Dropped the ball? Adidas reports China decline
Herzogenaurach, Germany-headquartered sports group adidas recently reported that its second quarter (Q2) revenues grew by 51% (or more than €1.7 billion) on the previous year to reach almost €5.1 billion.
All global market segments increased for the company, except in Greater China.
In currency-neutral terms, year-on-year sales figures for Europe, the Middle East and Africa (EMEA) showed a rise of 99%. Similarly, North America was up 87% on the previous year. Latin America recorded triple-digit growth of 230%, whereas the Asia-Pacific grew 66%, despite the region’s extended covid-19-related lockdowns.
Greater China, however, declined 16% in Q2 terms (in marked contrast to the 156% rise adidas observed in the territory during the previous quarter).
Despite this, chief executive, Kasper Rørsted, noted how the company remained confident about the long-term, strategic opportunity in the market, “especially after the state council announced recently that they will further promote sport and exercise [in mainland China].”
Mr Rørsted went on to explain how showing Chinese consumers “appreciation and respect” and, in this way, earning their loyalty would be key to augmenting adidas’ global brand strength while also maintaining a “strong local angle and understanding” in Greater China.
“The trend in China is clearly positive,” he added, “and while it is too early to tell how the business in China will look in detail in 2021, we continue to expect strong growth there this year.”
The chief executive also commented how 97% of the group’s global stores were open by the end of June.
While e-commerce revenues dropped 14% overall in Q2, this was attributed to the fact that more customers were able to visit stores as lockdowns and restrictions eased globally.
