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Big Market, Big Goals: Adidas Plans 3,000 Stores In China

Adidas is planning to open 3,000 stores in China by 2020, making a major move into a market with a booming retail sector and more than one billion potential consumers.

The aggressive store expansion will increase the company’s imprint from 9,000 to 12,000 stores as it seeks to more than double the number of cities it sells its products in to more than 2,200.

Adidas seems to have caught on to China’s budding interest in athletic wear. China is already the second-largest global market for the brand and also is now its fastest-growing, with revenues in the country growing 18% year-over-year. China’s athletic wear market as a whole has increased 11%, reaching more than $25.3 billion, according to market research firm Euromonitor International.

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The retailer also paid close attention when it came to cultural changes, potentially giving it a leg up ahead of any other retailer trying to enter the market today or in the future. In 2014, the Chinese government mandated that soccer become a compulsory part of school curriculums. The next year Adidas signed a three-year deal to create soccer programs in 20,000 elementary and middle schools across China and run a national soccer camp, according to The Wall Street Journal.

Of course, having such an influence on the young Chinese audience could potentially lead many consumers to buy from the brand in the future, and it appears that’s what Adidas is banking on.

Retail Thrives Even As Economy Falters

Although the Chinese economy continues to see growth totals stagnate, the nation’s retail sales are forecast to increase 50%, reaching $6.5 trillion by 2020, according to Boston Consulting Group. Additionally, Chinese consumers are becoming more interested in foreign brands, making Germany-based Adidas feel better about its chances of success. During the 2015 holiday season, Chinese consumers were particularly favorable toward U.S. brands, with eight times as many consumers buying U.S. products online compared to the 2014 season.

While there hasn’t been a plethora of retailers flocking over the Pacific just yet, Under Armour has made expansion into China a massive priority in 2016, and will be opening a select portion of its 200 new global stores there. While Adidas presently has a head start in the region, Under Armour’s understanding of both the digital and physical experience can be a great asset towards creating serious competition in the future.

Although not in the athletic wear industry, H&M also has cashed in on the Chinese consumer’s demand for apparel, opening 54 stores there in Q4 2015. While the company hasn’t officially revealed its 2016 plans, it indicated in its 2015 full year report that China and the U.S. will be the markets with the largest number of new H&M stores.

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