Adidas’ Localization Efforts Are Paying Off, Analyst Says

by · WWD
An Adidas Samba, one example of the terrace sneaker culture.Courtesy

Adidas is looking at localization for growth.

The German sports brand held an Innovation Day on Thursday, and a local-for-local market approach, where 90 percent of the sourcing is done locally, appears to be the key to unlocking growth potential.

HSBC global sporting goods analyst Anne-Laure Bismuth said in a research note that the brand’s localization efforts “have paid off, especially in China, which remains a strong growth engine of the Adidas brand.”

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Bismuth also concluded that the local-for-local market approach provides agility, flexibility and brand awareness. It also means that each regional team is responsible for giving consumers a localized version of the Adidas brand, while staying true to its roots. In the U.S., for example, Adidas is localizing through athletes and teams.

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“Overall, the ambition for [Adidas] is to be the number one brand in terms of market share in all markets,” the analyst said, noting that the company “has already achieved this in some markets.”

Another takeaway from Innovation Day is that the newness is not just regional, but also involves broad-based innovation across categories.

“Innovation remains strong and healthy in lifestyle apparel and footwear. In lifestyle, there have been some concerns regarding a fading of the terrace trends,” she said, noting that it appears that terrace can continue to attract new and old customers alike.”

In football, brand ambassadors Trinity Rodman, Lamine Yamal, and Jude Bellingham have loyal fanbases that are proving “sticky” with customers, Bismuth noted, adding that in basketball, the brand is looking to improve its trajectory through young talent. And in the training category, the latest shoe releases including Dropset 4 and Adizero Dropset Pro appear to attract a new cohort based of Hyrox and hybrid training enthusiasts.

Bismuth also noted that Adidas has embraced AI, which is becoming embedded throughout the business, “whether through talking to customers for freeing up employee time or through a customer’s search experience.”

She expects that the earnings growth outlook for Adidas for 2027 to 2028 will be supported “by a strong product pipeline.”

“After building a healthier company, the group is now aiming to build on its strength and become a successful company in 2027-28,” the HSBC analyst concluded. “While the macro environment is not easy with multiple headwinds impacting the broader consumer space, management is building for the medium to long term, developing innovative products, especially through close collaboration with athletes.”

Bismuth has a “Buy” rating on shares of Adidas.