Adidas Korea separates its marketing strategy from APAC

Sportswear giant adidas AG started operating its South Korean affiliate as a separate market from the Asia-Pacific region on Jan. 2 to quickly respond to consumers' needs in the country where it is losing market share to global peers like Nike Inc. and New Balance Athletics Inc.

Adidas Korea LLC said on Tuesday that its business will be managed separately from the APAC market, which encompasses Southeast Asia, Australia and New Zealand, effective from the day.

The Korean market will launch items with greater focus on local demand, whereas it previously provided products for a broader range of customers in the APAC region, the Korean affiliate said.

The athletic apparel giant sees the growing importance of the Korean market and is planning to expand the local move to a global one, the company said.  

Adidas Korea will launch Originals products to ride on last year’s Samba shoes craze, as well as its Performance collection for sports enthusiasts.

Although adidas Korea doesn’t disclose its earnings, industry insiders estimate its revenue was between 700 billion-800 billion won ($536.8 million-$613.5 million) in 2022, similar to New Balance’s and half of Nike’s 1.67 trillion won in the same market.

Meanwhile, adidas Korea has been facing conflicts with local franchisees since early 2022 as it announced widespread contract termination plans.

The Korean affiliate said it will renew partnerships with 19 out of around 100 local franchisees for distribution efficiency and to improve customer experience. The franchisees with unrenewed contracts will have to close their adidas stores by June 2025.

The association of adidas Korea franchisees called for the withdrawal of the company’s decision at its parliamentary audit in Korea’s National Assembly last October.

Adidas Korea Chief Executive Peter Kwak responded at the time that the company has been losing market share for six years and will implement a restructuring plan while considering the situation of franchisees.

Write to Ji-Yoon Yang at yang@hankyung.com

Jihyun Kim edited this article.