By Melissa Loovi
BELIEVE it or not, the man behind adidas’ amazing rebirth in the Malaysian market started his career in the music industry. Darren Choy counts his lucky stars every day – after having the privilege of bringing both Sony Music and EMI to soaring heights as their international marketing director, he answered a call in 2004 that led him to become the Managing Director of adidas Malaysia and Singapore. Amazing fortune for a man whose two biggest passions in life have always been music and sports.
Although Darren can testify to the difficulty in changing mindsets, with determination and strategic branding, adidas has managed to make their presence felt strongly in Malaysia.
adidas founder Adolf “Adi” Dassler, also created the classic three-stripes that make the brand so iconic. He was inspired by a single idea when he made his first shoes in 1920, at the age of 20 – to provide every athlete with the best footwear for his respective discipline. This principle led to 700 patents and other industrial property rights worldwide as proof of his permanent quest for perfection.
As a passionate athlete himself, Adi Dassler truly believed in close contact with sports participants and was always present in person at important sports events. As we will see, Darren Choy and the rest of the modern-day adidas family are sticking firmly to these principles.
How does the sporting apparel business compare to your previous experiences in terms of marketing and branding?
Strange as it is, the biggest similarity is the pirates that I keep running into! It’s really interesting how both my career paths have involved piracy. Besides that, both industries require the ability to stay relevant to the demographic, which mostly consists of the young. That means we have to be up to date on what is cool and what isn’t, otherwise our shoes and such will be deemed “boring”. We realised that one of the challenges was to combat the mindset of teens who saw adidas as “uncool” because their parents may also use the brand. Mindsets can be tough to change, but through our branding opportunities with hip stars such as Missy Elliot and local ambassadors such as Amber Chia, Deborah Henry and Afdlin Shauki, we can bring about the realisation that adidas is indeed cutting-edge and hot, as the younger generation likes to say!
Piracy is certainly a widespread problem for many industries. How does adidas handle this?
Well, piracy has existed for decades and we continue to combat it the best we can. Certainly it’s unnerving to visit Petaling Street and see what looks almost exactly like adidas Superstar selling for a mere RM50. But we know that our products possess the technology and careful design that gives them a superior edge to any imitation products. Although we realise that some people will probably always choose cheap imitations over the real thing, we also take heart in knowing that a large majority who maybe can’t yet afford adidas still aspire to do so someday. No one wants a beautiful pair of shoes that has four stripes instead of our trademarked three stripes.
In terms of protecting our brand, we constantly lookout for brands that infringe on our trademarks and we will pursue the matter in court if necessary. There have been several cases and we’ve won most of them, though of course local pirates still have their ways of creating imitation adidas. The trouble arises with huge countries such as China where labour is cheap and ingenuity is high.
But you know, imitation is also the highest form of flattery! Studies show that our distinctive three-stripes mark has a worldwide brand awareness of more than 90 percent. That’s amazing, and the fact that people so badly want our products to the extent of producing fakes must mean we’re doing something right at adidas. So we take a pragmatic approach of keeping an eye on this issue (piracy) while we also do not let it get the best of us. Adidas is a company that keeps moving forward, as embodied by our slogan.
Yes, “Impossible is Nothing”. What do these bold words mean for the company?
For our entire team, ‘nothing is impossible’ is a little cliché but ‘impossible is nothing’ is really powerful. From a brand perspective, look at where we were as a brand in Asia just six years ago. We were perceived to be old-fashioned; the young adults and kids felt we were their father’s brand. Women thought we were too masculine and it did not help that our corporate colours are black and white. Furthermore, football springs to mind when they think of adidas – almost as if that’s the only sports we were involved in. So we had a steep journey to get to where we are – hard work, dedication, passion and commitment all in one – we have literally done the impossible.
Beyond that, there are many other “impossibles” as a company. We’ve grown by 30 percent consistently over recent years and our retail presence has surged 50 percent. Many of our staff have also achieved their personal impossible – running their first marathon, climbing their twentieth mountain, quitting cigarettes – we are all driven by our mantra.
What has led to elevating adidas to the iconic status it has now achieved in the Malaysian market?
What I relished (and instilled in our team) was the opportunity to take control of the destiny of the brand. As we were a joint venture with a local distributor in the past, the investment on branding and advertising was limited. But we believe in stretching the ringgit and so we made concerted efforts to grow our retail and distribution points, via our own retail, franchised retail or simply by being in multi-branded stores. Brand presence is very important, which is why we have stores as large as 5000 sq ft now (at The Pavilion) in KL.
As for investing in the brand, we have increased our dollar investment year-on-year by strategically investing in the media, whether traditional or new media platforms. It’s always about making adidas relevant to the consumers. Sports is the core of our business, thus, we use many sports like football, running, tennis and basketball to showcase our brand. Another key element of our business is to tap into our rich heritage – we use adidas Originals as part of our strategy to reach the street fashion consumers.
What about the purchase of Reebok in 2006?
In a lot of countries, it’s been great because it obviously leads to an increase in market share. However, in Malaysia, Reebok is still licensed to another distributor, which means that we are technically competing against them. So this leads to a complex situation because while we support them globally, we are actually competing with them locally! Of course, once our new licensing comes into effect, we will then officially have Reebok under the adidas umbrella of sporting goods. For now, we are just concentrating on establishing adidas as the best brand, and we’ll take it from there.
Adidas has grown dramatically in the Asian region and in Malaysia. So has the brand been localised to adjust or does it stick to its global image?
Previously in Asia, adidas wasn’t regarded all that highly, mainly due to the perception that our competitors had superior quality because they had a stronger brand presence with their flagship stores and celebrity endorsements. It was an uphill battle for us but I was determined that we could change this mindset. Despite money constraints, we recognise that things like PR could actually be obtained for free, if one knew how to go about it. So that’s exactly what we did. Things like The Breakfast Show tie-in (hosts Daphne Iking and Nazrudin Rahman wear adidas) and sponsorships of sporting events around the country, whether big or small, gradually gained us a strong foothold in Malaysia. We also utilise local events such as marathons and futsal competitions to our advantage because adidas is very much catered towards enhancing sports performance. In the new age of consumer power, these efforts are vital in order to stay in the minds of consumers.
Generally, we have a global brand positioning, of which a lot is adopted and executed locally. It’s to deliver a message of consistency across all markets; however, there are some exceptions where we need localisation. Futsal is a new sport in this part of the world and we may have to literally beg for visuals for futsal because it’s not a global thing. But generally, what you see in Berlin, New York, Tokyo or in KL – they are the same.
In terms of marketing and branding strategies, what are your main aims in the short term / long term?
We would like to continue to invest in the brand aggressively. Of course, we will never have a bottomless budget but it’s also about the right return of investment. Investments come not just from the monetary aspect but also in the form of good PR, and keeping the brand trendy, cool and functionally beneficial. We will not lose focus on our core categories like football, running and Originals but we will also continue to reach the many new women consumers. As such, our Handbags for Feet line is aimed at women who want a feminine yet sporty look because that is one area we are currently strengthening aggressively.
What is it that makes adidas stand out from the crowd?
We are undeniably strong within the sporting arena as we are seen clearly as a reputable sports brand. However, that means that we are also often perceived as being masculine because sports tend to be associated with men (football, in particular). Knowing that the market for women is tremendously big (reports say that women make 70 percent of purchasing decisions in a household, even when it involves sport accessories), we want to increase our strength in this, although of course, not at the expense of losing our edge in the sporting arena. adidas has always been perceived as the choice for increasing athletic performance, but we are now embracing the possibilities of the fashion side of the business with our adidas Originals, which are much more colourful and stylish. We haven’t neglected our bread-and-butter – adidas Performance (it accounts for 70 percent of total sales) but as the world becomes more image-conscious, we must also be able to adapt to the consumers demand for products that are attractive and unique.
So these are two completely separate lines? How does this benefit the brand?
Yes, adidas Originals is where you’ll see green-and-orange sneakers with lime-green luminous stripes, fun stuff like that, particularly aimed at the younger crowd. With our aim of making adidas a personal experience for each customer, we have also started Mi Adidas, which allows you to make to order your dream pair of adidas. This goes far beyond just choosing your favourite colour, because Mi Adidas also means that people with various foot problems such as fallen arches or disproportionate feet can finally enjoy the comforts of shoes that are designed especially for them. Detailed customisation like this was only available to athletes but we have now brought it to all our consumers. This is personalised marketing to its fullest extent and what I love the most is how we can use sporting technology to bring real benefits for our users, which is exactly what Adi Dassler always wanted.
We also have a third line, which is the new Y-3 range by Yohji Yamamoto, one of Japan’s most renowned fashion designers. The “Y” stands for Yohji Yamamoto, the “3” represents adidas’ three signature stripes and the “-” signifies the link between the two. Y-3 represents true craftsmanship and the future in sportswear. The range includes jeans, beachwear and even accessories, all with a sleek edge to it. Innovations like this strengthen the brand by connecting with ever-increasing audiences, reaching those who perhaps would never be adidas users otherwise.
What about the Olympic connection? How does it impact the adidas image in terms of branding?
Anyone who caught the Olympics would have seen that adidas was visible throughout the Games. In fact, adidas was the Official Sportswear Partner of Beijing 2008, and we outfitted more than 100,000 volunteers, technical officials and staff. adidas also provided products for more than 3,000 athletes, 214 federations and 16 National Olympic Committees. In total, we gave more than three million pieces of products for the 2008 Olympic Games. We also created a line of shoes specifically for the Olympic events; everything from weightlifting to sailing to rhythmic gymnastics.
Yes, there were some concerns about the negative stories coming out of China; however I do believe that consumers are aware we have nothing to do with the politics of particular countries. We supported the Olympics because it’s an amazing global sporting event that brings countries together. All in all, the Olympics was a huge success for our brand because China did tremendously well in the medals tally, which meant that our brand received fabulous coverage as they wore our products on the podium. So the $100 million or so that we spent on the Olympics is money well spent because our brand is flourishing in China and other parts of the world now. We are actually the number one sports brand in China right now. Furthermore, adidas will be the Official Sportswear Partner for the London 2012 Olympic Games as well.
Tell us about the sponsorship of Euro 2008 in Switzerland and Austria earlier this year.
The association between adidas and football is long established, so it was natural for us to sponsor Euro 2008. We were already the Official Ball Supplier for the UEFA Champions League and these partnerships ensure that adidas maintains broad presence in Europe and beyond. We know our standing in football is strong, but we continue to bring it to new heights through the sponsorship of these major events and the endorsements of stars like David Beckham, Steven Gerrard, Kaka and Michael Ballack.
With these major sponsorships and all its product innovations, would you say that adidas is ever closer to trumping its competitors?
We have already overtaken our competitors in many countries but not in all. Generally, we are the number one and two brands all across the world. In order to solidify our position, we will execute the many strategies that we have utilised successfully so far and we also learn from our competitors, improvising and improving on what they may have done well at. Without disclosing our strategies, I can say we are certainly striving to make sure we reach our vision of being the leading sports brand in Malaysia and globally.
How important is giving back and sustaining our world to adidas?
In terms of CSR (corporate social responsibility) we definitely take this seriously, not just because it’s the buzz term for all companies today, but because we find that it’s a natural part of being a balanced and caring organisation. On a global level, there is the Adi Dassler Fund, a non-profit organisation, which is funded by adidas and collaborates with other organisations and individuals on numerous projects for improving social welfare. A great example was the initiative with Zinedine Zidane to raise funds for the world’s most vulnerable children. At adidas, we believe that sport is a perfect platform for giving back to the community.
Locally, we organise activities with charitable organisations such as Harvest Centre. Just a few weekends ago, in fact, we held the second Faisal Cup, a sports tournament for underprivileged children where our employees were volunteer linesmen and so forth. It’s a real privilege to spend time with these children. Naturally, we ensure that they have proper attire and equipment to use and we hope that these small gestures inspire our young people to strive for better things in life.
As for going green, we are keenly aware that the business we are in does create a huge impact on the environment. As such, we constantly seek ways to lower our brand’s carbon footprint. For example, we work closely with the WWF to find ways in which we can reduce the environmental impact from the process of conducting our global business. Beyond that, adidas Grün is an eco-friendly range of products, all made from recycled and natural materials. Keeping the environment healthy is something all companies and consumers are responsible for and concerned about, so we will keep finding better ways to do our business.
At the end of the day, some might say that a shoe is just a shoe. How much does Adidas focus on function as compared to style?
For me, a shoe certainly isn’t just a shoe. There are over 60 components in a shoe and there is always a reason for each of those components. Yes, some may be aesthetic but our functional sports shoes are technologically very advanced. We created the world’s first intelligent shoes equipped with a microprocessor that reads one million data per second. Different shoes are also created for different sports. adidas shoes feature technologies like ClimaCool, ForMotion, Traxion Control, QuickStrike, Bounce, and Traxion System to name a few… We create shoes for world record holders and if we don’t create shoes that can make them run faster, jump higher, kick further, then we are not doing justice to them. Having said that, style is also important as sports is not just about performing well but also about feeling and looking good. So for us in adidas, we have combined two of these elements of sports and style seamlessly.