Opportunities for Growing Global Footwear Market

Opportunity to catch the global market

In this past few years, we can notice that sport shoe market is growing fast from day to day. Rising of health conscious among the consumers is one of the significant factor for the growth of sport shoe market. According to Statista, the sport shoe market is expected to grow annually at a CAGR of 9.0 percent in the two years period from 2019 until 2021. Apart from that, the worldwide revenue in this market is also expected to increase from US 47 billion dollars to US 68 billion dollars by 2021.

(Footwear Report 2018-Athletic Footwear, 2018) This is a major opportunity for Adidas to explore itself globally and catch the global markets. Strategy such as market development can be carried out to help Adidas to increase sales and revenues. Adidas should continue to expand the emerging markets because of the positive growth in this market. According to Euromonitor, Adidas improved from 8.5 percent to 13.8 percent of market share in China, compared to 11.

Get quality help now

RhizMan

Verified writer

Proficient in: Economics

4.9 (247)

“ Rhizman is absolutely amazing at what he does . I highly recommend him if you need an assignment done ”

+84 relevant experts are online

Hire writer

2 percent to 14.3 percent for Nike, from 2011 until 2015. Also, Adidas sales in China increased by 27 percent in 2018. (Shevlin, 2018) Although Adidas is doing well in China, but it must also focus on India and other emerging markets for sharper growth. For example, establishing more retail outlets in these countries to assist Adidas to grab more revenues. Due to the rising of demand in sport shoe market, Adidas can also try to enter the new markets in the future. This is because normally developed economies are already having high competition.

Product and design innovation

Moreover, product and design innovation can be another opportunity for Adidas to grow in the coming future.

In this day and age, sport shoe demand is not just for the athletic use, but also becomes more popular in the athleisure. This means that apart from use in sports, the products are expected to be stylish and good looking. The demand for athleisure wears is growing and this is the fastest growing category in the sport shoe market. For example, we can notice that more and more people are wearing sport shoes or sport clothing even though they are not going for workouts. So, Adidas should consider the changing demand patterns and try to come out with more innovative products that can support the sports fashion or sports leisure trends. Apart from changing the products pattern to athleisure style, Adidas can also focus on the innovation in sole technology. It makes no mistake that creating products with advanced technologies can help to improve the overall experience of the consumers.

Nowadays, some shoes are produced with built-in sensors to track the speed, distance covered and calories burned. For example, Puma's RS series allows users to connect their shoes to an Apple II and upload distances they ran and calories burnt. (Top 3 Trends Impacting the Athletic Footwear Market in the 2020, 2016) As a result, Adidas can focus on innovation of design and products to attract and retain customers, making such products can result in higher sales and revenues. Digital Marketing OpportunitiesIn this modern day, technology is becoming very important and essential to all of the industries around the world, including sport shoe industry. The presence of advanced technology has brought many opportunities to the marketers. It enables the companies to build more direct relationships with its customers and increase the loyalty of the customers. So, Adidas must utilise the available technologies for better marketing to attract more customers. Besides that, the digital marketing can be seamless and immediate. For instance, by using the company websites, customers are only a few clicks away from completing a purchase online. It is very easy and convenient because people no need to make a phone call or go to the shop to purchase the products. As a result, customer experience will be improved with the help of digital technology.

According to Retail News Asia, Adidas booked a 57 percent increase in e-commerce sales in 2017. (Asia, 2018) Also, the shopping app which was published in 2017 received more than 600,000 downloads in less than two months. This means that Adidas has the potential to grow by using digital marketing. By 2020, the demographic of Generation Z will make up 40 percent of the world's population. (Gilliland, 2017) Generation Z is the generation that has truly grown up in a purely technology-driven world. So, Adidas must grab the opportunity to connect with them by using digital marketing.

Threats

Heavy competition

Sport shoe industry is seeing very fast growth nowadays. We can notice that the competition in sport shoe industry is also growing intense from day to day. This means that Adidas has more chances to face with its competitors including the older competitors or the newer one. For example, Nike, Under Armour, New Balance, Fila, Puma, Skechers, Converse, Bata, Liberty Shoes and so on. However, the top competitor for Adidas is always Nike, the market leader in this industry. According to Owler, Nike gained 38.1B dollars revenue in 2018, which is more than Adidas for about 8.1 billion dollars. (Adidas's Competitors, Revenue, 2018)

In fact, all of these brands will always compete with Adidas on product designs, price, advertising, brand image, web site, innovation of products, and also celebrity endorsements. Moreover, competition from online stores who do their business through e-commerce only will also affect Adidas. This type of online stores will always sell their products with the lowest price because of their low cost manufacturing strategy. People who are more price-sensitive may choose to purchase these type of products. For general, it made no mistakes that high level of competition in a market place could bring troubles to the competing companies. When Adidas wants to compete with its competitors in the market place, Adidas surely will encounter with more problems including the financial problem such as the higher marketing and operational costs. This situation can become more serious when it influence the market share and market position of Adidas in this industry. So the company should continuously thinking of the long-term strategies which can help to beat the competitors to maintain highly regard reputation in the market place.

Instability of Global Economy

Economy is very vital for the success and growth of any business in the world. This is because the stunted economic growth can bring many negative impacts to all of the businesses. The instability of economy will decrease the employment rate as well as reduce the purchasing power of the consumer. Inflation of goods and services will cause the prices of certain goods to become higher, and as a result reducing the buying power of the consumers. People are less likely to buy something, especially the expensive branded products when there is an economic fluctuation. As a result, it will cause lower sales and profits of a particular company in the market, including Adidas. The instability of the economy has become a threat to many companies and can even influenced their major decisions. Also, the continuing economic fluctuations in several markets can cause a serious effect on the profits of a particular brand such as loss of money or bankruptcy. This is also a reason that Adidas had shifted its marketing focus towards the metropolitan cities which including London, Los Angeles, New York, Paris, Shanghai and Tokyo.