The fight for the title of China’s top sports apparel brand is becoming a one-on-one match between Germany’s Adidas AG and the American superstars, Nike, who currently holds the top ranking.
“China has shown that it is more interested in leisure and fashion than any other country” where Adidas operates, Adidas Chief Executive Herbert Hainer said. The company plans to bank on this burgeoning market by promoting lines of high fashion and children’s wear. In doing so, Adidas hopes to surpass its estimated $1.3 billion revenue in 2011 for China, Hong Kong, and Taiwan, but the competition is fierce.
The market research firm Euromonitor pegs Nikes as the country’s number-one producer of sportswear, with 7,500 outlets that sell its products across the country compared to Adidas’s 6,700 retail stores.
“Sports companies have to maintain credible roots in athletic performance to remain differentiated from their ‘pure’ fashion-brand competitors,” said Torsten Stocker, a partner at U.S.-based consulting firm Monitor Group.
Adidas is hoping its new line, NEO, featuring casual hooded jackets and marketed to teens, will give it the competitive edge over Nike. NEO aims to be a gateway line for consumers with tighter budgets or with shoppers in lower-tier cities, where Mr. Hainer said he sees two-thirds of the company’s opportunity. As consumer budgets grow, shoppers will have more access to Adidas’s higher-end products, he said.
Adidas sales in China jumped to €900 million ($1.2 billion) in the first nine months of last year, up 28% from a year earlier, Mr. Hainer said.
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