Nike, Adidas resume production in China despite drop in sales

By Yin Yeping Source:Global Times Published: 2020/3/10 20:08:40

A pedestrian passes by a Nike store in Beijing. Photo: cnsphoto

Businesses have gradually resumed as the coronavirus outbreak is easing across the country. However, to international sports brands like Nike and Adidas, the impact persists and analysts believe sales will not return to normalcy before May or even June.

The impact of the outbreak on sportswear sector is considerable. Despite the business resumption, residents' outdoor activities are curtailed, with many sports events suspended and sports venues closed, leading to the loss of the atmosphere for sportswear consumption, industry analysts say.

Such effects are reflected on frontline sales. One staff member of a specialty store in the Solana shopping area in Beijing said that despite the store being open, there are only four to five customers a day.

They began to offer discounts about a month ago. 

"We seldom offered discounts before and now we offer discounts of 15-40 percent," she said.

Meanwhile, because of the outbreak, some new products cannot be delivered to the store, she said, adding that customers are now encouraged to order online just in case the products they want are not available in the store.

The Global Times saw on Tuesday that some sports stores in Beijing including Nike and Adidas are promoting online purchasing platforms in a bid to boost their poor sales in stores.

He Wenyi, executive director of Peking University's China Institute for Sports Value, told the Global Times on Tuesday that the sports industry is based on sentiment, and when people are voluntarily confined indoors amid the outbreak, it will have an impact on consumption.

"In the first quarter, sales of Nike's sporting goods in brick-and-mortar stores are to fall by at least 50 percent," he said, adding the trend might be a driver to international sports brands to grab more business online.

As the outbreak is being gradually contained in China, He predicted that sports consumption will have a recovery by May or June.

As the resumption is taking place, the industry is expecting a revival. According to a report by Sky Sports, as the coronavirus continues to spread, the European Cup would be postponed until September or, at worst, next year. However, some Chinese manufacturers are ready to supply products for the European championship, which is scheduled for the end of March.

An employee with Dongguan Baocheng Shoes plant, a major supplier for Adidas, told the Global Times on Tuesday that the plant almost resumed full-capacity production starting on February 17.

Despite some difficulties in staff arrangements such as regular disinfection, limited access and changed work shifts because of the work involved in prevention and control of the epidemic, the plant runs at full capacity.

"Because we are one month behind schedule, we are catching up on production to meet orders for February and expecting to do the orders for March in April," she said, noting that the amount of orders has not been reduced and they are making shoes for the European Cup, which should be ready for shipment this month.


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