default-output-block.skip-main
BoF Logo

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

With Reebok Expansion, Adidas Challenges Nike in China

Reebok plans to open 500 stores in China, an aggressive strategy to tap the country’s fast-growing fitness economy. Will it help parent company Adidas edge ahead of Nike?
Reebok Ad Campaign | Source: Courtesy
By
  • Limei Hoang,
  • Tamison O'Connor

LONDON, United Kingdom — On Thursday, Reebok announced plans to open 500 stores in China over the next three years. The move is part of parent company Adidas' wider ambitions to position itself as the country's leading fitness company in a bid to steal market share from incumbent leader Nike.

The deal will see Reebok partner withBelle International Holdings, one of China’s largest footwear retailers, who will oversee the rollout of its FitHub concept stores — seven of which have already opened in China over the past few months in Beijing, Wuhan and Qingdao. A further 50 stores are expected to open this year.

With the sportswear and fitness market in China rapidly expanding, it’s a golden opportunity that many global brands are keen to cash in on. Indeed, for Adidas and Nike who have long been established in the market, China now represents the second-largest market in their businesses, second only to the US.

And this opportunity only looks set to grow. Activewear brands are benefiting from a cultural shift as China opens up to fitness. Sports participation in the country is rising fast thanks to a government initiative encouraging citizens to work out. Gym and health club revenue in China has nearly doubled over the past five years; Shanghai alone is now home to over 1,000 gyms.

I don't know that Reebok is going to significantly help Adidas in unseating Nike.

In addition to the government initiatives, China is also seeing a growing interest in professional sports, increased appreciation for fitness and wellbeing, and a move towards athleisure as a fashion trend.

"Chinese consumers are more in tune with trends set by influencers like Kendall Jenner or Gigi Hadid and want to be a part of that, so there's an aspirational as well as a health element to that,"says Brian Buchwald, co-founder and chief executive officer of consumer intelligence firm Bomoda.

“Also, as activewear has become more and more a part of fashion. Chinese consumers who appreciate fashion have also become more and more a part of the activewear and wellness industries,” he adds.

Combined, Nike and Adidas also account for about a third of China’s sportswear sales. Last year Adidas saw its revenues in Greater China grow by 28 percent, on a like-for-like basis, to €3 billion ($3.2 billion) while Nike reported in its third quarter, footwear and apparel segments in China rose 14 and 22 percent respectively.

In 2016, China’s sportswear market was estimated to be worth $28.4 billion, according to data from Euromonitor, and is expected to grow to $41 billion by 2021 at a compounded average growth rate of 7.6 percent.

But can Reebok’s aggressive expansion help Adidas move ahead of Nike in China?

“It’s always a little dangerous to dive in headfirst,” notes Buchwald. “For Reebok, as a challenger brand, it’s going to take them a long time to break into the top tier.”

“One of the lessons we certainly learned in the last couple of years is opening up retail, especially in China, doesn’t necessarily drive revenue growth,” he continued. “So they’re going to have to be very careful [to ensure] they are able to drive the demand along with that supply, and I’d say right now, you have the incumbents like Nike, Adidas and [domestic sportswear brand] Anta, they’re going to be very difficult to dislodge at this point… I don’t know that Reebok is going to significantly help Adidas in unseating Nike.”

Related Articles

In This Article

© 2021 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
CONNECT WITH US ON
The State of Fashion: Technology
© 2022 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions and Privacy policy.
The State of Fashion: Technology