Southeast Asia Will Be the Target of Adidas for Its Cheap Labor Costs

The latest news revealed that Adidas, which ranks the second in sporting goods companies in global market would close its only factory in Suzhou in domestic market. And Adidas official admitted that was true to reporters, but it stressed Adidas in China still has more than 300 cooperation on behalf of business, to shut down the company is out of the consideration of integration of the global resources, which will not bring bad effects on the production.Nevertheless, business market is still inevitable to associate this action with the phenomenon that domestic manufacturing labor costs rises sharply, recruitment is difficult. But it is not accidental, it's more like a trend. When the global economic crisis broke out three years ago, Nike shut down its last factory in China so as to deduce resources unavailable in China. Comparing Nike and Adidas to "migratory birds", now that there have been no longer lush trees, no fertile land, nothing can impede them. Nevertheless, for those who pay attention to the transformation and upgrading of domestic intensive manufacturing industry, China could attract these "migratory birds" due to its advantage in cheap labor, but this kind of situation will gradually change as the improvement of national economy and people's living standard.According to the reply of Adidas headquarters, "To close the factory is for the re-integration of global resources". This is the only reason. And as Xinhua reported, Suzhou Industrial Park Administrative Committee, said in a material to the media that it completely understood Adidas's plan of global resources re-integration, which also agrees with the trend that Suzhou Industrial Park Administrative Committee requires transformation at present.Notably, the "integration strategy" Adidas referred to also appeared in Nike's official statement in China. Nike once announced the closure of the only footwear production facility owned by it in March 2009: Taicang factory when Nike claimed in the interview of South reporters that its purpose was to promote the long-term purchasing conformity strategy and streamline supply chain at a further step.In fact, Adidas did not deny the correspondence between shutting down the factory and the rising costs, and it seems that there doesn't exist any conflict between "global resource integration" and "rising costs". Recalling the long-term history of sporting goods manufacturing industry, Adidas, Nike and other multinational sports clothing brands has been always choosing the way "Where the cost is low, there is the wayIn the earliest time, their producing bases were in the birthplace of brands - European America. For example, for cost savings, Nike built its first overseas producing lines in Japan. After several years, Japanese yen continued to appreciate, and the labor costs were also soaring, which pushed the cost of Nike in Japan was higher and higher. In 1975, Nike transferred its producing lines in Japan to Korea and Taiwan where the labor costs were relatively low, and then in the 1980s, the producing lines were transferred to Fujian and Guangdong for the same reason. And in recent years, as China's labor costs rise, it took aim at Southeast Asia where the labor costs are cheaper.Independent analysts Liao Jierong believed that from the transaction structure of stakeholders, for Adidas and Nike, this kind of "rolling stone" is normal.However, they are faced with the pressure from consumption market. "Particularly for Adidas, which should be the "fuses" of London Olympics as the first class sponsor, but surprisingly, the reaction of consumers has been under the bottom, it is difficult to start shooting reckon without one's host." Normal 0 7.8 Å 0 2 false false false MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:nh<; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman"; mso-fareast-font-family:"Times New Roman"; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;}

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