Tactics of Adidas Transformation

In July the big sports dress company Adidas launched that the affiliated factory parted away from China continent. According to the reports, there are 10 foundry firms for Adidas obtained the message of breaking up the partnership. According to a press survey, the OEM business in Hunan working for Adidas are nearly 10, but they do not receive a notice of termination. But to a certain extent, the orders of contract with Adidas caused a trace of anxiety for the foundry factory in Hunan.
In recent years, the province shoe enterprise has got the rapid development through undertaking foreign footwear and processing. The big sports suit enterprise Adidas made the division to shut down its only affiliated factory in China and the news have something to do with Hunan more or less.
It is said that by the reporter investigation, at present the number of enterprise in Hunan which do the foundry work for Adidas has reached nearly ten. Orders from the brand are reducing and they did achieve not the desired effect in the first half year. The principle of Hengyang RongYang shoe industry limited company told the reporters those. RongYang Shoes is a sub company of the Prudential Group and the percentage of the Adidas brands reach about 90%. The person in charge of Rong Yang Shoes said that since last year, orders from Adidas were significantly reducing.
Along with the progress of industrial transfer in the past few years, except for Adidas, Nike, puma and other brand also started placing the order to Hunan. It also has caused the tension of the OEM companies because of Adidas sending the contracts to others.
There is such a rule that the OEM company move to the Central Inland, mainly to get rid of the disadvantages of the labor shortage and increasing expenses in the Pearl River Delta and Yangtze River Delta. Besides, the main value is that there are superiority such as a high-speed rail, the labor cost And the most frequently mentioned reason is that there are advantages in wages and salaries of the staff.
However, a set of data show that the artificial cost advantages is weakening gradually. However, situation of transferring into the mainland is not as good as expected. At present, the labor cost is only a little shy with coastal arears, low-not a lot of. Secondly, costs of transporting to mainland also increased compare with coastal region. In addition, after the company moving to the mainland, the employees are basically local and therefore the management is not as convenience as before.
As is analyzed by the personage inside course, in present expense and high quality commodities of Nike, Adidas, etc are distributed in mainland of China while the secondary standard orders are slowly being transferred to Indonesia, Vietnam and other Southeast Asian countries. At least five to 10 years, these high-end international brand will not leave these high-end complete evacuation orders from mainland China. Therefore Chinese mainland foundry corporations should catch up this opportunity to lock the upscale market as well as to make the transformation and upgrading.