Adidas "one on one off" China strategy

As the Olympic Games in London are approaching, Adidas , the official sponsor, has closed down its only direct factory in China, which is not in harmony with its recent high-profile development in China. However, it is not part of the negative remarks that the Chinese manufacturing base does not guarantee Another danger signal. The factory in Suzhou Industrial Park, only 160 employees, the main production of clothing , even non-own property, the size and Adidas largest foundry Yue Yuen Industrial is difficult to compare with the latter's tens of thousands of employees and have Own industrial park Adidas official statement said that after the closure of the Suzhou plant, Adidas in China there are still more than 300 foundries to provide their products. Adidas calendar year reports show that until 2011, China is still the largest source of their purchases, accounting for 30% of the share, three years ago, this ratio was 32%. The main reason for the decline in the proportion is that it has increased purchases in other countries, thus diluting the proportion of purchases made in China. In terms of sales, adidas in the first quarter of this year, China's market sales of 385 million euros, an increase of 26%, accounting for the first time the proportion of global sales of more than 10%. Last year, adidas Group sales increased 13%, while in Greater China this figure is 23%. As Adidas, Nike 's footwear foundry, Yue Yuen Industrial's annual report further confirmed this argument. Earnings in 2011 show that Yue Yuen Industrial added a total of 16.7% to 537 production lines, most of which are located in three major production bases - China, Vietnam and Indonesia. Respectively, with 255,140 and 134 production lines, while the 2010 earnings in the figures were: 226,120,114. China's stock and increment are still the largest. Adidas and other international brands in the domestic production mainly in the form of foundry, foundry has no sales rights, domestic sales of its products need to be exported to domestic sales, combined with China's labor costs have ranked third in Asia, Indonesia and Vietnam twice (ChinaBriefing Latest survey). Therefore, in terms of sales in the domestic market, the import of shoes produced in Southeast Asia will not be higher than the cost of shoes produced domestically because of tariffs. The above factors may cause enterprises to divert some of the production lines to shift their risks. Although the adidas Suzhou plant shut down, but at present adidas sole logistics warehousing center in China will continue to be retained in Suzhou, and there is news that a new warehouse in Tianjin will soon be completed renovation. In comparison with the more mature foreign markets, the domestic logistics situation as a whole has not been improved yet. Some of the big sportswear brands have long relied on force, Yaku join the business, let alone risk. This is also due to historical reasons, the original shop in China will be able to make money, and basically all single-brand stores. And when the brand, franchisee in the country has six or seven thousand stores in the number of inevitably there is a huge inventory pressure, when the ability to inventory inventory under the high becomes crucial. In 2004-2008, due to the rocket-style growth of the entire industry, Adidas also experienced serious inventory problems after the financial crisis and triggered a channel turmoil with a decline in performance. After two years of inventory digestion, Adidas formulated the "2015 Strategy", put forward five major growth models and five strategies. Announced the opening of 2,500 new stores in China by 2015. For this reason, the company reorganized and reorganized its organizational structure in more than six months and set up its Chengdu office in western and central China to strengthen the regionalized management mode and enhance its rapid response capability. In fact, in order to be able to keep up with the market demand timely and accurately, the logistics and inventory management in the garment retail industry will largely determine the "life and death" of the enterprise. The "one on one off" strategic adjustment in China, reflects the adidas "adhere to the foundry production and enhance the implementation of the supply chain," the strategic changes.