Adidas' managing director in China has outlined the country's enormous opportunity and unique challenges that marketers can't afford to ignore.
“We have scarcely begun to contemplate the full implications of China's rise,” Colin Currie told the Global Marketer Conference in Sydney yesterday. “The whole world will change in our generation. China's empty-nesters of today will have huge wealth in the future. We had better start preparing for this silver consumer segment.”
Cashing in on the fast-growing market, currently the second-largest economy in the world, Adidas opened 1,000 stores in China in 2012, 700 in 2013 and will open another 700 this year.
Currie outlined predictions that, within two years, China will have about 600 cities with 100,000 or more affluent consumers. Predictions are for China to double its income per capita by 2020, by which time it will be the world's largest economy. And by 2025, China will have the equivalent of 10 New York cities of today
The online opportunity is also one for marketers not to miss, Currie said. “China will become the world's largest ecommerce market in the next year or so,” he said. “Internet sales will reach US$213 billion next year.”
But China is like no other market and poses unusual marketing challenges.
“The clearest way to express our understanding of China is to say it's one country in two worlds,” said Currie. “It feels like a country pulling in two different directions. It's looking forward to the future but is weighed down by its past and present.
“The one child generation is taking to the stage and Chinese people have never been so proud of their country. With the changes come consumers who want to create their own identities and be different.”
Success for brands, Currie believes, lies in understanding the Chinese consumers and understanding China's geography.
“Brands need to consider geography, consider the city and determine the right distribution channel,” he said. “The footprint strategy will be key to success. We are investing a lot in mapping economic, social and growth trends.”
He continued: “There are 60 home grown sportswear brands in China. To compete, we believe it's all about understanding the consumer.”
As such, Adidas has three sub-brands to reach all levels of consumers: Neo is mid-price point aimed at over 20s, Originals is more premium fashion aimed at a slightly older consumer with disposable income, and Sport is aimed across levels at anyone who plays sport.
He added: “There is so much competition in China. A lot of companies are copying and making like-minded products. To differentiate, it's about brand experience. What is your brand proposition versus the competition?”
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