2017 set to be another strong year for Adidas in Korea
Korea’s largest sports brand aims to widen gap with competitors
By Lee Hyo-sik
It is rare these days for companies to aim for double-digit sales growth, given the prolonged consumption slump and other unfavourable business conditions here.
But Eddie Nixon, president and managing director of Adidas Korea, is certain that the German sports brand’s sales will increase by more than 10 per cent in 2017, as a record number of consumers purchase its innovative footwear, fitness outfits, streetwear and other products.
If realised, Korea’s largest sports brand will surely be able to further solidify its No. 1 position by widening the gap with Nike and other competitors.
In an interview with The Korea Times, Nixon, who took the company helm last July, said this year will be another profitable one for 400 Adidas Korea employees and its business partners.
“In 2017, we expect to grow by more than 10 per cent, primarily through the expansion of our running and training categories,” the British national said. “Another key category is our streetwear brand, Originals, which posted very strong growth last year by attracting more fashion-savvy young consumers. Our kids’ category also grew rapidly. We expect the same again this year.”
Adidas Korea posted 15 per cent sales growth last year, according to Nixon, who said he is pleased with the firm’s performance given the economic headwinds.
“It wasn’t easy to earn 15 per cent more last year under tough market conditions,” he said. “But we pulled it off. Our mission is to become the best sports brand in the world. We will continue to do what’s necessary to achieve our goals.”
Founded in 1997, Adidas Korea operates 796 shops across the country, most of which are franchised. The company directly employs about 400 workers. It also runs 244 Reebok stores after Adidas acquired the brand in 2006.
Solidifying market leadership
The sportswear and equipment market here is expected to be more competitive as Under Armour and other brands make inroads into Korea. But Nixon welcomes competition because it gives Adidas a chance to shine and stand out from the others.
“The growing competition allows us to show how different we are from other companies,” he said. “We have been the No. 1 sports brand since we took market leadership in 2013. We will continue to hold onto it. Adidas is obsessed with consumers. We put our consumers at the heart of everything we do and this consumer-first attitude and mindset is definitely the key factor that will strengthen our presence in Korea. We will produce and deliver goods based on consumer needs and collaborate more with our business partners.”
Korea is Adidas’ sixth-largest market globally, the CEO said.
“Korea is a highly important market for Adidas because it has a much more active sports and fitness population compared to other Asian countries,” Nixon said. “The country’s growing cultural influence over other Asian nations through dramas, music and fashion gives us another reason to focus more on the Korean market.”
Three key corporate values
Adidas Korea has created a corporate culture that promotes the “3Cs”: creativity, confidence and collaboration, the CEO said, adding that company offices are designed to encourage staff to work in line with those values.
“At Adidas Korea, we look to create an environment that allows our staff to live and work with confidence, creatively and collaboratively,” he said. “We have a pretty talented team that produces output. Employees cannot work alone and they have to work together to maximise their potential. They are also encouraged to take risks and perform their duties confidently, because it is okay to fail at Adidas. They need to be creative, too, to satisfy increasingly demanding consumers out there.”
Nixon also shared his personal values, saying he wants to make the company a better place.
“I have five important values in my life: family, the sense of fun, achievement, inspiration and integrity,” he said. “Of course, the family is very important for all of us. We spend lots of time in the office, so I would like fun to be part of the office. People have to be performance-driven and focus on raising bars constantly. I would also like to be inspired by others and, hopefully, I can inspire my team to make things better. Integrity is very important because we cannot build anything without it.”
Nixon said he will bring positive changes to Adidas Korea, making it a better place for everyone.
“While I am here, I also hope to create additional value for consumers,” he said. “I will ensure that all our employees across our 1,040 stores nationwide communicate better with consumers. By the time I leave, I would like to be remembered as a British man who delivered promises with a sense of humour.”
Marketing blitz ahead of FIFA U-20 World Cup
Korea’s hosting of the FIFA U-20 World Cup in May will present a good opportunity for Adidas Korea to reignite Koreans’ enthusiasm for football, Nixon said.
“Football is a key part of adidas’ DNA, and in Korea we have enjoyed a long partnership with the K-league,” he said. “The FIFA U-20 World Cup is undoubtedly a huge event, so we are preparing various marketing activities as Adidas is sponsoring key Korean players such as Lee Seung-woo, Baek Seung-ho and Jang Kyul. We expect the tournament will create a great atmosphere and be a hugely memorable event for Korean football fans.”
The company also wants to capitalise on the 2018 PyeongChang Winter Olympics, he said, adding that Adidas will do its part in making the big sporting event successful.
“We have been sponsoring Korea’s national bobsleigh and skeleton team since 2012. Even though the sports are not so popular here, we believe our support will enable the team, which has won numerous international competitions, to earn medals at the 2018 Winter Olympics,” the CEO said.
Giving more back to community
Nixon said giving back to local communities is also in Adidas’ DNA, stressing it will continue to expand corporate social responsibility (CSR) programs.
“For many years, Adidas Korea has been actively engaged in various CSR activities to empower the underprivileged,” the CEO said. “In 2013, we launched the Adidas miDream FC to offer football training sessions to students from poor families. Over 130 children participated in 2016, and in 2017 the program will expand by engaging more children and employees.”
In 2011, the company created Adidas miRun Busan, a marathon which raises funds to support young runners from poor families in Korea’s second-largest city.
Reebok built a children’s success program in 2012, a nationwide before-class program that aims to enhance the academic performance and overall health of children through physical activity.