Adidas to shift IT operations from Hong Kong to Shanghai

PUBLISHED : Friday, 17 November, 2017, 9:54am
UPDATED : Friday, 17 November, 2017, 11:00pm

German sportswear giant Adidas is planning to relocate its information technology operations from Hong Kong to Shanghai as part of a strategy to bolster its business on the mainland.

A senior executive with the company, familiar with the plan, said Stefan Lenz, a vice-president of IT infrastructure, has flown to Hong Kong and is due to inform local staff of the decision at 10am on Friday.

The relocation is expected to cause some job losses in Hong Kong.

By moving the Hong Kong-based IT division to the mainland’s commercial capital, Adidas is following its strategic business plan, called “Asia One”, which aims to drive further business growth in the region by centralising all key resources at its regional headquarters in Shanghai.

Currently Adidas has two offices in Hong Kong. One serves as the local headquarters and the other provides sourcing services to the region.

The company said earlier this year that it expected double-digit growth in China in 2017 as it deepens its reach among young consumers in lower-tier mainland cities.

In 2016, Adidas’ sales in mainland China, Hong Kong and Taiwan combined grew 28 per cent year on year to 3 billion (US$3.6 billion) on a currency-neutral basis.

China stands out as the firm’s most profitable, and second-largest, market in the world according to chief executive Kasper Rorsted.

China’s entire clothing industry is benefiting from the central government’s promotion of sports and a healthy lifestyle.

Adidas currently has 10,000 stores in China and plans to have 12,000 stores in place by 2020.

The mainland’s retail landscape is changing dramatically as the booming e-commerce sector penetrates into people’s daily life. Alibaba, owner of the South China Morning Post, reported sales of 168.2 billion yuan (US$25.4 billion) during the Singles’ Day shopping festival on November 11, a jump of 39.4 per cent from a year ago.