The three stripes are omnipresent at the moment: The European Football Championship is a major marketing platform for Adidas, and with the Olympics the event of the year. The sporting goods company from Herzogenaurach is not only one of the few global sponsors of the European Championship, it also provides the match ball and equips six participating teams, including (still) Germany. The company also celebrated its 75th anniversary with employees at the weekend, together with the DFB team.
But now there are no good headlines for Adidas. There are concrete allegations of corruption in China. A company spokesman announced that an investigation would now be launched. “Adidas takes allegations of possible compliance violations very seriously,” he said. The company is committed to complying with laws and ethical standards in all markets. It was confirmed that Adidas had received an anonymous letter that “indicates possible violations of the code of conduct.” No further information could be given at this time, the statement continued. However, the case that has now come to light is being intensively investigated by Adidas officials together with external legal advisors.
China is one of Adidas’ most important markets
Adidas is specifically accused of corruption in the anonymous letter, allegedly from its own employees, wrote the Financial Times (FT)Employees had accepted “millions of euros” from suppliers and advertising agencies. According to the FT, the letter signed “Adidas China Employees” was also briefly visible on the Chinese social media platform Xiaohongshu. Several employees are named there, including a manager who is jointly responsible for Adidas’ 250 million euro marketing budget in China. The employees had accepted rebates, known as kickbacks, from service providers. Another high-ranking employee was accused of receiving large amounts of cash and benefits in kind such as real estate. The letter did not provide any evidence for the allegations, the FT said. However, internal Adidas details were provided.
Adidas is the second largest sporting goods company in the world after Nike and ahead of Puma. China is one of the most important markets for Adidas. Recently there was a slump here, partly due to the corona pandemic. There were also calls for a boycott against Adidas and others because of Western criticism of the way the Uighur minority was treated. But the new Adidas boss Bjørn Gulden managed to turn things around. For the current year, Adidas is expecting double-digit growth rates in China again. The company also attributes the upturn to the fact that the China subsidiary, under the leadership of country manager Adrian Siu, who was hired in 2022, has focused more on the fashion tastes of Chinese customers. It is unclear how a possible corruption scandal could now affect things.
In the first quarter of 2024, Adidas’ total sales and profits grew again, so the forecast for the year as a whole was increased. Recently there was trouble over the cooperation with US rapper Kanye West, the collaboration was ended because of his anti-Semitic, sexist and racist outbursts. The last stocks of the so-called Yeezy products are currently being sold, which has recently been good business for Adidas.