Adidas Guns For APAC Markets: Sponsorship Grows Too

China was once again the sportswear brand’s best performing market in Asia – reporting a 26% increase year-on-year – contributing to an overall 17% increase in net profit to US$650m.

The Q1 results mark the first financial reporting since Adidas integrated its key markets of Greater China, Japan, South Korea and Southeast Asia-Pacific into one operating market Asia-Pacific.

Colin Currie, managing director of Adidas Asia-Pacific and Greater China, said the results reflected the company’s ongoing “energy and momentum”.

“With combined currency-neutral Asia-Pacific growth in Q1 of 15%, we are well-positioned to double-down on executing our ‘Creating the New’ strategy aimed at transforming Adidas to be the best sports brand in the world. Entering the third year of this five-year strategy, the new Asia-Pacific setup will enable us to further drive our brand aspiration and provide the best brand experience to consumers in this fast-growing market.”

Adidas reported a 10% increase in currency-neutral revenues with sales equally US$6.59b. E-commerce continues to be the company’s fastest-growing channel with an increase of 27% year-on-year. While the growth was driven by double-digit increases in the running, football and training categories for brand Adidas as well as increases at Adidas Originals.

Adidas CEO Kasper Rorsted said in a statement: “We had a successful start to the year that was fully in line with our expectations: Our high-quality top-line growth was driven by our strategic focus areas North America, Greater China and e-commerce. At the same time, we managed to grow the bottom line significantly faster than the top line while continuing to invest into creating brand desire.”

According to the ASN Index, Adidas has enjoyed a brisk Q218 spending US$14.43m, slightly above its 3-year quarterly average of US$13.75m—clearly indicating the brand’s sustained interest in the Asian sponsorship landscape. It has made some key renewals in the last quarter, namely:

• Shanghai Half Marathon
• Angelababy (Chinese celebrity endorsement)
• Albirex Niigata FC

…with some reasonably large (US$500k-1m) new deals in Q4-17 to add weight to their brand presence:

• Hockey World League Final
• China Volleyball League

But these are spend levels which are poised for growth in the next few years as Asia plays host to major international tournaments such as 2019 Rugby World Cup in Japan, Tokyo 2020 Summer Olympics and the Beijing 2022 Winter Olympics – which will accelerate secondary deals with teams, individuals and more.