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Adidas Teams Up With Wanda Group To Strengthen Commercial Position In China

Adidas has teamed up with Chinese conglomerate Wanda Group to strengthen its commercial position and help develop sports in the world's most populous country. As part of Tuesday's agreement, adidas will sponsor two of Wanda’s Ironman events in China and work with the property developer to help grow football and basketball at all levels. The German sportswear brand will also benefit from Wanda’s portfolio of shopping malls and other commercial properties as it plans to open large-scale stores in China. The deal is the "first of its kind" for adidas, a company spokesperson told SBD Global. Adidas already signed a three-year agreement with the Chinese Ministry of Education in '15 to develop sports, in particular football, within the country's schools. But Wanda's array of sports rights, sports sponsorship deals and commercial properties makes this a unique partnership, the spokesperson added. Adidas declined to disclose the length or any financial terms of the deal. Wanda, which is owned by China's richest man Wang Jianling, has been highly active across the sports sector for the past 18 months. The company bought a stake in La Liga side Atlético Madrid and acquired Swiss sports agency Infront Sports & Media, as well as the World Triathlon Corp., which owns the Ironman brand. In addition, it signed sponsorship deals with world governing bodies FIFA and FIBA. “China is one of the most important markets for adidas globally," said outgoing adidas CEO Herbert Hainer. China was adidas' fastest growing market in '15, with sales up 18% to €2.5B. China's push to become a football "superpower" by '50 fits right into adidas' strategy as the world's No. 1 football brand ahead of U.S. rival Nike. To further its position, adidas is looking to establish relationships with local Chinese teams. The company will also function as the sole sponsor of the Chinese Ironman events in Hefei and Xiamen later this year. Prior to the announcement of the deal, adidas opened its first global football store in the Chinese city of Guangzhou. Adidas brand ambassador David Beckham attended Monday's store opening. The new football store is part of adidas' plan to open 3,000 stores in China by '20.

CHINESE MARKET
: BLOOMBERG's Aaron Ricadela reported Chinese consumers with rising disposable income "are increasingly shifting from local sneaker brands to the cache" of adidas and Nike. That comes at a time when many consumer companies and apparel brands "are retrenching amid slower consumer spending and a government clampdown on excessive gift-giving by public employees that’s stung apparel and alcohol makers." Bryan Garnier & Co. analyst Cedric Rossi said, "Chinese people are becoming more health-conscious and participation rates in many sports are increasing." In addition to performance shoes, adidas’ fashion-oriented Originals and Neo brands "are resonating." Rossi: “They are fully benefiting from this athleisure trend." Euromonitor Int'l forecast that performance and sports-inspired shoe sales in China will grow from a combined $12.9B this year to $18.5B in '20 (BLOOMBERG, 6/28).

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