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The battleground between adidas, the world’s second largest seller of sporting goods, and Nike, its larger rival, is moving into China. Nike dominates not only the world market but also the Chinese sporting goods sector. Adidas wants to be able to make that claim, and to do so, it is betting on its NEO line.
Chinese consumers are frequent purchasers of sporting goods, though not necessarily for athletics. But at the same time, adidas cannot lose its connection to performance wear, because if consumers believe it has become all fashion and no sport, they are likely to replace it with less expensive, fast fashion options, or else just buy Nike.
The NEO line is casual and sporty and targeted toward teens, with prices approximately 40 percent less than other adidas brands. The related children’s products are somewhat more upscale, such as leather baby booties for $215. Adidas gambles that Chinese parents will splurge on their one child, and then as a teen, that child will want NEO products. Ultimately, an adult consumer who has dressed in adidas all his or her life is likely to purchase more upscale offerings, such as the Y-3 line of fur-trimmed leather trench coats for $3,100.
The move is dramatic: adidas is already selling in 6,700 outlets in China, compared with Nike’s 7,500 outlets, and its sales were up 28 percent from a year earlier, or $1.3 billion.
Discussion Questions:
Why is Adidas focusing on the Chinese market?
Source: Laurie Burkitt, “Adidas Goes Fashion-Forward in China,” The Wall Street Journal, February 20, 2012.
Grewal Levy Marketing News 
Adidas seems to be focusing on the Chinese Markets in order to gain lifelong “consumers.” Clearly, Adidas’s strategy is to latch onto these customers who wear athletic apparel from childhood; by taking into account China’s one child policy, and also teenage and professional purchasing habits in this rapidly growing (economically) country. In order to garner more information to determine whether this strategy will be successful or not, Adidas should see/conduct research on whether Chinese consumers purchase Adidas products for the “looks” or the “feel/athletic performance.” If for the feel, Adidas should focus on comfort and designing products to fit within the everyday professional and “city” lifestyle in the Chinese Market. If Adidas does go through and make products solely for the “feel,” they should make sure this reputation stays within China. However, if Adidas wants to design products focused on athletic performance, they can have a worldwide introduction without hurting their brand. In the end, it is a decision of whether Adidas wants to make future NEO lines tailored towards exploiting the Chinese market, or go forth with encompassing global sales at the expense of less Chinese buyers.
The Chinese Market was previously an opportunity for Adidas and a strength for its competitor Nike as it already acquired a large portion of the Chinese market share. As Adidas enters the market it is looking to gain customer loyalty and targets costumers from their early stages in life in order to provide a long lasting relationship. Adidas knows Nike has the upper hand in the Chinese market and understands that it needs to go after new consumers (teens and babies). Adidas believes that by doing so they will be able to retain customers and therefore sell more expensive lines to the adult consumer: ” an adult consumer who has dressed in adidas all his or her life is likely to purchase more upscale offerings.” Adidas sees China as an untapped market which, with a large population, and an emerging economy, has the potential to increase company revenues.