Adidas Scraps European BTC Web Sales, Plans BTB in Japan

Adidas has stopped selling sporting goods to consumers on the Internet in Europe, but plans to continue doing so in the U.S. The company will also open a business-to-business Web service for its dealers in Japan later this year.

“We started selling goods for six Olympic sports online in March of last year [for two reasons],” said Jan Runau, spokesman for the Adidas Salomon concern that is based in the small German town of Herzogenaurach. “First, because we wanted to demonstrate our commitment to the Olympic games in the Olympic year, and second, in order to gather experience in this new form of distribution. Now that the Olympics are over, we saw no reason to continue selling these products online.”

Adidas had offered equipment for boxing, weight lifting, fencing, rowing, wrestling and Ping-Pong.

“You can see from this selection that we did not intend to compete with our dealers,” Runau said.

Nevertheless, Runau stressed that closing the shop was a temporary measure and that the company would spend the next few months evaluating its online experience in Europe to see how it could “flow into our future Web strategy.”

Overall, consumer sales have been meager, with worldwide totals “in the single million euro range.” (The fluctuating euro has recently been worth 92 cents.)

The newspaper Die Welt reported that Adidas had higher hopes when it opened the “Olympia Portal.” It hoped for sales in the double million euros in Europe alone. It added that cost figures for the portal were not available.

Runau said that the company “saw great potential in BTB use of the Internet in the supply chain with our retailers. The whole process of ordering from us will be much easier for dealers over the Web.

“They can look at what we have to offer 24 hours a day, seven days a week,” Runau said. “We already have a BTB Web operating in Germany with 1,500 dealers as partners and we plan to expand the BTB system on a pan-European basis.”

Adidas will do the same thing in Japan where it has a subsidiary that supplies retail outlets with sneakers and other company products that range across the sporting goods chain.

“We don't plan to sell directly to consumers in Japan, but to implement and adapt the German BTB model to that market,” Runau said.

However, Adidas does not plan to try a BTB model in the U.S.

“The American market is structured differently than Europe where sales are dominated by many small dealers,” Runau said. “Large chains are the main U.S. distribution channels, so BTB wouldn't work in the same way.”

But Runau stressed that the U.S. market is “as far as our strategy is concerned, surely the key to success and has the highest priority for us. Two reasons: first, because the U.S. accounts for 50 percent of the worldwide sporting goods market, and second, because we have great potential there.

“We already have 12 percent U.S. market share and we want to grow that both through regular distribution outlets and through Internet sales to consumers. We sell our whole line on the American market: shoes, textiles, accessories, skis, bindings, inline skates and golf equipment.”

Canada, the U.S. and Latin America accounted for 27.1 percent of the company's total turnover while Asia contributed 21.5 percent in 1999, the last year for which figures are available. European sales totaled 51.4 percent. He did not reveal gross sales.

While Japan is the company's most important Asian market, it is not the only one.

“We are doing very well in China, too,” he said.

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