on the optimistic side,”
He added that the Chinese sportswear market is currently the fastest growing in the world. This may be why Adidas saw record sales despite other foreign businesses’ slump in sales.
According to a recent financial report, the company’s 2015 sales in China jumped 18 percent, while in the fourth quarter sales volume was 16 percent higher. Analysts believe that the rapid growth is mainly due to the Adidas’ aggressive strategies of expansion.
China is now the perfect place to run a sportswear business, as the middle-class is now increasingly interested in a healthy living, staying fit, and has enough money to go outdoors more and take up sports.
The Chinese’s growing appetite for sports activities is reflected by the $25.3 billion sportswear industry which has equipped China with all sorts of items from swimsuits to track sneakers. In 2015 the industry grew 11 percent from a year prior, Euromonitor International data suggests.
What’s more, Beijing is heavily promoting the development of sports by various means including building athletic venues, sponsoring large sports events, and funding dedicated television stations.
But the big star is soccer since the country’s president is a die-hard fan of the “King of Sports.” In a recent announcement, President Xi Jinping unveiled his dream of seeing China hosting and winning the World Cup.
Chinese billionaires have already heavily invested in soccer teams located abroad while Chinese soccer clubs have paid astronomical transfer fees for the best players from Europe. About 20 percent of the Atlético Madrid, a popular soccer club in Spain, was acquired by China-based Dalian Wanda Group last year.
But the icing on the cake for Adidas is the Chinese government’s decision to make soccer mandatory in the country’s 20,000 elementary and middle schools. The German sportswear manufacturer hopes to mimic Nike’s strategy of betting on the Chinese’s newly found love for basketball which has made the Oregon-based company No. 1 sports brand in China.
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