Adidas CEO acknowledged: I made mistakes in China

"China (market) will come back."

On the 9th local time, Adidas CEO Kasper Rorsted was interviewed in an interview with the German Business Daily (HandelsBlatt) that the revenue of Adidas in the first quarter of Greater China fell 35%, which was mainly affected by the new crown epidemic, and Adidas I also "made mistakes." But he believes that the Chinese market will return and have a lot of room for growth.

In the interview

Luo Side admitted in an interview that Adidas made a mistake in China. "We don't know enough about consumers, so we have left space for those Chinese competitors who have done better ... Today's Chinese consumers like (product) have a" Chinese feeling '. "

He believes that the main reason for Adidas's income in Greater China is the new crown epidemic and the "resistance" of the people, but he does not think that China will eventually abandon Western brands. "Then all world brands will encounter trouble. I think this is unrealistic. The Chinese market will return, and there is still a lot of room for growth."

However, Luo Side did not deny another severe possibility. If the Chinese market reaction is not as good as expected, it may destroy Adidas' revenue goals by 2025. "If the initial assumptions change permanently, we will also have to adjust our goals."

On May 6, local time, German sports brand Adidas announced the first quarter of 2022. Affected by the supply chain restrictions and epidemic related blockade measures, Adidas' revenue and operating profits in the first quarter of this year have declined, and at the same time, the performance expectations of the 2022 fiscal year have been reduced.

Luo Side information map

According to the financial report, in the first quarter of this year, Adidas revenue reached 5.302 billion euros. The exchange rate factor was not considered, and it fell 3%from the same period last year. Due to the significant increase in supply chain costs, the gross profit margin decreased by 1.9 percentage points to 49.9%.

Greater China was once the "pillar" of Adidas' revenue. By the end of fiscal year 2019, Adidas once achieved sales in the Greater China market for 23 consecutive quarters. However, from FY2020 due to the impact of the Xinjiang cotton incident and epidemic, Adidas continued to weaken in Greater China.

In the same month, the full annual financial report released by Adidas showed that the annual revenue reached 2.1234 billion euros, an increase of 15%year -on -year. The annual revenue of the Chinese market was 4.6 billion euros, a year -on -year increase of only 3%, the growth rate was far lower than 24%in the European and American markets and 16.6%of the North American market. As of the first quarter of 2022, Adidas' sales in China had been negatively increased for four consecutive quarters.

Affected by the slowdown in the Chinese and Russian markets, and global supply chain, Adidas has lowered its financial expectations in 2022.

Source: Observer.com

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