Corona outbreaks, boycott calls and supply chain problems – what is happening in the Middle Kingdom is causing problems for the world’s second largest sporting goods manufacturer and is spoiling the anticipation of the football World Cup, which is important for Adidas. Salvation comes from the west.
Adidas shop in Beijing: Many sales outlets of the sporting goods group are affected by the corona lockdown in numerous Chinese cities.
2022 could have been a very good year for Adidas. The most important sporting event in the world is on the agenda with the football World Cup in Qatar at Christmas time. There is also the European Football Championship for women in England and the World Championships in Athletics in the USA. At the beginning of the year there were already the Winter Olympics in Beijing. 2022 is therefore a super sport year. Furthermore, a large part of the world is recovering from the corona pandemic and people want to catch up on postponed consumption desires.
Almost 50 cities in lockdown
But one region is out of line: Asia and China in particular, one of Adidas’ most important individual markets, are still under the spell of the pandemic. The government in the Middle Kingdom reacts to every small corona outbreak with drastic shutdowns of public life. According to Adidas boss Kasper Rorsted, around 45 larger cities are now in “lockdown” again, including Shanghai, the largest metropolis in the country. In Beijing, too, public life is increasingly being shut down.
This affects a significant proportion of Adidas outlets in the country. In addition, there have been state-controlled boycott campaigns against Western clothing manufacturers for the past year. The background is a discussion about possible forced labor in the Xinjiang region, which is also inhabited by Uyghurs.
Adidas with sales slump
That’s why he is Adidas sales in China down 35 percent in the first three months, down 16 percent in Asia Pacific. There are also major problems in Vietnam, for example, where Adidas produces. In addition, there are bottlenecks, especially in the supply chain that leads to Europe, and massively increased freight costs. However, Adidas is growing by 13 percent in the western world – particularly in North America, Europe and Latin America. This makes a major contribution to compensating for the slump in China. Here Adidas helps the historically grown strong diversification over the most important global markets.
This is also important news for other German companies with a focus on China: After the experience with Russia, risk diversification will remain the order of the day for a long time to come.
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