Adidas ousts China chief as sales suffer after consumer boycott on Xinjiang


Adidas has rattled the top management of its China business after the sportswear giant lost market share to domestic brands that came in following a consumer boycott over its stance on Xinjiang cotton.

The German sportswear group has replaced Jason Thomas, head of its Greater China operations, the company told the Financial Times. The move follows a decline in sales in the region of around 15% for two consecutive quarters last year.

Thomas’ departure comes a year after Adidas was embroiled in a violent consumer backlash against Western brands that shunned Xinjiang cotton on human rights grounds. Adrian Siu, who previously served as the company’s Hong Kong chief, will take over from Thomas in April. Siu joins the world’s second-largest sportswear brand after two years as general manager of Chinese underwear group Cosmo Lady.

The management reshuffle comes as Adidas and other overseas brands struggle to balance the companies’ commitment to respecting human rights with an ambition to increase sales in China, which , according to McKinsey research, overtook the United States to become the world’s biggest fashion consumer in 2019.

Alongside Nike and fashion retailer H&M, Adidas was hit by a Chinese boycott from last year after Western companies sought to distance themselves from ‘forced labour’ in Xinjiang, the western province home to the Muslim Uyghur minority, which supplies more than 80 percent of Chinese cotton.

Adidas said it never made goods in Xinjiang and has no suppliers in the province. He pointed to a statement from 2019, in which the company said it had “explicitly instructed our fabric suppliers not to source any yarns from the Xinjiang region” after learning of allegations of forced labor there. low.

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As consumers ditched Western brands, local Chinese sportswear groups Anta Sports and Li-Ning capitalized on the shift in sentiment by announcing they would continue to use Xinjiang cotton.

Anta’s revenue rose more than 50% in the first half of 2021 to Rmb22.8 billion ($3.6 billion) as it captured a larger chunk of China’s booming sportswear market. sport. Greater China revenue at Adidas was €2.4 billion for the same period.

Allison Malmsten, a sportswear analyst at Daxue Consulting, a China-focused consultancy, said that since the boycott, Nike and Adidas have ceded their leading positions on e-commerce apps such as Alibaba’s Tmall. In their place, local online retailers promoted Li-Ning and Anta, making the “competition much tougher”.

Jonathan Cummings, Asia-Pacific president of brand consultancy Landor and Fitch, said that after years of market dominance, Adidas and Nike faced competition from “cheaper national brands that have become stronger”.

Adidas made nearly a quarter of its sales in the Greater China region in the first half of last year, the bulk of which came from mainland China.

Thomas, who worked at Adidas for nearly two decades, will join Adidas in Dubai, as Senior Vice President of Global Franchising.

The executive overhaul is part of a broad overhaul of its operations in China, long its most important growth market. Adidas recently announced plans to increase the number of specialty products for the Chinese market and intensify local marketing.

Chief Executive Kasper Rorsted said in November that the key to fighting the boycott was to “show consumers our appreciation and respect, earn their loyalty and complement the strength of our global brand with a strong local angle and understanding. “.

“Adidas still has a strong brand reputation in China,” Cummings said, adding that sales could “bounce back if it focuses on what the Chinese consumer wants.”


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