With the downturn of the global economy, it is obvious that foreign companies are in a difficult position in the Chinese market. The well-known sports brand Adidas has also been unable to withstand the pressure and started an online "promotion wave". To know that as the head brand of the sports series, Adidas's super strength "discount" is rare.
Since China started to resume production, economic development has obviously accelerated. However, due to the unclear situation abroad, China's export business has also been forced to stop. At the same time, foreign brands are also following thin ice. According to the latest report from the financial institution Credit Suisse, Adidas, the former head sports brand, is in a difficult situation.
On April 19th, Credit Suisse issued a report that adidas, which is suffering from inventory pressure, once again faced serious challenges in the Chinese market after closing stores in Europe and North America.
According to the report, Adidas's self-operated and distributors are facing the problem of excess inventory. According to incomplete statistics, Adidas' inventory currently exceeds 1.6 billion euros (about 16 billion yuan). Due to the impact of inventory pressure, Adidas' assets and profitability have been significantly squeezed by high inventory.
The root cause of high inventory is still because of Adidas brand structure. As a well-known German sports brand, Adidas products are very popular among the Chinese people. As can be seen from the spokesperson invited by Adidas, this foreign capital from Germany is mixed in China.
It is also because of this "confidence" that Adidas has no previous sense of crisis. After tasting the dividends in the Chinese market, Adidas abandoned the original wholesale distribution structure and prepared more than a year of product inventory in the Chinese market in advance. At the end of December 2019, Adidas' inventory has increased from 3.45 billion euros at the end of 2018 to 4.09 billion euros.
But unfortunately, no one can predict the economic development situation in 2020, and the large inventory carefully prepared by Adidas has now become one of the drags of Adidas' development. Since entering February, the sales volume of Adidas is not as good as one day, and the business volume in the Chinese market has decreased by 85% year-on-year!
In order to recover losses as much as possible, Adidas launched three consecutive online promotions with huge discounts in April. Not only that, even some offline stores launched the "buy one get one free" campaign. It has to be said that in the face of the big environment, a brand with even more strength will still bow its head to reality.
Regarding Adidas' "crazy" promotional activities, many netizens said that they are ready to prepare "wool". After all, in this environment, in addition to the relatively high prices of medical supplies, many daily necessities are working Discounts. Even famous international brands like Adidas are no exception.
Before Adidas has closed stores in Europe and North America, the Chinese market has become the best market for Adidas to turn over, but because the economy has not yet recovered, despite the international brand, consumers still do not pay. In order to reduce the pressure on inventory, Adidas has launched 3 promotional activities, will you go to pay?
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