Globally renowned sportswear company Adidas is looking to focus on e-commerce sales and sustainability. Included in the company’s five-year plans are doubling online sales and produce more sustainable products.
Adidas up in the competition to rival Nike and Puma
The COVID-19 pandemic has plummeted a lot of sporting goods industries’ offline sales, and Adidas is not an exception. However, Adidas still managed to record quite hefty sales from the public’s sudden interest in running, hiking and yoga. Accordingly, the sales of the aforementioned sports equipment also boosted the company’s online sales over the past year.
Reuters reported that Adidas’ net income is forecasted to grow into 1.25-1.45 billion euros in 2021. A higher figure compared to the 429 million euros in 2020, but down from 1.9 billion euros recorded in 2019.
With the expected number, Adidas is looking to boost its online sales. By 2025, Adidas aims record to around 9 billion euros ($10.7 billion) a year. Along with it, Adidas hopes for a 12-14% operating profit margin. For comparison, the Germany based sportswear company achieved 11.3% in 2019, before the coronavirus crisis knocked down the company.
Accordingly, Reuters also noted that Adidas shares hit the highest gain on the German blue-chip index by 1250 GMT with a 3.2% jump.
To achieve the goals, Adidas will account e-commerce for over 40% of the industry’s sales by 2025. Following the end of the coronavirus lockdowns, Adidas is also slowly opening its offline stores. Adidas expects to note a sales growth of up to 30% in greater China, the rest of Asia and Latin America, especially in the mid-to-high teens’ products.
To compete with long-time rivals such as Puma and Nike, Adidas plans to focus on the woman’s market. Additionally, Adidas is hoping for a worthwhile result from its partnership with Peloton. Peloton itself has also recorded quite a hefty jump in subscribers due to the increasing demand for workout programmes on exercise bikes.
Aiming for sustainability, Adidas to use alternative materials
The company will also lunch more sports-inspired lifestyle products to add its existing performance and Original fashion collection. Additionally, Adidas targets to produce more environment-friendly products in the future. Thus, by 2025, Adidas aims to create nine out of 10 products out of recycled and biodegradable materials. Upon the sustainable products development, Adidas will be experimenting with mushroom-based leather as a substitute. The decision was made after CEO Kasper Rorsted pointed out how 70% of consumers care about sustainability in making their purchases.
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