Lost in translation. How strategy helps adidas thrive in China.
Updated: 1 hour ago
Why some Western sportswear brands are struggling in China
Lululemon released its latest earnings report on 3 September and flagged China as a problem in a very bad quarter. It wasn't alone: Nike and Under Armour told a similar story.
Lululemon cut its full-year revenue forecast and its share price fell about 18%. China was the shock. Comparable sales there (sales in stores open a year or more) were up 13% in Q1, then down 8% in Q2, with currency fluctuations stripped out in both. In June, management still expected China to grow about 20% this year. It now says high single digits. The trigger looks like a Great Wall anniversary event in May that angered Chinese social media and ended in an apology.
Elsewhere, Nike's woes continued. Greater China revenue fell 26% before currency effects, and operating profit dropped 34%. Under Armour's Asia-Pacific revenue fell 10%, as licensees discounted hard and stock ran out.
Three brands, three different challenges, and one market that exposes them all. And it isn't just Western brands: Anta's core brand grew just 4.8% in the first half. But this isn't a post about sportswear brands' struggles in China. It's about what adidas is getting right.
The exception: how adidas is winning in China
Over a similar period, adidas grew Greater China revenue 15% before currency effects, after 17% in the first quarter.
It's not all been smooth sailing for adidas. Five years ago it was the cautionary tale: in March 2021, Chinese social media and state-linked media turned on adidas, Nike and H&M over earlier statements they made about not sourcing Xinjiang cotton. As brand ambassadors walked away, adidas's sales on Tmall, Alibaba's marketplace, were down 78% by April.
It wasn't a one-season issue either. In 2022, Greater China revenue fell 36% before currency effects, with the fourth quarter down about 50%. adidas blamed company-specific challenges and significant inventory take backs.
So what changed? Bjørn Gulden arrived from Puma in 2023 and rebuilt the organisation, not just the advertising, with a clear strategic focus. Under Gulden's leadership, China makes China's decisions. He says more than 60% of what adidas sells there is designed by local teams, and about 95% is made in China. A new Greater China headquarters in Shanghai, for more than 1,500 people, is due to open by the end of the year. And adidas backs Chinese athletes such as Olympic swimmer Pan Zhanle, the national volleyball team and university sport. Small, locally relevant, credible.
The result: before currency effects, Greater China grew 8% in 2023, 10% in 2024 and 9% in 2025, reaching €3.62bn.
Now compare this with Nike, whose first all-China clothing collection is reportedly due this season. Under Armour's licensees undercut it on price. Lululemon staged a big anniversary event in a market where one misstep went viral.
What brands can learn: localisation as an operating model
Behind adidas's success is clear, effective strategy, with leadership providing local managers the autonomy to deliver it. Simply put, localisation is an operating model across the whole organisation, not a campaign, a brand ambassador or a Lunar New Year capsule.
It shows in who makes the decisions, where product is designed, and how fast the business reacts when something goes wrong. As Tse San wrote earlier this month, a brand is only as strong as the behaviour behind it.
adidas has had well-documented issues in China, and it's recovering from a deep trough, so its growth sits on a low base: 2025 sales of €3.6bn are still about a fifth below 2021's €4.6bn. It hasn't solved China, but its strategy and operating model, with the business embedded physically and culturally in China, position it well for sustainable growth.
adidas reports third-quarter results on 29 October, which is the next test. Nike's Investor Day on 16–17 November follows.
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