Adi's "Discount Coupons" Disturbance: "Laxatives" indigestion

When Chinese consumers quarreled over the "discount coupons" issued by Adidas, the former Chief Executive Officer of the sporting goods company "ZTE" was swiftly passed away. Adidas behind him was plagued by large inventory and debt. Adidas Whether or not he could “backwardly fight” like Robert did is still quite unknown.

According to media reports, adidas recently held sales in two stores in Beijing and Shanghai. The internal employees hold discount coupons up to a discount of 1.5%, but discount coupons for internal use only flow into society. At the time of adidas Beijing store sale, at most, more than 600 people lined up and the scene was so confusing that even the police had to come forward to maintain order; and a store in Adidas Shanghai had to go after the outflow of discount vouchers, citing “the Public Security Bureau did not approve” Canceled the sale.

Regarding the "discount storm," the reporter had contacted Adidas's relevant departments in Beijing and Shanghai yesterday and did not receive any reply. Analysts said that it is not surprising that Adidas has significantly discounted sales of inventory. After the Beijing Olympics in 2008, Adidas has been plagued by large inventory. Adidas Financial Report for the first quarter of fiscal year 2009 showed that, excluding exchange rate factors, Adidas Group's inventory value increased by 18% year-on-year in the first quarter. In euro terms, inventory value increased by 28% year-on-year, from 1.578 billion Euros in the same period last year to 2.016 billion. EUR.

Ma Gang, a sports product market researcher, told reporters: "Adidas has a large inventory in the Chinese market, and its roots lie in the implementation of the order management of the futures system. Adidas does not give the spot to the channel trader, but allows the channel operator to pre-order six months or one quarter in advance. After six months or one quarter, it will be shipped according to the order, which is similar to the futures.To encourage the channel dealers to make more orders, Adidas will give different rewards for the amount of the order.For example, the channel can be used to negotiate 20 million shipments. 50% off the price from Adidas to get the product; if you order 50 million, you can get the product with a discount rate of 4.8% or lower.The channel operator can reduce the overall cost, even if it can not sell so many products, in order to discount the discount Rate will also place more orders, resulting in oversupply and become inventory. Adidas is too optimistic about the Chinese sporting goods market."

Under the impact of the international financial crisis, the Chinese sporting goods market is not the "blessed land" that many products can digest. The annual research report of the global sports market announced by the American NPD Group recently stated that in 2008 China’s sales of sports equipment, clothing and footwear increased significantly by 15%, but in 2009, some retailers continued to sell merchandise inventories during the Olympic Games. The sporting goods industry faces severe challenges. Excluding exchange rate factors, Adidas Group's global sales fell by 6% in the first quarter of this year. Due to the weakness of the Chinese and Japanese markets, Asian sales also decreased by 6%.

There are also increasing liabilities that plague Adidas. On July 6, Adidas issued 500 million euros worth of bonds in the European market. Behind this move is Adidas’ rising debt and debt ratio. In the first quarter of this year, Adidas’ total liabilities amounted to 2.883 billion euros, a significant increase of 39% year-on-year, or 8.1 billion euros. The company’s debt ratio increased from 72.9% in the first quarter of 2008 to 81.8% in the first quarter of this year.

While adidas was busy with inventory and debt, its lucky star and veteran Robert Louis-Dreyfus passed away on July 4th, the chief executive of Adidas from 1993 to 2001. Led Adidas to list in Frankfurt and Paris in 1995, subsequently acquired a series of brands such as outdoor sports brand Salomon, expanded Adidas’ product line, accelerated the internationalization process of its brands, and rebuilt Adidas into an equal relationship with Nike. Global brand, staged nearly perfect "jedi fight back."

Although adidas once again fell into a trough, but this time in China, a substantial discount, there is also counter-attack means. Market observer Hu Baoming said: "Adidas like this international brand will reduce the discount rate to 15%, how many other domestic sports brand brands are still alive? In China, a gathering place for sporting goods in Fujian, now with annual sales of 300 million yuan It is difficult for companies to survive. Adidas can guarantee that cash flow will not be broken through discounts. At the same time, it will also exert strong pressure on competitors. A large number of SMEs will withdraw from the sporting goods market. This is a favorable aspect for Adidas.

Ma Gang said that in the sporting goods market in Chengdu, other sporting goods brands have started discounted wars in advance. New products that are not discounted at the moment are now hit 10% off on the market. In this round of discounted wars, there are still many unknowns for Adidas' success. factor.