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Running with the times to win consumers
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Beijing is on its way to becoming the first city to stage both the summer and winter Olympic Games, underscoring China’s rising position as a global sports powerhouse.
According to a Nielsen survey, 59 percent of China’s urban population are sports fans and 82 percent of them are aged between 26 and 45. More than a third of those fans come from households with annual incomes of 200,000 yuan (US$29,411) or more.
The State Council, China’s cabinet, is bent on accelerating the development of sports, with the aim of creating a sports industry valued at 5 trillion yuan by 2025.
The national plan seeks to improve the fitness of every citizen, encourage foreign investment and develop sports from the grassroots to elite athletes.
The prospects tantalize those in the sports industry, like Germany-based adidas, the world’s second-largest manufacturer of athletic shoes, clothing and accessories.
Colin Currie, managing director of adidas Asia Pacific, talked with Shanghai Daily in an exclusive interview about the company’s role in China’s sports development.
Currie joined adidas in 2005 as managing director of the company’s Hong Kong operations. He has heading up China operators since 2011.
Prior to 2011, adidas’ China business was less than 1 billion euros (US$1.17 billion). Last year, sales grew to 3.7 billion euros.
Q: What’s the biggest change in the industry since China reformed and opened up its economy to the world?
A: The reform and opening up has brought sports and exercise closer to people’s lives. People have more access to sports facilities, more variety of sports to play and follow, and more choice in athletic apparel and products.
We set up our regional headquarters in China in 1997. At that time, not many foreign sports brands were present here, and people were just starting to become familiar with foreign brands.
As the economy developed and the government prioritized building public sports facilities and promoting sports education, sports became more accessible, not only through sports events but also through accessibility for billions of people in their everyday lives.
Q: What’s your strategy here in China?
A: I think the turning point for the industry was 2008. Whereas previously there were only five to 10 major brands, the marketplace became much more competitive and saturated with a lot of different brands after that year.
We now need to ensure we can deliver the right product to the right consumer instead of just opening doors and displaying our existing merchandise.
The sportswear industry has become blurred in recent years. Fast fashion brands such as Zara and Uniqlo as well as luxury brands are making sneakers.
We realize there’s a big sports casual market, where consumers want to wear our products on the street, at home and in their communities.
Sports-performance products are still the majority of our business, but we’ve seen where sportswear is also more widely accepted in different occasions. I believe the strategy we’ve taken to go after the “athleisure” trend in the last three or four years is right for the market.
We want to stick to our roots as a sports company, which is to provide the best products and services for the athlete to perform better on court. But we also need to grab the trend that consumers want to wear sports products in everyday use.
Q: How do you tailor your retail strategy to the local market?
A: Later this year we’re opening our new brand center in Shanghai on Nanjing Road E., one of the biggest stores in China. It will serve as a beacon of our brand experience.
We want to allow consumers to be more creative and individual, and to sign up for exercise classes as well as to develop product and encourage their interaction.
Consumer data are also critical. We’re connected with nearly 11,000 stores and get data about the best-selling articles so we can track consumers’ preferences.
Q: How do you manage your relationship with distributors? What challenges do you face?
A: We need to be flexible to operate in a market like China, which has different geographical regions, and to stay on top of what consumers are thinking or we will get left behind.
Consumers in lower-tier cities are also adopting the new trends and learning much more quickly than those in key metropolises like Shanghai and Beijing did 10 years ago.
We’re still mainly a franchise distribution business and we operate our own stores to allow shoppers a consistent brand experience. We regard our brand centers as the laboratories of new retail concept so that we can then scale it to other cities in the future by working with distributors.
Talent is also a challenge when we manage our business on such a large scale, with so many people having good competency and capability, but every company wants good people.
Q: Will you participate in the China International Import Expo later this year in Shanghai?
A: We are excited for the opportunity to showcase our creativity in products and in operations at the expo.
This is an opportunity for consumers, industry leaders and policymakers to get to know adidas and the hundreds of companies that will be taking part in the expo.
I also expect to see hundreds of global brands showcasing the best of what they have to offer to China.
It’s an opportunity for everyone to get to know these brands better and think about ways to better serve the China market.
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