Adidas eyes double-digit growth in China as it deepens reach in lower tier cities

Adidas said it expects double-digit growth in China this year as the German sportswear giant continues to expand in its fastest growing market while deepening reach among young consumers in lower tier mainland cities.

Most brands, including multinational and Chinese ones, are increasingly looking at driving growth by tapping the potential of smaller mainland cities, avoiding the clutter and competition seen in top-tier markets, market watchers said.

Adidas has increased its forecast of global sales and earning until 2020, driven by factors including “continuing rapid growth in China”, which stands out as the firm’s most profitable and second largest market in the world, chief executive Kasper Rorsted said on Thursday in Shanghai.

Through till 2020 annual global sales are expected to grow at between 10 per cent and 12 per cent on average, from a previous “high single-digit growth”, while net income from continuing operations is projected to see growth of 20 per cent to 22 per cent, up from 15 per cent previously.

The company is expecting double-digit growth in China this year, driven by the country’s economic growth and an under penetrated sports market, he added.

In 2016, Adidas sales in mainland China, Hong Kong and Taiwan grew 28 per cent year on year to €3 billion (US$3.2 billion), on a currency-neutral basis.